Guarantees in Real Estate Transactions

Guarantees undergird most real estate transactions.  Lenders, investors and others are often unwilling or unable to finance or otherwise support a real estate transaction without certain substantial guarantees.  These guarantees may concern repayment of loan proceeds or performance of other services – construction, maintenance and waste prevention, environmental indemnity, etc.  The scope of guarantees is highly negotiated, particularly whether the guarantee is recourse or non-recourse and the scope of carve-outs from the guarantees. This program will provide you with a practical guide to negotiating and drafting guarantees in real estate transactions. 

Schedule:

• Types of guarantees – payment, performance, collection, completion
• Essential elements of a guarantee – consideration, scope, carve-outs, waivers
• Guarantees for property maintenance/no waste, environmental indemnity and other non-financial concerns
• Carve-outs – full v. partial, fraud, misappropriation, misapplication, failure to maintain, insurance, and more
• Guarantees of construction loans