Can't We All Just Get Along?

The Impact of Master Community Developer Covenants on Builder Financing

If you are a construction lender who makes loans in master planned communities, you don't want to suffer an unexpected loss as a result of the developer's exercise of broad rights under its development covenants. If you are a builder, you want to know how those covenants may affect your ability to obtain financing. And if you are a developer of a master planned community, you don't want your covenants and rights to make financing too difficult for your builders. We'll show you how you can all work together.

Developers of master planned communities often impose builder covenants that prohibit sales of un-built parcels, mandate achievement of construction milestones by certain deadlines, require the builder to share profits, and impose master marketing or community enhancement fees upon all property transfers. More significant, the master developer may reserve a repurchase option that can be triggered by various events. These provisions, particularly the repurchase option-which establishes an artificial ceiling on the value of a lender's collateral-can pose a serious threat to a lender's security and thereby impede a builder's ability to obtain financing.

Don't Be Asleep at the Wheel

This breakfast seminar gives you the overview you need of the common elements of master developer covenants, the risks that they present to construction lenders, and the alternatives that can help the master developer, builder, and lender all get along.

We hope you will join us for this free, informative seminar.

Thursday, June 5, 2003
7:30 - 9:00 a.m.

Continental Breakfast will be served

Harbor Club, 801 2nd Avenue, 17th Floor - Norton Building, Seattle

(parking available in Norton Building Garage, enter off First Avenue)

Please RSVP by May 30, 2003 to Eileen Kraabel