Loan Commitments

Last Updated on Tuesday, 23 May 2017 10:19 Written by Chris Griswold Tuesday, 23 May 2017 10:19

This month we talk about an often overlooked issue in lending and a lender’s potential liability to a borrower, under certain circumstances.  This should be helpful to everyone… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Loan Commitments

Hypothetical situation:  A borrower is buying a portfolio of chain restaurants with a portfolio price of $50M, and an unconditional liquidated damages penalty of 10% of the purchase price (i.e., $5M) payable by buyer to seller is not allowed to be conditioned upon my buyer’s inability to actually, ultimately obtain financing (actually not an uncommon purchase/sale document concept when a buyer is buying a chain of stores from a large, national franchisor – since all franchisors feel that they’re pretty big and bad enough to get whatever they want….  go figure!).

True, most contracts have an escape clause about buyer’s failure to obtain financing (just not under this sort of a deal, which commonly has liquidated damages penalties due to seller/franchisor lest buyer/potential francisee fails to actually close – all predicated upon seller’s fervent belief that everybody and their brother wants to buy their licensing rights and become proud franchisees).  So, there the buyer is….  Potentially owing lots and lots of money (that can’t be secured under any financing vehicle, but must basically be cold cash) if buyer can’t get financing….

Lenders, be sure and have “hold lender harmless” statement in favor of the lender in your loan commitment letter.  Otherwise, your bank’s insurance company might be paying your insurance claim.  This can also happen if the loan turns out to be larger than the bank’s legal lending limit and the banker can’t find a fellow loan participant.  Either way, it’s a potentially big, big problem, with an easy fix.

What My Clients Are Saying

“It has been a pleasure working with Mr. Griswold. He knows the commercial real estate business well and has been an integral element in our deal making process on some very key transactions.”
Kris Davis /  Industrial and Investment Advisor / NewMark Grubb / Oklahoma City, Oklahoma

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Last Updated on Wednesday, 5 April 2017 01:27 Written by Chris Griswold Wednesday, 5 April 2017 01:27

Waters of the United States (WOTUS), we’ve heard a little bit about this in the past couple years.  Accordingly, I’ll answer the most commonly asked questions I’ve received about this topic.  This should be helpful to everyone… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).


Q:  Whether Oklahoma builds more in-fill development nearby its rivers in urban areas (whether in OKC or Tulsa) or in its now more rural areas which involve lakes, streams or other bodies of water – either will make highly relevant the recent changes in the Federal Government’s jurisdiction over such waters as set forth in the “Waters of the United States” (“WOTUS”) as codified in 33 USC 1344.  What is it?

A:  Through the Clean Water Act of 1972, WOTUS gives two (2) federal agencies, the “EPA” and the “Army Corps of Engineers,” large regulatory authority over land use.  The EPA regulates the discharge of contaminants/pollutants into WOTUS and the Army Corps of Engineers governs over the discharge/dredging of fill material into the WOTUS; as well as how to go about defining those waters that shall be WOTUS.

Q:  What’s the big deal about how WOTUS is defined?

A:   Those waters that are defined as WOTUS (and hence subject to EPA and Army Corps of Engineers control), shall consequently trigger the potential need for different permits to be obtained under the Clean Water Act of 1972 before any land use/development can occur.

Q:  If the Clean Water Act has been around since 1972, what’s news?

A:  On August 28th, 2015, the EPA and the Army Corps of Engineers issued a “New Rule.”

Q:  What does the New Rule do?

A:  It broadens out the meaning of WOTUS to include waters that are not only traditionally navigable, known as traditional navigable waters (“TNW’s”), and interstate waters, territorial seas, but now also tributaries and all waters adjacent to TNW’s and the foregoing.

Q:  What are the practical results of the New Rule?

A:  The EPA and the Army Corps of Engineers will now have expanded jurisdiction to decide whether certain waters are WOTUS and thus subject to Section 404 permitting under the Clean Water Act; all to be decided prior to the required permits being issued under the Clean Water Act.  In some cases, prairie potholes have been decided to be WOTUS after having been found to have a significant nexus to TNW’s, along with waters lying within 100 year floodplains or those waters within 4,000 feet of the high tide line or ordinary high water mark of a TNW, among others….

Q:  What is the permitting process like under Section 404?

A:  It’s lengthy and expensive.  The U.S. Supreme Court found under Rapanos v. United States (2006) that an average applicant spent over $270,000 in transaction costs (not including required mitigation costs) and waited an average of 788 days for a permit to be issued.  You can call the Army Corp of Engineers for a “jurisdictional determination” about sixty (60) days ahead of time, but expect delays as a practical matter.

What My Clients Are Saying

“I would certainly like to commend Chris for his efforts is a recent transaction and for keeping communications with distant legal departments of large companies informed and involved as regarding the negotiations.  Chris Griswold has been a real asset in bringing together people and has the ability to center the focus on the transaction and that is really needed in today’s commercial real estate market.  Even though we may be experienced and seasoned veterans of commercial real estate, it’s good to have qualified, energetic, and capable legal support ready to move the process along at the faster rate we need today.  My thanks to Chris for his efforts in this most recent exchange and transaction which served everyone satisfactorily.”
Irmon Gray / Broker / NAI Sullivan Group / Oklahoma City, Oklahoma

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Ice, Ice Baby

Last Updated on Tuesday, 10 January 2017 09:20 Written by Chris Griswold Tuesday, 10 January 2017 09:20

Icy, snowy, slippery sidewalks (say it 3 times fast).  We’ve all seen our share this winter.  In response to a large number of inquiries I’ve received from concerned hotel, restaurant, office and retail owners and tenants, as well as the several requests I’ve received from our local insurance underwriting community that I write on the topic, I wanted to write a short piece in the hopes it saves some of you needless worry and, possibly, money.  Accordingly, I’ll answer the two most commonly asked questions from the groups mentioned above.  This should be helpful to everyone… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Ice, Ice Baby (Vanilla Ice, To The Extreme, 1989)

Question #1:  “If I put out snow melt on my sidewalks, does it somehow serve as an admission of guilt if someone should subsequently slip and fall on the premises?

Answer:           No.  The very act of putting out snow melt, etc… in an effort to prevent people from slipping, falling and hurting themselves cannot later be used against you.  In other words, you can’t use someone’s efforts to avert an accident against them later on if and when the accident occurs.  If you could, it would be tantamount to saying “…I’m suing you for trying to help me.”  Now, there are other relevant factors including, but not limited to, whether or not another person slipped and fell in the same area just before the plaintiff slipped and fell, whether you put out enough – and many others.  However, the fact that you put out snow melt, in and of itself, is not an admission of guilt; nor can it later be used against you in showing negligence.  Accordingly, don’t be afraid to put out snow melt when the weather gets bad.  However, and most importantly, when you put it out, put out enough to really do the job (including getting out your shovel if need be so the area(s) in question are clean, clear and safe).

Question #2:  “When should I put out snow melt?

Answer:          It depends.  Actually, the legally correct answer to this question is “when it’s reasonable to do so.”  Say what??!  I know…, it’s legalese and not really clear.  However, you can pretty much nail it down if you ask yourself the following question: Given the current weather conditions; if my mother came to see me at work today, should I put out snow melt?  If the answer is yes, put it out.  Otherwise, don’t sweat it.

What My Clients Are Saying

“Chris Griswold was instrumental in negotiating a very solid, long-term lease for our new bank branch in Oklahoma City.  His industry knowledge helped us avoid several potential pitfalls with a landlord that was somewhat difficult at times.  It was a pleasure to work with Chris because of his professional style and easy going demeanor.”
Charlie Crouse / President / Summit Bank / Oklahoma City, Oklahoma


From 1/21/16 Oklahoman Article (which is an adaptation from the above):

“Businesses should use reasonable care in preventing icy accidents”

Q: When is it reasonable for commercial establishments to put out snow melt?

A: Ask yourself this question: “Given the current weather conditions; if my mother came to see me at work today, should I put out snow melt?” If the answer is “yes,” put it out.

Q: If businesses put snow melt on their sidewalks, does it serve as an admission of guilt or negligence if someone should subsequently slip and fall on the premises?

A: No. You can’t use someone’s efforts to avert an accident against them if and when an accident occurs. However, and most importantly, when you put out snow melt, put out enough to really do the job, including getting out your shovel if necessary so the areas in question are clean, clear and safe.

Q: Are there conditions in which operators could be sued by accident victims, such as if they didn’t put out sufficient snow melt?

A: Perhaps, say if someone had fallen previously and the business operator had failed to timely remediate the area in the interim. Other considerations might be the state of the victim’s physical condition prior to their fall and/or whether such victim has previously filed suits for other alleged falls in their lifetime, and/or how quickly the weather changed after the first fall so as to determine whether the operator had enough time to use reasonable efforts/reasonable care in preventing the subsequent fall.

Q: In exercising the use of reasonable care, does potential liability differ if the business operator owns or leases the property?

A: Yes. An owner of a commercial, non-residential project who’s leased it to a tenant operator to use and maintain won’t likely be liable for snow/ice removal on the tenant’s demised premises, except for the common areas of the project (if any) which will usually remain the responsibility of the owner of the commercial project.
Owners of residential, commercial property (who are apartment operators) should instead use “best efforts” to keep their properties as free as possible of ice and snow, as people have to get in and out of their homes. Owners of rental homes will usually look to their tenants to keep the home free of ice and snow (since the tenant lives there alone, without landlord or any of landlord’s employees present on a regular basis). However, if an accident arguably results at the rented home from some underlying construction defect of the house that is beyond a tenant’s control to mitigate or manage, then the owner of such rental home could be liable and joined as a defendant in any subsequent lawsuit.


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