Further Considering Real Estate Opinion Letter Guidelines: Moving Ahead

Following my article and “snapshot” in the Spring 2020 issue of Opinions Matters of Real Estate Opinion Letter Guidelines (2003) in the context of the Statement of Opinion Practices (2019), the respective opinion committees of the ABA Real Property, Trust & Estate Law Section, the American College of Mortgage Attorneys, and the American College of Real Estate Lawyers, as well as the real estate affinity group of the Working Group on Legal Opinions Foundation, have all endorsed a project to “update the Guidelines.” A steering committee representing these sponsors is being formed, from which a drafting group will be appointed to work on the product.

This project begins with a look at the real estate centered portion of the Real Estate Opinion Letter Guidelines – those appearing in bold print inserted into the original Guidelines for Preparation of Closing Opinions of the ABA Business Law Section (2002) – to see if the statements represent present-day guidance. In that discussion we will consider the function of “guidelines” as “here’s what you should do” statements or as “here are principles to guide.” That will lead to consideration of inclusion of substantive content into previous reports, the Real Estate Finance Opinion Report of 2012 and its supplementary report Local Counsel Opinion Letters in Real Estate Finance Transactions, and eventually an examination of how reports and guidance can be provided in a single consistent source.

We will also consider how prevailing customary practice has affected the basis for Guidelines. From inception, real estate opinion practice and corporate practice have been fundamentally consistent although manifested differently. I believe that there is gain in assuring that the fundamentals are the same and practice guidance as mutually consistent as reasonably possible. Throughout this process, we will reflect on how the Statement of Opinion Practices fits with the original Guidelines and changes the overall function of guidelines and specifically the terms of them. The literal effect is demonstrated with my article.

Because this endeavor has an existing starting point, we are establishing space on the ABA RPTE Legal Opinions in Real Estate Transactions Committee webpage on which we will post references and resources related to it. That page and its materials are available to all. We welcome your comments and suggestions.