CHAPTER 15.07. No Governmental Approvals Required

• Jurisdiction: United States

15.07. No Governmental Approvals Required

Another accretion onto opinion practice for real estate financing transactions has been the "no governmental approvals required" opinion. This opinion addresses whether there are governmental consents, approvals, authorizations, actions, filings, or registrations that must be obtained or made in order to make effective the borrower's execution and delivery of the transaction documents.

The no governmental approvals required opinion is fundamentally an opinion concerning contract formation and should be limited to those governmental approvals necessary for the execution and delivery of the transaction documents by the borrower. In this context, "execution and delivery" means the signing and delivery of the transaction documents sufficient to meet the applicable law for the formation of a contract. Although occasionally the opinion giver is asked to include in this opinion a reference to "performance of the borrower's obligations under the transaction documents," this request is not favored as it is tantamount to a "compliance with laws" opinion. Such a request should be avoided except in circumstances where the opinion recipient has reason to believe the subject entity is a regulated entity, in which case the request should be limited to certain specified laws likely to have a material effect on the entity's ability to perform its obligations under the transaction documents.¹³³

Some opinion givers seek to limit the no governmental approvals required opinion to the opinion giver's...