With major portions of the Business Law Guidelines selectively “updated,” what should be done with the companion Real Estate Guidelines–as to both its unique content and the text of Business Law Guidelines as and as not updated? This question led, with the blessing of the chairs of the RPTE and ACREL committees, to formation of a steering committee consisting of Ken Jacobson, Pete Ezell, and Steve Weise (respectively, co-chair of the Joint Working Group and co-reporters for the Statement), Bill Dunn, Ed Levin, and Scott Willis (each, along with Ken Jacobson and Pete Ezell, members of the Drafting Subcommittee that prepared the Real Estate Guidelines), and David Miller (Reporter for the 2012 Report), to consider answers to the question. Ken also represents the ABA RPTE Section and David represents ACREL as association members of WGLO.
The steering committee is to prepare one or more suggested actions for consideration by opinion committees of constituent organizations (ABA RPTE, the American College of Mortgage Attorneys [ACMA], and ACREL); and a joint drafting group would be formed to bring a chosen course to realization. In the meantime, the original Business Law and Real Estate Guidelines continue to exist, with some subject to reinterpretation or modification based on the Statement.
At this time, our steering committee has not sought formally to coordinate our inquiry with the ABA Business Law Opinions Committee. I believe the Business Law committee will not reissue the Business Law Guidelines as “Restated Guidelines” at this time, or perhaps ever. It is possible that the Joint Working Group may update and expand the Statement to include the sections of the Guidelines that were excluded from the Statement, but there is no current plan to do so.
Among the questions or concerns confronting the steering committee are:
- Just how has a Guideline been affected by the Statement when a Guideline subject has been covered less than fully? Even though there may be a counterpart of the Statement in the Guidelines, the Statement often does not seem to cover all of the thought in a targeted Guideline. Is what is left out no longer guidance–or just not the kind of summary guidance the Statement is intending to provide?
- What if any of the Real Estate additions to the Business Law Guidelines are needed after issuance of the 2012 Report, the Local Counsel Report, and the U.C.C. Report? Have these reports adequately incorporated the Guidelines?
- If the answer to the foregoing question is yes or mostly yes, is there a reason for a “short form” set of opinion standards (avoiding the word “guidelines” for the moment) that succinctly captures the guidance offered by the Business Law Guidelines or the Statement and lengthier texts and the bold-lettered real estate additions (edited in many cases to be updated)? Would valuable context be lost in attempting to capsulize the rules of the road in a short-form resource?
- To what extent should real estate opinion letter practice need guidelines that differ from business law “guidelines” (however expressed) on common subject matter? Should the real estate bar work on restated guidelines while business law allows the original guidelines to be superseded by a new form of Statement? Is there any good reason real estate should pursue a different solution–especially if it is not unique to real estate finance?
- Would there be value in a published interim report that provided Statement content to replace what was intended to be updated, left in place what was not included with the intentional updating, and removed or otherwise recast the additions made in the Real Estate Guidelines? This product would be temporary, but might help all understand just where we are. On the other hand, it’s a lot of work that has no necessary future.
- Should we wonder why some of the real estate additions to the Business Law Guidelines that are not themselves real-estate-centric are not reflected elsewhere? For example, Real Estate Guideline 1.5b is an editorial comment on “conduit” opinions. There is no further discussion of this in the cited real estate reports (the 2012 Report mentions the concept once in the context of giving an opinion based on another lawyer’s opinion as a “conduit” opinion) or as yet in the Statement. This Guideline states that conduit opinions-those given on reliance entirely on someone else’s say so-are generally objectionable. The content does not cover the subject completely, but covers more than real estate related concerns. Is it worth attempting to create a special standard for real estate opinion letters that covers other more than real estate subjects? Would the content of 1.5b require a more specific target than its broad statements, or does a real estate guideline intend to speak about a subject not addressed in other “guideline” statements?
We need to work through these and other questions. I expect this phase of work to take several months. We have developed a concordance relating Real Estate Guidelines and the Statement and a beginning list of proposed dispositions if the Guidelines were to be re-expressed. If you wish to comment on our work or raise questions for us to consider, please pass them along to me for our steering committee’s consideration.
