Legal Issues in the Development Process

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					                    Legal Issues in the Development Process
                                    Spring 2007 11.340J/15.658J
                                   March 30, 2009 to May 13, 2009
                    http://stellar.mit.edu/S/course/15/sp09/15.658/index.html

Instructors:
Lynn Fisher, Assistant Professor, 617-252-1685, lfisher@mit.edu
Jamie Pennington, 617-733-1833, jpennington@criteriondp.com

II. Meeting Times & Place:
Mondays 9:00am to 10:00am (EXCEPT March 30, April 13, and April 27, when class will meet
        from 8:30am to 10:30am)
Wednesdays 8:30am to 10:30am
Classes to be held in W31-301.

III. Course Description:
The objective of this course is to explore legal issues raised in the process of real estate
development. The course will provide the opportunity to work directly with attorneys
knowledgeable in the field and specializing in the topics introduced in class. The course will
focus on issues of U.S. law, but where possible, international concerns may be introduced. The
course assumes no prior background or familiarity with the law. The specific topics to be
addressed include: entitlements, choice of ownership entities, office leasing, retail leasing,
construction loan agreements, equity partnership agreements, taxation, disposition tax issues,
and REITs.

IV. Method of Instruction:
Readings, lectures, role play exercises with practicing attorneys, weekly written briefs, and a
final written assignment. Students will devote considerable time outside of class reading in
preparation for lectures and role play sessions. Some team work outside of class may be
required.

V. Reading Assignments:
Readings and other course materials will be posted to the Stellar web site at the beginning of
the semester, but new material may be added from time to time. There are no required text
books for this course. The case material and readings for role play exercises should be read
prior to the Monday class meeting in which the students will prep for the role play session.

VI. Attendance:
Attendance and participation in all classes are required. This course is designed to help
students learn through interaction with their instructors, classmates and legal practitioners.
Monday classes will primarily be utilized to introduce topics, organize teams and prepare for
Wednesday role play sessions.

VII. Grading:
A final letter grade will be assigned at the end of the spring term. With this in mind, final grading
will be based on the following criteria:

               Weekly written briefs (small assignments)             30%
               Class Participation                                   30%
               Two Written Assignments (small groups)                40%
VIII. Course Schedule (subject to change):

      Week 1
      Monday        March 30      Group work     Intro to course
                                                 Group brief due end of day

      Wednesday     April 1       Role Play    Entitlements
                                  Attorneys Deborah Horwitz and Mark Bobrowski

      Week 2
      Monday        April 6       Group work     Forms of Ownership
                                                 Group brief due end of day

      Wednesday     April 8       Role Play     Forms of Ownership
                                  Attorney Stephen Nolan


      Week 3
      Monday        April 13      Role Play      Office Lease
      *** Special 8:30 to 10:30 MONDAY CLASS     Individual briefs due at beginning of class
                                  Attorneys William Forbush and John Rattigan


      Wednesday     April 15      Role Play      Retail Lease
                                                 Individual briefs due at beginning of class
                                  Attorneys William Forbush and John Rattigan


                    First Written Assignment due April 17 at 5:00p.m.



      Week 4
      Monday        April 20      No Class – Patriots Day

      Wednesday     April 22      Lecture         Equity Agreements
                                  Attorney Elliot Surkin


      Week 5
      Monday        April 27      Role Play      Equity Agreements
      *** Special 8:30 to 10:30 MONDAY CLASS     Individual briefs due at beginning of class
                                  Attorney Elliot Surkin


      Wednesday     April 29      Role Play      Workouts
                                                 Individual briefs due at beginning of class
                                  Attorneys John Sullivan, Fred Klein, and Frank Burt
Week 6
Monday        May 4         Lecture       Taxes & Disposition
                                          Individual briefs due at beginning of class
                            Attorney John Grumbacher and Richard Talkov CPA

Wednesday     May 6         Lecture       Taxes & Disposition
                            Attorney John Grumbacher and Richard Talkov CPA

Week 7
Monday        May 11        Lecture       REITs
                                          Individual briefs due at beginning of class
                            Attorney Gilbert Menna

Wednesday     May 13        Lecture        REITs
                            Attorney Gilbert Menna

              Final Written Assignment due May 14 beginning of class


All briefs and written assignments are to be uploaded to the Stellar Web site.
                        Legal Issues in the Development Process
                               Spring 2009 11.340J/15.658J
                                         BRIEFS

Six briefs will be written either by students individually or by groups of students who
assume the perspective a particular (assigned in class) actor in the case for the first five
weeks of the course. These briefs should prepare students for role plays. In particular,
the brief should specifically address the proposed term sheet in the case. Using this
term sheet as a starting place, explain what portions of the term sheet you would revise
and why. Suggest specific changes. You may also list questions or ideas that arise in
about the best way to accomplish a particular business or legal goal. These questions
can be addressed in the role play as you interact with legal counsel. Additional direction
or instructions about the focus of each brief may be given in class.

For the final two weeks of class, two additional individual briefs in which students
respond to questions based on that week’s readings will be required. The questions will
be provided on Stellar.

Each brief should be no more than 1 page. It is acceptable to create lists using bullet
points in the briefs, although the individual bullet points should use complete sentences
and reflect complete thoughts. Individual briefs should be uploaded to the Stellar
website prior to the role play or lecture for each topic as noted on the class schedule
and on Stellar. For group briefs, you will be given 45 minutes - 1 hour to work as a
group in class on Mondays and will upload the brief at the end of class. In order to
engage these topics successfully, you must read the assigned readings and the
relevant portion of the case for that week prior to writing the briefs. The brief
should demonstrate that you have engaged this material.
                        Legal Issues in the Development Process
                               Spring 2009 11.340J/15.658J
                              WRITTEN ASSIGNMENTs
                            Due: April 17, and May 13, 2009

Assignments are due by the end of day on Friday, April 17 and at the beginning of class
on Wednesday, May 13. They are to be done in groups of 2 to 3 individuals. Groups
larger than 3 are not permitted.

Each Assignment is to review one of a possible 3 court cases (found on Stellar) and to
write a report linking the main legal issues of the case to the business issues in real
estate development. Students may need to read and understand other cases or
legislations that they determine are relevant to the case at hand or that provide insights
as to the nature of the legal dispute. In addition, students may find that searches of
popular press sources around the time of the dispute may provide additional context for
describing and discussing the parties and real-world issues at hand. The extent to
which any of these additional search are necessary or valuable depend on the particular
case. Do not focus on or discuss at length procedural issues that distract from the
substantive legal issues debated by the case

In particular, the report should not exceed 8 pages with minimum 1.5 lines spacing and
should address the following questions.

1) What are the facts of the dispute? Be sure to briefly lay out the context of the case
and describe the parties to the litigation.

2) What are the main legal issues that are being contested? How do the legal issues
relate to the business issues surrounding the facts of the case?

3) Describe the arguments presented by parties on either side of the case with respect
to the legal issues identified in part 2.

4) Describe and discuss the court’s decision.

5) Does the outcome in this case differ from decisions in prior cases or from prior
interpretations or applications of the law? If so, describe. Does the decision in this case
leave any issues unresolved?

6) What do you think are the 2-3 main implications of the legal issues involved in this
case for real estate developers or investors generally? Notice that while some of these
cases may depend on state-specific laws, you may wish to address the fundamental
tensions or development problems that this case exemplifies.