Negotiating Hotel Purchase and Sale Transactions: Key Legal Issues for Buyers and Sellers

Closing Contingencies and Reps and Warranties; Evaluating Existing Management and Franchise Agreements

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, February 8, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will discuss the key legal issues in the purchase and sale of a hotel property, taking into account the unique issues in this asset class. The program will focus on seller representations and warranties, key contract provisions in the purchase and sale agreement, and retention or termination of the hotel management/franchise affiliation. The program will also address the significance of the terms of the hotel management agreement.

Description

Purchasing a hotel or other resort/leisure property is fraught with legal issues well beyond real estate matters that must be resolved in a shorter due diligence period. A working knowledge of the issues, the standards and customs for resolving those issues is critical to a successful transaction.

The buyer and seller must take the proper steps to ensure that the purchase and sale agreement provides a sufficient roadmap through the acquisition and disposition process that takes into account all stakeholders and meets the parties reasonable expectations. A group of reps and warranties is not enough.

Key provisions may include the buyer’s ability to obtain financing; retaining or terminating the franchise affiliation; the buyer’s ability to obtain requisite licenses and permits (including a liquor license); developing a property improvement plan; addressing employment concerns; withdrawal liability under ERISA; approval by a loan special servicer; and other due diligence items.

When the hotel property is subject to a hotel management agreement or a franchise affiliation, the ability of the buyer to retain or terminate that relationship must be vetted by both buyer’s and seller’s counsel. Much of the hotel’s value can be locked into the hotel management agreement. The buyer must carefully examine the management agreement and the abilities of the hotel management staff.

Listen as our authoritative panel discusses unique issues involved in the purchase or sale of a hotel. The discussion will include seller representations and warranties, key closing contingencies in the purchase and sale agreement, and issues to consider in retention or termination of the hotel management/franchise affiliation.

READ MORE

Outline

  1. Seller representations and warranties in the purchase and sale agreement
  2. Closing contingencies in the purchase and sale agreement
  3. Retaining or terminating the hotel management/franchise affiliation
  4. Vetting the hotel management or franchise agreement

Benefits

The panel will review these and other key issues:

  • Why are seller representations and warranties so critical in the purchase of a hotel property?
  • What are best practices for drafting seller representations and warranties and closing conditions that protect both buyer and seller?
  • What unique issues involved in the purchase of a hotel property must be included in the closing contingencies of the purchase and sale agreement?
  • What issues involved in the purchase and sale will be addressed in the hotel management or franchise agreement?

Faculty

Falik, Jonathan
Jonathan Falik

Founder and CEO
JF Capital Advisors

Mr. Falik leads the firm's hospitality business, which includes equity and debt placement, asset acquisitions and...  |  Read More

Gorman, Tara
Tara K. Gorman

Partner
Perkins Coie

Ms. Gorman represents sellers, owners and licensors in the acquisition, disposition, finance, development, management...  |  Read More

Marre, Daniel
Daniel G.M. Marre

Partner
Perkins Coie

Mr. Marre's practice focuses on real estate transactions and development, with an emphasis on the hotel...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$297

Download

$297