The U.C.C. Report follows the Real Estate Finance Opinion Report of 2012, 47 Real Prop. Tr. & Est. L.J. 163 (2012), and the Local Counsel Opinions in Real Estate Finance Transactions report (formally known as Local Counsel Opinion Letters in Real Estate Finance Transactions: A Supplement to the Real Estate Finance Opinion Report of 2012, 51 Real Prop. Tr. & Est. L.J. 167 (2016)), as a project of the ABA Real Property, Trust & Estate Law Section’s Legal Opinions in Real Estate Transactions Committee, the American College of Mortgage Attorneys, and the Attorneys’ Opinions Committee of the American College of Real Estate Lawyers to provide a picture of customary and acceptable opinion practice in real estate financing, working through a Joint Drafting Committee. The American College of Commercial Finance Lawyers was actively involved in reviewing and commenting on the U.C.C. Report as it progressed and has given its approval of the report as issued.
The 2012 Report did not encourage giving U.C.C. opinions, and avoided discussion of them. Development of a resource on this subject for real estate lawyers has been in process since work on the Local Counsel Report began in 2013. We set out to de-mystify and de-“mythify” opinion practice in real estate finance transactions that involve important collateral as to which a security interest may be subject to U.C.C. provisions.
The U.C.C. Report discusses creation, attachment, and perfection of security interests in “real estate collateral” to which the U.C.C. applies (fixtures, as-extracted collateral, and timber to be cut) and personal property (such as FF&E to remain non-fixtures) including lengthy discussions of deposit account and investment property security interests. The Illustrative Opinion Letter provided with the Local Counsel Report is supplemented with the addition of many specific assumptions and opinions suggested by the U.C.C. Report text.
In the course of its preparation, the U.C.C. Report received extensive review, comment, and contribution by members of the sponsoring groups’ committees, many of whom have active and advanced practices in U.C.C. matters. Although an opinion preparer will not become an expert in commercial finance by reading this report alone, the reader will understand when and how to provide – or not – and review opinions in transactions with U.C.C. collateral often encountered in real estate finance, and will have reference to other resources for further knowledge and skills.
Bill Dunn served as Reporter and principal author of the U.C.C. Report, with assistance of Steve Weise and Marshall Grodner as contributing reporters, and Ed Levin and Scott Willis, as co-editors. Ken Jacobson provided significant drafting commentary and suggestions for the Illustrative Opinion Letter.
