The RPPT Bulletin is emailed out on a bi-monthly basis to all Section members to keep members up-to-date on the activities of the Section.
USA Patriot Act and Real Estate Transactions
The Treasury Department issued an advance notice of proposed rulemaking on April 10, 2003 seeking comment on the phrase "persons involved in real estate closings and settlements." 68 Fed. Reg. 17571, April 10, 2003. The USA PATRIOT Act, the massive anti-terrorism legislation enacted shortly after the terrorist attacks on September 11, 2001, directed Treasury to issue regulations that would require all "financial institutions" (as defined in the Bank Secrecy Act) to establish anti-money laundering programs. One of the defined "financial institutions" is "persons involved in real estate closings and settlements."
The proposed rulemaking seeks comments on the following issues relating to this phrase: (a) what are the money laundering risks in real estate closings and settlements? (b) how should persons involved in real estate closings and settlements be defined? (c) should any persons involved in real estate closings or settlements be exempted from coverage under the anti-money laundering requirements? and (d) how should the anti-money laundering program requirement for persons involved in real estate closings and settlements be structured?
Public comments are due to Treasury by June 9, 2003. The Section has formed a task force to formulate the Section's comments on the proposed rulemaking. The task force members are Kevin L. Shepherd, Michael D. Goler, Mark F. Mehlman, and Timothy E. Powers. Please send any observations you would like the Section to consider to Kevin Shepherd at email@example.com.
Your Section at Work for You
Section member Elizabeth Lee is our newly appointed liaison to the Property Records Industry Association ("PRIA"), and in that capacity, Beth has recently attended a PRIA forum on privacy issues that are attendant to public record keeping. PRIA is forming a task force to further analyze such issues, and we anticipate that Beth will be representing the Section on the task force.
Barry Nekritz has served on the NCCUSL drafting committee of the Uniform Entity Transactions Act ("UETA"), a draft of which may be found at: http://www.law.upenn.edu/bll/ulc/ulc.htm#ueta. Another draft will be produced this Summer and will be voted on by NCCUSL later this year. Barry also reported that a NCCUSL drafting committee has been appointed to revise the Uniform Limited Liability Company Act and another NCCUSL committee is formulating a uniform mortgage satisfaction act. A NCCUSL committee has also been approved to study the possibility of a uniform mortgage satisfaction act.
Section member Dale Whitman is the ABA Representative appointed to the NCCUSL drafting committee for the Uniform Electronic Recording Act, which will provide standards for county recorders who do elect, under the Uniform Electronic Transactions Act (now adopted in approximately 40 states), to accept electronic recording.
Section member Roger Schwenke is representing the Section on the NCCUSL drafting committee on Uniform Environmental Covenants Act, which will be voted on by NCCUSL in August. Drafts of all NCCUSL uniform acts can be found at: http://www.law.upenn.edu/bll/ulc/ulc_frame.htm.
Section member Aurora Austriaco has monitored HUD's proposed revisions to the RESPA rules. HUD has received numerous comments from all segments of the real property industry, many of which were in opposition to the proposed regulations. Major concerns arise from the proposal that lenders be permitted to offer a Guaranteed Mortgage Package Agreement (guarantying both the interest rate on the loan and closing costs), which would be exempt from the anti-kickback provisions of RESPA, would discourage consumers from hiring independent closing counsel, and would make owner's title insurance optional.
The Section has approved a new task force of Mike Goler, Mark Mehlman, Tim Powers and Kevin Shepherd to comment upon proposed treasury regulations that would impose reporting requirements (i.e., whistle-blowing) upon persons involved in real estate transactions and settlements.
As noted in earlier Section publications, member Ann Saegert, on behalf of the Section, had submitted comments on the proposed rule issued by the SEC pursuant to the Sarbanes-Oxley Act pertaining to standards of attorney conduct. Ann reported at the Spring meeting that the SEC has revised the rules to address many of our Section's concerns. The current form of the proposed rules can be found at: http://www.sec.gov/rules/proposed/33-8186.htm.
Carol Ann Martinelli, chair of our Section's real estate Pro Bono Committee, reported on the Section's success in providing pro bono legal services to Habitat for Humanity in forty-eight (48) states. The Section also provides pro bono legal support in the zoning area for PATH (People Advocating Therapeutic Homes). For more information on these and other pro bono activities of the real estate division, please see the Pro Bono (B-4) Committee website at: http://www.abanet.org/rppt/cmtes/rp/b4/home.html.
Spring Meeting Highlights
During the Section's Spring meeting, the Section hosted its Minority Outreach Program: Sharpening Your Basic Commercial Real Estate Skills. During the first half of this program, minority bar association registrants participated in one of five discussion groups made up of members of the Real Property Division of the Section and representatives of New York-area minority bar associations, as follows: Buying Land for Development, Construction Contracts, Office Space Leasing, Purchasing Multi-Tenanted Property for Investment, and Real Estate Financing. The second half of the program brought the entire audience together for a debriefing and panel presentation. The program was followed by a welcome reception for all Spring meeting attendees.
Friday's luncheon, Ground Zero: The Rebuilding of Lower Manhattan, was organized by Jonathan S. Gellman, of the New York City Economic Development Corporation and presented by Alex Garvin also of the New York City Economic Development Corporation. Alex gave a comprehensive overview of the rebuilding of Ground Zero, including highlighting the major players involved and how they are working together, the process of selecting a new design, current construction, reconnecting the new plans with the other areas of lower Manhattan and the memorial competition. "Lower Manhattan will evolve much the way I think that the American Constitution evolved: out of the realties of the situation and the tug of war among very, very disparate interests. The difficulty is that each of the interested parties has in mind a quite different idea of what this means and how to get it done, " stated Garvin.
After the Friday’s luncheon, 110 meeting attendees traveled downtown for the WTC Redevelopment Tour & Classroom. The buses went inside the Ground Zero site, where Peter Rinaldi, site manager for the Port Authority of New York and New Jersey, explained the current reconstruction of the destroyed PATH commuter rail station and pointed out other features of the site. The group then toured the nearby Battery Park City and World Financial Center, and walked past Seven World Trade Center, the first building at the site undergoing reconstruction. The tour ended at the New York County Lawyers Association, where presentations were given by the Port Authority about transportation plans for the area; the Lower Manhattan Development Corporation about plans for a memorial, museum, office and retail space at the site; and Skidmore Owings & Merrill about the architecture of the new Seven World Trade Center building. The tour was organized by Michael Gerrard of the New York office of Arnold & Porter and by Roger Bernhardt of Golden Gate University School of Law, and it was led by Mr. Gerrard.
Real property programs at the Spring meeting were well attended and spanned the following topics: commercial leasing, subleasing, insurance in leasing, leasing finance, new urbanism, affordable housing, securitization, letters of intent, real estate investment funds, the secondary mortgage market, real estate opinion guidelines, construction projects in default, digital signatures and ethics. The program also included a tour of the World Trade Center redevelopment area.
The probate division's programs similarly were well attended and included sessions on valuation in estate planning, bypass trusts funded with retirement assets, use of life insurance in estate planning, new GST allocation rules, defined value gifts, interstate elder law issues, business succession planning and buy-sell agreements, recent developments with family limited partnerships, income tax issues, planning with private foundations, digital signatures, preferred partnership freezes, qualified plans, estate litigation, GRATs, bio-ethics, and deferred compensation planning.
If you were unable to attend, You can call ABA Service Center to order program materials at 1.800.285.2221. Please mention the following product codes, for the CD, PC 5430441, for the Probate and Trust books, PC 5430442, and for the Real Property books, PC 5430443.
A full description of the programs offered at the Spring meeting can be reviewed at http://www.abanet.org/rppt/2003
National Health Care Decisions Week
Linda Whitton has continued the Section's significant outreach efforts to provide educational materials on health care decisions to state and local bar associations and community organizations. Program details are located at http://www.abanet.org/rppt/nhcdw
Joint Meeting with Tax Section
The leadership of the Taxation and RPPT Sections has agreed to collaborate on a joint continuing education series to be held in conjunction with the Taxation Section's Fall meeting in Chicago on September 11-13, 2003. The two Sections will host CLE programs that address developing issues in their respective practice areas, as well as four or five in-depth mini-programs covering substantive topes of interest to both Tax and RPPT members. www.abanet.org/rppt/meetings_cle/calendar.html
May 29 - 30
Thirteenth Annual Charitable Giving Techniques Program
Le Meridian Hotel, Chicago
June 4 - 6
The Westin Michigan Avenue
June 5 - 6
National Conference for the Minority Lawyer
July 7 - 11
Skills Training for Estate Planners (STEP)
Emory University School of Law
July 10 - 12
Estate Planning for the Family Business Owner
July 28 - 31
Skills Training for Estate Planners (STEP)
Emory University School of Law
August 7 - 13
ABA Annual Meeting
Hyatt Regency Embarcadero
San Francisco, CA
September 11 - 13
RPPT/Taxation Joint Fall CLE Meeting