Friday, June 29, 2007
The American Bar Association Section of Real Property, Probate and Trust Law and the ABA Center for Continuing Legal Education are sponsoring a teleconference and live audio webcast on July 17, 2007 entitled Current Issues Involving Tenancies in Common.
Here is a description of this program:
Commercial real estate loans are increasingly being made to groups of investors or co-owners who hold the fee interest to real property under the common law form of ownership known as tenancy in common (TIC). The TIC is significantly different from other forms of property ownership, such as limited partnerships and limited liability companies. Mortgage lenders must know and understand the differences. These differences affect negotiation, drafting, enforcement of financing transactions, and related bankruptcy issues. In the event of bankruptcy, complex questions may arise as to whether one tenant can place the entire aggregation into bankruptcy and whether the right to partition will be enforced.
Topics will include:
- What are the basic underlying theories of a TIC?
- What is the partition right and why does it matter?
- What kinds of transactions are suitable for TIC structure?
- How do the enforcement and bankruptcy risks differ from lending to a limited liability company or a limited partnership?
- Will the co-owners’ buy-out right in a TIC be enforceable in the event of bankruptcy?
- Will a bankruptcy court permit a single tenant to obtain a partition, and sale of the entire property, even if the other tenants object to such a sale?
- Will a mortgage lender’s right to credit bid prove to be a highly valuable protection in the event of a bankruptcy case?