Message from the Chair
Let me begin with a warm thank you and show of appreciation for our Annual Meeting Programs Chair, Elena Antonetti. Annual Meeting planning usually takes place in December when most of us are extremely busy with year-end closings. Through Elena’s tireless efforts (and amazing juggling act), all of our programs were organized and submitted ahead of deadline. Please join me in thanking and congratulating Elena for her accomplishments.
This year’s ACC Annual Meeting will take place in Austin, TX, Oct 21-24. The Real Estate Network is presenting the following two programs: 1) Session #208 - Advanced Leasing in the Modern Age and 2) Session #804 - High Anxiety: Real Estate and Environmental Considerations in Mergers and Acquisitions. We encourage you to pre-register and do not hesitate to contact me if you would like the presenters to address any issues or topics you are coming across in your deals. Please be sure to also register for our Real Estate Network lunch. [View Annual Meeting sessions and business lunches]
We regularly utilize this space to advance the importance of networking. To the extent that your life has been hectic and you have not been able to keep up with networking activities, keep in mind that the ACC Annual Meeting IS the world’s largest gathering of in-house counsel. We have said it before and we will say it again: we want to meet you. Hope to see you in Austin, TX!
Darryl Austin, Chair Real Estate Network – firstname.lastname@example.org
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Legal Quick Hits
Upcoming Legal Quick Hits:
Executive Coaching Clininic
Thursday, July 19, 2018 at 3pm EST (7pm GMT)
Archived Legal Quick Hits:
Girls Leadership - Raising Resilient Girls
Presented: June 21, 2018
California Supreme Court Adopts New Independent Contractor Test: Ehat This Means for the Real Estate Industry
Presented: June 5, 2018
Keeping Your Clients Clean - Mitigating Environmental Risks in Real Estate Transactions
Presented: May 24, 2018
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Raghu Nandan, General Counsel & COO, Sunstreet Mortgage, LLC
Hi, Raghu. Could you tell us a little bit about your professional history?
I’ve been in the residential mortgage industry since 2002 in various operational roles working for mortgage banks that went through the boom (and bust) of the mortgage cycle. Following law school, I partnered with a good friend to setup a litigation practice. After a few years of that, I came back to the mortgage industry, and am presently one of the members, and General Counsel & COO of Sunstreet Mortgage, LLC.
Why did you decide to join ACC? What positions have you held within ACC?
I was at a state bar convention where one of the speakers noted that the ACC was an invaluable resource for in-house counsel. I joined the ACC the next day, and it’s been as invaluable (if not more) as that speaker suggested. I have been the Secretary of ACC’s Real Estate Network, and am presently the Vice-Chair. I’ve also had an ad hoc role in organizing local regulatory roundtable events as part of the ACC’s Regulatory Working Group.
What do you particularly enjoy about your current role?
I like working with the leadership team within our network. Darryl Austin (our Chair) and I have a unified vision for the Network this year, and we are focused on achieving our goals. We have an incredibly involved leadership team with a lot of energy between Elena Antonetti, Erik Lindberg, Geeta Dharmappa, Erik Valderhaug, and Jessica Garner, as well as the guidance of our past Chair, Dawn Haghighi, and the support of ACC’s great team. I look forward to our monthly calls as the energy of the monthly calls just carry over into my work! I also get to meet different attorneys from different backgrounds, whether via telephone or in-person, due to my involvement in leadership and in ACC.
You are currently the Chief Operating Officer, as well as General Counsel, of your company. What advice would you give to in-house attorneys interested in taking on more “business-type” roles within a company?
I love having to wear dual hats because not only do I have to recommend what we should or shouldn’t do, but then have to implement that. As a company, our culture is to proceed with securing “buy-in” from our team rather than simply implementing decisions/changes. This requires a tremendous amount of discussion and explanation to ensure everyone is aware of the reason for the decision or change. I hear about challenges that different groups will face as a consequence of a decision or change, and that may require me to recalibrate the manner in which we would execute these changes. I guess this is a long-winded way of saying that it doesn’t matter if you are right if you cannot convince your team of the reason why they should trust and implement your decision…that requires a commitment to actively listening and being willing to solve a problem in a manner that you didn’t envision when you first set out to solve it. Of course, there will be situations where you have to move quickly, and may not have the luxury to or time to secure buy-in; in those instances, you do your best to communicate and be prepared to handle the questions that would arise from your decision.
Given the regulations pertaining to mortgage lending, you are likely presented with many legal issues for which you need to consult with outside legal resources. What is your favorite outside legal resource?
ACC, without a doubt. I reach out to fellow-ACC members as well as lawyers at law firms that I met through the ACC.
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Articles about the Intersection of Real Estate Law and Technology
This Section highlights recent developments in real estate technology (i.e., “proptech”) to ensure our members stay abreast of the innovations that may impact the business and legal framework of real estate.
Institutional lenders are still the primary financing sources for traditional commercial real estate transactions, however, many investors believe that Crowdfunding and cryptocurrency (through “initial coin offerings”) will become increasingly common sources for commercial real estate funding. Below is a short article from Mark Roderick at Flaster Greenberg, PC explaining the distinctions between cryptocurrencies and Crowdfunding. The article below also offers basic advice about the application of securities laws to cryptocurrencies.
CROWDFUNDING AND CRYPTOCURRENCIES
Cryptocurrencies are hot. And often the sale of cryptocurrencies is referred to as Crowdfunding. Unfortunately, the use of “cryptocurrencies” and “Crowdfunding” together creates confusion about both, along with some pretty serious legal risks.
We use “Crowdfunding” to mean raising money for a business or other venture online. We say “donation-based Crowdfunding” when we’re talking about Kickstarter, where people ask for donations. We say “equity-based Crowdfunding” when we’re talking about raising money from investors, who receive a stock certificate or some other security.
A cryptocurrency is, well, hard to pin down. It’s a transaction registered in a distributed, secure database. Because it exists in limited quantities and is secure, it has value. Like anything of value, it can be used as a currency. For purposes of this post, the key feature of a true cryptocurrency is that is has value of itself, like a nugget of gold.
You use Crowdfunding to sell shares of stock. Obviously, the paper certificates representing the shares of stock have no value by themselves, they have value only to evidence ownership in the business that issued the certificates or, more exactly, in the cash flow the business is expected to generate. So it wouldn’t make sense to say “I’m selling nuggets of gold using Crowdfunding.” The nuggets of gold have an intrinsic value without reference to the cash flow of anything else, or at least you hope they do. I can go shopping with a cryptocurrency like Bitcoin or Ethereum, just as I can shop with US dollars or, historically, with gold.
This is where things get tricky and words matter. The blockchain – the technology underlying all cryptocurrencies – can be used for a lot of things other than cryptocurrencies. As it happens, one of the things the blockchain can be used for is to keep track of stock certificates. In fact, the blockchain works so well keeping track of stock certificates that it will undoubtedly be used by (or replace) all public stock transfer agents within the next five years.
What’s happening today is that companies are selling what they call “cryptocurrencies” that are really just interests in the future operations of a business, i.e., really just hi-tech stock certificates. Cool, they’re using blockchain technology to keep track of who owns the company! But that doesn’t mean what you’re buying is really a cryptocurrency and that you’re going to get rich like the early buyers of Ethereum.
Words are powerful, and the confusion around cryptocurrencies is deepened by the nomenclature. Sales of cryptocurrencies are often referred to as “initial coin offerings,” or ICOs, which implies a similarity to “initial public offerings,” or IPOs. Yet if we’re being careful, the two have nothing in common. In an IPO a company sells its own securities, which have value only based on the success of the company. In an ICO somebody sells a product that has intrinsic value of itself.
Ignoring the difference is going to land someone in hot water, probably sooner rather than later. A company that sells something it calls a cryptocurrency but is really just a share of stock is selling a security, even if that company has an address near Palo Alto. And a company that sells a security is subject to all those pesky laws from the 1930s. If you sell a cryptocurrency that is really just a hi-tech stock certificate, then not only do you risk penalties from the SEC and state securities regulators, you’ll also face lawsuits from your investors if things don’t go as planned.
How to know whether you’re selling a true cryptocurrency or a hi-tech stock certificate? Here are some tips:
- If the cryptocurrency represents an interest in real estate, it’s probably a security.
- If the value of the cryptocurrency depends on the success of the business, it’s a security.
- If the cryptocurrency is marketed as an investment, it’s probably a security.
- If the value of the cryptocurrency depends what the buyer does with it, rather than the success of the business, it’s probably not a security.
- If the cryptocurrency merely gives the holder the right to participate in a group effort (g., the development of software), it’s probably not a security.
- If you’re selling the cryptocurrency in lieu of issuing stock, it’s probably a security.
Mark Roderick is a corporate and securities lawyer who is one of the leading Crowdfunding and Fintech lawyers in the United States. The following is a link to Mark’s blog https://crowdfundattny.com/
Below are additional links to articles about innovations or developments that have the potential to transform real estate transactions.
Sweden’s progress towards adopting a blockchain system to track ownership of real property: https://propmodo.com/sweden-might-first-country-adopt-blockchain-title-registry/
How the blockchain may affect real estate investing: https://www.forbes.com/sites/forbestechcouncil/2018/03/02/how-blockchain-can-really-impact-real-estate-investing/#63fa7c307c1c
Google is considering hiring a construction startup to build thousands of apartments for its employees in the San Francisco Bay area: https://www.forbes.com/sites/forbestechcouncil/2018/03/02/how-blockchain-can-really-impact-real-estate-investing/#63fa7c307c1c
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The ACC Financial Services and Real Estate Network Regulatory Roundtable
The ACC Financial Services and Real Estate Networks Regulatory Working Group presented an exciting panel of regulators at their most recent Regulatory Roundtable on April 19 in New York City. Over 80 people registered to come to the law offices of King & Spalding for drinks, delicious food, and most importantly, a fascinating discussion by a distinguished roster of regulators. Co-Chairs Dawn Haghighi and Laura Dorman were delighted to be able to present as speakers James MacDonald, the Director of Enforcement for the US Commodity Futures Trading Commission; Marc Berger, Director of Enforcement, NY Division, SEC; Celeste Koeleveld, the recent general counsel of the NY Department of Financial Services; and Dick Walker, former General Counsel and Director of Enforcement at the SEC and general counsel of Deutsche Bank, and now partner at King & Spalding. Brian Michael, a former US Attorney and head of compliance at Fox, where he became active in the ACC, served as moderator. Laura Dorman, Managing Director and Associate General Counsel of Berkeley Research Group, provided opening remarks, especially thanking the ACC team that helps organize and promote these Roundtables, including Mary Blatch, LaToya Tapscott, and Tori Payne.
Dawn, general counsel of PCV Murcor, who served as chair of the ACC Real Estate Network, and Laura, former chair of the ACC Financial Services Network, organize the Regulatory Roundtables to give ACC members and other interested in-house counsel an opportunity to meet regulators in an informal and intimate setting, and to provide a forum in which to ask questions and comment on regulations. If you would like to participate in organizing a Roundtable in your area, please contact Dawn Haghighi or Laura Dorman, whose contact information is contained in the ACC Member Directory.
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Spring Newsletter Quote
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The Real Estate Committee is over 2,000 members strong, and one of our best resources is each other. The eGroup postings are a forum for members to exchange ideas, share best practices, template forms, and many other resources. Members may submit eGroup inquiries, and any member may respond. If you are concerned about using your name, you may respond anonymously. As a reminder, eGroup responses are informational only, and are not considered legal advice or counsel. We highly recommend that you take advantage of this resource. Postings may be found here.
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Real Estate Network members who are interested in authoring a blog post, an on-line article or an ACC Docket article should contact Geeta Dharmappa at email@example.com.
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Call for Resource Library Suggestions
We want to hear from you! What forms, templates or tutorials would you like added to the Resource Library. Please email your requests to Elena firstname.lastname@example.org.
In addition, every month ACC hosts a webcasts that goes over how to search the Resource Library and explains all that it offers. It is a 30-min presentation and the archived version of previous presentations can be found here.
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Around The Horn
Are you working on something interesting or innovative? Have you recently been promoted or changed jobs? Do you have a blog or an article that our other members would find informative or enjoyable? Then let us know about it—this is your time to be in the spotlight!
Contact us at email@example.com, or firstname.lastname@example.org so we can share your news with other members.
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