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Commercial Real Estate Lenders Face Remedy or Relief Decision In COVID-19
As the COVID-19 pandemic continues to place enormous stress on the commercial real estate industry — with hotels and shopping centers shuttered or experiencing depressed occupancy, urban apartments losing tenants and the lack of federal stimulus — an increasing number of commercial real estate loans are facing current or impending borrower defaults. The second quarter of 2020 reportedly saw a 65% increase in the overall delinquency rate for commercial real estate loans over the prior quarter, and upwards of $26 billion in commercial real estate loans have been downgraded to a rating of CCC or lower by a credit agency as of the beginning of September.
Lenders in default scenarios face a choice of whether to exercise remedies and take over their collateral, or (as has become the "practice prevailing in the current environment for balance sheet lenders," according to Moody's) offer relief measures to their borrowers, either in the form of short-term forbearance or a permanent loan modification.
A variety of factors incentivize lenders to pursue workouts over foreclosure, particularly if they have faith in the long-term economic prospects of their collateral. Most obviously, workouts avoid the need to engage in costly and protracted litigation. Even an uncontested judicial foreclosure in New York can last more than a year. In addition, many lenders — particularly banks and insurance companies — are unwilling to operate (or lack the in-house expertise to successfully operate) commercial real estate and are hesitant to assume the environmental and other liabilities that are incumbent upon an owner or "mortgagee in possession" of real property.
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Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
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