Revising Real Estate Opinion Letter Guidelines, Continued: Kicking the Dirt

We have previously discussed the need to consider how the Real Estate Opinion Letter Guidelines (“RE Guidelines”) could be updated in light of the many additions to opinion practice literature since their publication in 2003 – in particular the 2012 Report, the Local Counsel Report and the Statement of Opinion Practices. Some but not all of the original Business Law Guidelines incorporated into the RE Guidelines have been updated by the Statement of Opinion Practices. The original RE Guidelines offer a quick normative statement of opinion practice that seems generally applicable. Many lawyers find the Guidelines convenient and helpful summaries of practice principles.

The project to update or revise the RE Guidelines has generated interest not only of real estate opinion practitioners but also of members of the ABA Business Law Section and of the Working Group on Legal Opinions Foundation. A data base for this project is located on the RPTE Opinion Committee’s webpage at https://www.americanbar.org/groups/real_property_trust_estate/committees/real-property-committees/legal-opinions-in-real-estate-transactions/– easily accessed and once there, by scrolling down just a bit to the link to the project materials, and clicking to see the materials and information available there.

A Steering Committee for the project has been formed. Its first endeavor will be to consider the content that was added to the then existing Business Law Guidelines for Opinion Letters. In the Addendum to this issue of Opinions Matters, we show the content of these specific additions. Among the questions to be considered about them:

Is each correct as a current practice standard?

• What modification of any of them is necessary to comport with currently recognized customary practice in general? In real estate finance?
• Is the content uniquely applicable to real estate finance transactions or are these concepts that have been addressed in the Statement of Opinion Practices? Or that should be addressed in “guidance?”
• Is the position expressed consistent with the Statement of Opinion Practices and/or the Reports? One example is § 1.5a, which suggests there are no implied opinions, a position that is overly broad and contrary to recognized practice. (See Local Counsel Report § 3.5).
• How should we modify the reliance on the Accord? In some opinion circles, particularly TriBar and ABA Business Law Section, the Accord is discredited. However, the principles of the Accord do not seem – in many respects – to depart from recognized customary practice.

Other questions exist. The Steering Committee asks for comments about these questions; and hopes that we can reflect a broad base of input as we consider these questions. Please send your comments to me at [email protected].