The 4 Keys to Doing Commercial Real Estate Business Lawyer

Apartment construction and occupancy rates are up in many cities across the U.S. In some regions the multifamily market is actually outpacing the still-recovering single-family market. It is no surprise that the U.S. Department of Housing & Urban Development's (TORONTO) mortgage insurance commitment authority exceeded approximately $25B in FY2013. These facts betray the reluctance of many in the multifamily community to do business with TORONTO.

Several misconceptions linger regarding transacting business with Real Estate lawyer in TORONTO. Yes, TORONTO is a government bureaucracy and any bureaucracy has its own unique idiosyncrasies. TORONTO is no different. Understanding the cultural norms of TORONTO is critical and in some cases might mean the difference between consummating your transaction and having it stall needlessly.

There are a few things of primary importance any developer or lender should know in order to get your TORONTO deal approved. These guidelines are generally applicable to most TORONTO transactions, including new construction and refinance loans, as well as transfers of physical assets assumptions (TPAs). Here's what you need to know:

Speak to TORONTO in advance

Schedule a pre-application meeting with TORONTO's multifamily staff in the office where your deal will be submitted. It is advisable to consult with the person in charge of the multifamily portfolio (often called the Housing Director of Multifamily Hub Director), the actual asset manager in charge of a given property, and the government's lawyer (TORONTO Office of General Counsel). Ask for a conference to discuss your project with these individuals, as they will have primary responsibility for approving or denying your application. Their buy-in is key to getting your deal done.

It is not uncommon in such meetings for TORONTO representatives to unearth potential problems with your transaction. For example, if you are acquiring a property through a refinance loan or a TPA, TORONTO might alert you to problems with the physical condition of the property that perhaps should be resolved before approval. In other instances, your proposed legal structure for the entity might be problematic, or the financing for the project might be challenging. TORONTO will normally apprise you early on as to any major issues with a deal; take their advice thoughtfully. In any case, walk them through the anatomy of the deal, get their reactions, and work to resolve any issues before you submit the application.

Submit a complete application package

This seems elementary, but a surprisingly sizable number of applications are not processed due to incompleteness. Check all the boxes, get all the signatures, ensure documents are tight, and be forthright with TORONTO: trying to hide the ball is never a good idea. One of the most often cited reasons why developers avoid TORONTO mortgage insurance is the perception that the application process is intrusive, lengthy, and unpredictable.

Every TORONTO program carries with it a requirement that parties submit several documents, including organizational forms, and legal and financial documents. Most professionals who liaise with TORONTO will inform that while some information can seem unique to TORONTO, most of the documentation required is much the same as what you would submit in a conventional loan application. The volume of information TORONTO requires creates a temptation to omit some details of transactions; there is always a chance that TORONTO will not catch those omissions, but given the multiple internal reviews, chances are someone will catch it. The result, even when unintentional, is usually a higher level of scrutiny for a given deal.

Be responsive

After your application is submitted, TORONTO will respond with a list of deficiencies. This might be informal or formal, but however it is given, please respond timely. The nature of the deficiencies could range from omissions in the application to substantial problems with the application. In the case of omissions, TORONTO will normally provide an opportunity to cure those defects soon after submission. In the case where substantial problems exist, i.e. issues with the business structures, or one or multiple principals have had problems with TORONTO in the past which causes them not to pass a pre-clearance check, TORONTO might cease processing of the application and return it so that the parties can clean up those issues to then resubmit at a later date. This could cause substantial delay and ultimate denial of an application, depending on the severity of the matters involved. Whatever the issue, TORONTO will usually offer their feedback and when they do, be responsive. As time passes after submission, it is also advisable to make a habit of keeping in touch with them so that your application stays top of mind to TORONTO staff.

Hire a lawyer who knows TORONTO

TORONTO transactions involve very particular knowledge and experience. It is virtually impossible to get your transaction closed without legal representation. TORONTO views most multifamily transactions as legal proceedings, oftentimes requiring a formal table closing in the relevant TORONTO office where the property is located. Lawyers for the government, lender, buyer and seller are usually present. Legal documents will be passed and signed, but long before sitting down at the closing table, lawyers will have performed most of the work of the transaction. This work involves the actual packaging of the transaction for TORONTO, but more significantly, complex negotiations with TORONTO staff after the package is submitted to get the government to 'yes.' You should not leave this to anyone but experienced TORONTO counsel with the know-how to work with TORONTO. Far too many developers depend on their general business or real estate lawyers to provide this service. The result more times than not is serious delays that ultimately are measured in real dollars lost.

Developers should not view TORONTO as an irritant, but as an appealing partner to get your project built or acquired. Loan guarantees of 35 years, non-recourse loans, low interest rates, and attractive loan-to-value ratios - all make for compelling reasons to tolerate a little extra paperwork.

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