Casualty and Condemnation Provisions: Balancing Conflicting Interests of Lenders, Borrowers, and Tenants
Using SNDAs to Address Lease Requirements, Special Issues With Ground Leases
Recording of a 90-minute premium CLE webinar with Q&A
This CLE webinar will examine casualty and condemnation provisions in real estate finance documents and how best to balance the interests of lenders, landlords, and tenants concerning disbursement of proceeds and the right or obligation to rebuild. The panel will discuss lease scenarios that can impact casualty and condemnation provisions and issues about the allocation of proceeds which can arise with ground leases.
- Casualty and condemnation generally
- Concerns of lender: protect security, control proceeds, continued performance of a loan
- Concerns of the borrower: ability to repair, rebuild improvements, keep tenants
- Materiality thresholds for making proceeds available, allowing/requiring a rebuild, accelerating the loan
- Treatment of casualty and condemnation in leases
- Borrower/landlord required to rebuild
- Tenant allowed to rebuild, given control over proceeds
- Other variations
- Addressing conflicting provisions in the SNDA
- Special issues with ground leases
The panel will review these and other essential questions:
- When might the interests of the lender and borrower be aligned when there is casualty or condemnation?
- What is the "market" for materiality thresholds, particularly concerning the lender's ability to accelerate the loan?
- How do leases typically approach rebuild obligations when there is a casualty, and how might that conflict with loan provisions?
- How do ground leases address allocation of condemnation proceeds, and what should leasehold loan documents say in response?
Ren R. Hayhurst
Ren RH Legal Consultants
Mr. Hayhurst’s professional life has focused for over 30 years on all aspects of lender and borrower... | Read More
Mr. Hayhurst’s professional life has focused for over 30 years on all aspects of lender and borrower representation, including real estate and commercial loan documentation, real estate loan workouts and foreclosure, receivership and loan/guaranty enforcement litigation.Close
Mr. Palazzo has over 25 years of experience in real estate finance. He began his career as lender's counsel for a... | Read More
Mr. Palazzo has over 25 years of experience in real estate finance. He began his career as lender's counsel for a $3B dollar regional bank in Southern New Jersey, and has built upon his expertise in several subsequent roles. He has substantial experience in sale/ leaseback transactions, construction, joint venture equity and debt arrangements, real estate development, and loan management of stabilized and distressed debt. From 2005-2010 he was an Adjunct Professor for New York University’s Schack Real Estate Institute. Mr. Palazzo is an attorney licensed to practice in New Jersey.Close