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Real Estate Opinion Letters

Counsel from a Scottsdale Real Estate Attorney

Within the practice of real estate law in the state of Arizona, opinion letters offer a reasonable way for people to express concerns and / or opinions about a real estate transaction, particularly those that involve mortgage loans. Although opinion letters are most commonly used in cases of real estate syndication, their actual functionality is usually used to address issues related to tax and securities matters. Therefore, the Scottsdale real estate lawyer that you choose to help you in your endeavors should be familiar with the aspects of real estate law as well as those connected to tax planning law.

The Function of Opinion Letters

Real estate transactions in the state of Arizona, as well as across the country, rely on a lender making an investment of funds. This, in turn, puts the obligation of repaying the funds from the loan on the borrower, whose performance will be expected to follow the stipulations of the contractual obligations to which he or she has agreed. The function of an opinion letter comes into play in relation to how the obligations of the contract have been assigned. Specifically, if there are concerns or issues regarding the obligations of a contract, an opinion letter can be used to express legal concerns.

At this time, the job of an attorney is to prepare an opinion letter that represents justification for the concerns of their client, aka the adversarial party involved in the process. Included in the responsibilities that are expected of the real estate attorney who is involved in the preparation of an opinion letter is the role of facilitating the due diligence that is expected of matters of this nature. More specifically, it is an attorney's job to act as the third-party opinion maker, thus assisting in the "opinion recipient's" investigation and understanding of the legal proceeding at hand.

Defining the Role of an Attorney

During this process, a lawyer will not be expected to make the "opinion giver" into a surety, nor will it be their responsibility to act as the player in one party's strategic ploy to reinvigorate certain business objectives. The most important purpose that an attorney can serve during this process is that of facilitating the due diligence that they ensure for the "opinion recipient" and his or her legal counsel. The due diligence that is required of the lender who is involved in the creation of an opinion letter must relate to the following set of criteria:

  • The signatories' abilities to bind a corporate or partnership borrower
  • The borrower's ability to perform the obligations defined within the loan agreement
  • The identification of potential conflicts to meeting said obligations, as well as any other obligations of the borrower that may have already been in existence
  • The potential (or actual) violation of the law upon entering into the loan, or pertaining to the activities of the borrower

Given the fact that the attorney is the person who is expected to take responsibility for ensuring the due diligence of the lender, the above tasks also fall on the shoulders of the legal representative involved in the situation. Therefore, it is of the utmost importance that the attorney employed to take on these responsibilities is fit for the job.

Reasoned vs. Clean Opinions

The concerns that are expressed in real estate opinion letters are generally categorized in one of two ways. The first is known as a "reasoned opinion," or "explained opinion." The second is referred to as a "clean opinion" or "bond opinion." Reasoned opinions are much more typically used in the transactional processes involved in real estate law, thus, it is this type of opinion letter that will be the focus of the following information.

Reasoned opinions are commonly requested and frequently rendered in real estate transactions. Essentially, these are third-party opinions that present a level of assurance that is derived from the professional judgment / prediction of how the matter under consideration will be resolved. While reasoned opinions are typical of real estate transactions, they are far less commonly used for real estate loan transactions.

The format of a reasoned opinion takes on the broad manner of a legal analysis that specifically focuses on the issue at hand. From this analysis, conclusive statements will be made which, in theory, present a balanced investigation into the policy considerations regarding both sides of the issue under concern. In essence, the reasoned opinion will serve to provide an evaluation of the potential legal risks that could affect the parties involved in the real estate transaction that is being discussed.

Contact a Scottsdale Real Estate Attorney for Effective Representation

The complexities involved in the preparation of an opinion letter cannot be denied. This is a complicated process of real estate law that must be handled by a knowledgeable attorney whose skills can account for the natural complexities involved. As such, both the sender and recipient of an opinion letter should waste no time in consulting with an attorney about the logistics of the process.

At the law office of Grant N. McKeehan, PLC, clients will benefit from the representation of a lawyer whose knowledge and skill level cannot be matched. Attorney McKeehan is both qualified and experienced in matters of this nature, and he is prepared to help clients who've found themselves involved in the proceedings of a real estate opinion letter that has been issued in the state of Arizona. Wondering how to write a real estate opinion letter? Contact the Scottsdale real estate attorney today for more information.

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Grant N. McKeehan, PLC - Scottsdale Estate Planning Attorney
Located at 4300 North Miller Road, Suite 220 Scottsdale, AZ 85251. View Map
Phone: (888) 913-8943 | Local Phone: (602) 791-6174.