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 video webinar with Q&A
This CLE course 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 that can arise with ground leases.
Outline
- Casualty and condemnation generally
- Concerns of lender: protect the security, control proceeds, continued performance of a loan
- Concerns of the borrower: the 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
Benefits
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 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?
Faculty
Jason T. Polevoy
Counsel
Patterson Belknap Webb & Tyler
Mr. Polevoy has extensive experience in all aspects of complex commercial real estate, including office and retail... | Read More
Mr. Polevoy has extensive experience in all aspects of complex commercial real estate, including office and retail leasing, development, sales and acquisitions, joint ventures, financing, restructurings and workouts. He also has significant experience in connection with hotel management agreements, architect agreements and construction agreements. Mr. Polevoy has represented owners, investors and developers of office, hotel, multi-family residential and industrial properties in connection with the acquisition, disposition and financing of commercial real property, and represented landlords and tenants in connection with office, retail and restaurant leases, in New York City and nationally. He is the current Chair of the Real Property Law Committee of the New York City Bar Association.
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Lisa M. Zana
Partner
Shipman & Goodwin
Ms. Zana’s commercial real estate clients are situated throughout the U.S. with a focus on New York’s... | Read More
Ms. Zana’s commercial real estate clients are situated throughout the U.S. with a focus on New York’s tri-state area, and include private developers, public companies, institutional owners, banks, and lessees of millions of square feet of real estate across the country in the luxury residential, mixed-use, retail, commercial office, data centers and colocation facilities, hotel and hospitality, healthcare and higher education industries. Her specific experience and areas of focus include: representing public and private companies that use millions of square feet of real estate, in negotiating build-to-suit and credit-tenant office leases, development agreements and state tax incentive agreements; acquiring, selling, financing and leasing data centers and colocation facilities; negotiating ground leases; negotiating retail leases on behalf of developers and the end retail users; arranging for and negotiating debt and equity financing; and negotiating corporate- and property-level acquisitions and sales.
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