Steven W Bender - Modern Real Estate Finance and Land Transfer: A Transactional Approach

MODERN REAL ESTATE
FINANCE AND
LAND TRANSFER

EDITORIAL ADVISORS

Rachel E. Barkow

Segal Family Professor of Regulatory Law and Policy

Faculty Director, Center on the Administration of Criminal Law

New York University School of Law

Erwin Chemerinsky

Dean and Professor of Law

University of California, Berkeley School of Law

Richard A. Epstein

Laurence A. Tisch Professor of Law

New York University School of Law

Peter and Kirsten Bedford Senior Fellow

The Hoover Institution

Senior Lecturer in Law

The University of Chicago

Ronald J. Gilson

Charles J. Meyers Professor of Law and Business

Stanford University

Marc and Eva Stern Professor of Law and Business

Columbia Law School

James E. Krier

Earl Warren DeLano Professor of Law

The University of Michigan Law School

Tracey L. Meares

Walton Hale Hamilton Professor of Law

Director, The Justice Collaboratory

Yale Law School

Richard K. Neumann, Jr.

Professor of Law

Maurice A. Deane School of Law at Hofstra University

Robert H. Sitkoff

John L. Gray Professor of Law

Harvard Law School

David Alan Sklansky

Stanley Morrison Professor of Law

Faculty Co-Director, Stanford Criminal Justice Center

Stanford Law School

ASPEN SELECT SERIES

MODERN REAL ESTATE
FINANCE AND
LAND TRANSFER

A Transactional Approach

Sixth Edition

Steven W. Bender

Professor of Law and Associate Dean for Planning and Strategic
Initiatives

Seattle University School of Law

Celeste M. Hammond

Professor of Law and Director of Center for Real Estate
The John Marshall Law School

Robert M. Zinman

Professor of Law (Ret.)

St. John's University

Copyright 2018 Steven W. Bender, Celeste M. Hammond, and Robert M. Zinman.

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To my mother, Irene, and to
my son Dominic

S.B.

Love to my husband,
Michael Pensack,
my children,
Geoffrey and Elizabeth,
and my grandchildren,
Hazel & Lander Foubert and Gerard Francis Xavier Hammond

C.M.H.

To Ruth and Arthur Zinman
and to Lillian and Noah Janel

sine qua non

R.Z.

Summary of Contents

Contents

McMaster v. Strickland

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2 . The Function of Postconstruction Financing

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Problem 4-2

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Notes and Questions

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National Bank of Washington v. Equity Investors

Chapter 7

1 . The Mortgagees Right to Accelerate the Indebtedness

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Washburn, The Judicial and Legislative Response to Price Inadequacy in Mortgage Foreclosure Sales

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Heikkila v. Carver

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3 . Restrictive Covenants

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Mass. Ann. Laws ch. 175, 63(7)

Chapter 12

Shenkman and Marshall, Commercial Real Estate and the 1993 Tax ActParts 1 and 2

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Problem 17-4

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Preface

This sixth edition builds on the pedagogical vision of the first edition (then titled Modern Real Estate Financing: A Transactional Approach, by Michael Madison and Robert Zinman), the second edition (that added Steven Bender as coauthor), and the third edition (adding Celeste Hammond). We would like to thank Michael Madison, who has retired from teaching and from this sixth edition, for his contributions to prior editions and foresight on the need for practical skills-based legal education in complicated areas such as real estate transactions.

It has been our experience that most law students are more stimulated when they see some practical value in what they are learning in the classroom. The professor can stimulate students intellectual curiosity to deal with complex issues in land transactions by simulating the real-world conditions of practice and avoiding pedantic discussions of peripheral issues (such as the doctrine of equitable mortgages, which rarely arises in a commercial real estate practice). For this reason, our casebook follows the transactional approach.

In our judgment, freedom of contract still remains the dominant theme in commercial real estate transactions despite the regulatory impact of public law on land investment and development. As long as the real estate project does not fail and the developer remains solvent, general rules of law will normally apply only in the absence of an agreement to the contrary. Perhaps this is because in most commercial real estate transactions the parties will be sophisticatedthey will be represented by counsel and in a position to defend themselves at the bargaining table. For example, at common law the general rule (absent language to the contrary in the mortgage note) is that a lender does not have to accept voluntary prepayment of the mortgage indebtedness prior to maturity. We examine this rule in . But it is of equal if not greater importance for students to see what a typical prepayment privilege provision looks like and to understand the legal consequence of using one drafting approach as opposed to another. As counsel someday, students will be able to not only solve present problems but also avoid potential problems for their clients. This is what real estate planning that adds value to transactions is all about.