CC&Rs and Easements for Commercial and Mixed-Use Projects - - PowerPoint PPT Presentation

CC&Rs and Easements for Commercial and Mixed-Use Projects

Drafting and Amending CC&R Declarations and Easements: Best Practices for Commercial Developers

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THURS DAY, NOVEMBER 7, 2013

Presenting a live 90-minute webinar with interactive Q&A

David A. Herrigel, Principal, Hyatt & Stubblefield, Atlanta Robert M. Diamond, Partner, Reed Smith, Falls Church, Va.

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CCR’s and Easements for Commercial and Mixed-Use Projects

November 7, 2013

Prepared and Presented by:

David A. Herrigel

Hyatt & Stubblefield, P .C. Peachtree Center South Tower 225 Peachtree Street, N.E., Suite 1200 Atlanta, Georgia 30303 (404) 659-6600 dherrigel@hspclegal.com

• A. Goals of Governance

Structure

• 1. Long-term ownership,
• peration and maintenance of

common areas and amenities 2. Smooth and efficient operation and administration before and after development period 3. Foster an environment for all uses to succeed

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• A. Goals of Governance

Structure

(cont.)

• 4. Creation and enforcement of

community-wide standards of architecture, maintenance, and use 5. Maximize marketability, developmental control, flexibility 6. Create a community

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• B. Things to Avoid and

Why

• 1. Creating a nonresidential

association unless a reason exists to do so (e.g., ownership

• f common property)
• a. Nonresidential or commercial
• wners may not have time,

resources, or interest to be involved in the day-to-day planning and affairs of the community

• b. Creates unnecessary

administrative and other costs

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• B. Things to Avoid and

Why

(cont.)

• 2. Too much governance –

Service Areas v. Sub- Associations

• a. Administrative and other

costs of Sub-Associations

• b. Finding something for Sub-

Association to do

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• B. Things to Avoid and

Why

(cont.) 3. Direct interaction between nonresidential and residential

• wners
• a. Competing interests and

expectations for the community and for residential and nonresidential owners

• b. Different levels of

commitment and participation

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• C. Drafting

Tips/ Techniques

1. Know your audience

• Be user friendly
• Use plain language; Avoid legalese

2. Organization

• TOC
• Consistent use of defined terms

3. Be wary of forms 4. Flexibility v. certainty

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• D. Significant Document

Provisions

1. Membership and Voting

• Parcel owners and parcel

associations

• Composition of board of

directors

• Assigning votes to different

uses

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• D. Significant Document

Provisions

(cont.) 2. Allocation of assessment liability

• Allocation methods – Who

pays what? How to calculate?

• Different assessments for

different services

• Lien rights

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• D. Significant Document

Provisions

(cont.)

• 3. Easements
• Granting and reserving in CCR’s
• Development and construction

period

• Operational easements
• Public use of facilities

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• D. Significant Document

Provisions

(cont.)

• 4. Development Rights
• What declarant rights are

appropriate?

• What is an appropriate period of

control?

• Transition/ turnover to owner

control 5. The 1000 Pound Gorilla – Dealing with anchors and other big players

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Documenting Mixed-use Developments

Robert M. Diamond

rdiamond@reedsmith.com

Essential Principles

1. Anticipate the unexpected 2. Define shared components 3. Understand the relationship of the parts or uses 4. Opt for simplicity 5. Avoid complex, multi-level structures with varying membership 6. Documents must be flexible 7. Maintain control by the developer

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Essential Provisions of the Documents

• A. Definitions
• 1. Shared use areas; common areas; limited

common areas; reserved common areas

• 2. Mortgagee
• 3. Maintenance (operating expense) vs.

capital replacements (reserve expense)

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Essential Provisions of the Documents

• B. Easement rights
• C. Maintenance Responsibilities
• D. Expense allocation and assessment

provisions

• E. Voting rights and governance/decision-

making process

• F. Insurance
• G. Reconstruction and repair

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Essential Provisions of the Documents

• H. Enforcement provisions

I. Architectural control and use restrictions

• J. Mortgagee rights
• K. Amendment
• L. Termination
• M. Alternative dispute resolution vs. litigation

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Special Situations

• A. Leasehold and fee
• B. Seniors communities
• C. Timesharing parking
• D. Using airspace and land condominiums

before construction to finance the project

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Ballston Metro Center

• Half leasehold over Metro station; Half fee

simple

• Hotel, retail mall, parking garage and residential

condominium

• Components

The “box” – who owns who uses who fixes who pays

O = office C = residential condo H = hotel R = retail P = parking

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Leisure World of Virginia

• holes in the donut
• limited liability company
• Governance structure –

Each subassociation and each owner NOT in a subassociation is a member. Individual homeowners are NOT members. Five condominiums plus the developer. Developer has voting control until the project is completed.

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