Commercial Real Estate Loan Documentation Best Practices PART 1:  Commitment Letter Following credit approval, the formal real estate lending process typically starts with a commitment letter which seeks to establish the primary specific terms and conditions of the proposed financing. It is an opportunity for the parties to ensure that they are in basic agreement with the loan amount, repayment terms, interest rate, collateral, guaranty requirements, and fundamental representations and covenants. The commitment letter fleshes…

In a case of first impression, Walnut Creek Townhome Association v. Depositors Insurance Company, the Iowa Supreme Court has held that insurance appraisers may determine the cause of loss in addition to the amount of damage. Walnut Creek Townhome Association submitted a claim to Depositors Insurance Company for hail damage to the Association’s roofs.  Depositors felt that damage had been caused not by hail, but rather by defective shingles.  As part of the dispute,…

This past legislative session, the Iowa legislature created a sales tax exemption for the “sale or furnishing by a water utility of a water service in the state to consumers and users.”  Don’t get too excited about this tax exemption, though, the legislature created a new 6-percent Water Services Excise Tax (“WET”) under Iowa Code chapter 423G on the “sale or furnishing by a water utility of a water service in the state to consumers…

A recent decision from the Iowa Court of Appeals highlights a significant trap for contractors working on commercial construction. LM Construction, Inc. v. HGIK Hospitality, LLC, began when property owner HGIK Hospitality (“Property Owner”) hired general contractor DDG Construction (“General Contractor”) to build a commercial hotel in Ames. General Contractor hired subcontractor ESC, LLC (“Subcontractor”) to perform work on the project. Subcontractor hired LM Construction (“Sub-Subcontractor”) to install drywall. Under Iowa Code § 572.33,…

Last week, KCCI in Des Moines reported that the new off-ramp being constructed on Interstate 35 near Ames must be torn down and rebuilt due to a mistake of “several inches.” As reported, the mistake was human error in the consideration of elevation issues. Aside from the frustration to those people who are anxiously awaiting the $23 million project to be completed for use in their daily commute, those “several inches” of error are likely…

The Cedar Rapids Gazette has published several articles critical of the University of Iowa’s handling of the construction of the new Stead Family Children’s Hospital. The hospital itself is impressive and life-changing; just take a look at ESPN’s segment on “The Wave” and its impact on children, fans, players, and coaches. No matter how much the new hospital means to the community and the children it serves, the University of Iowa is nevertheless receiving…