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OnDemand Course

Subdivision Set-Aside Letter Fundamentals

Developers and contractors seeking Subdivision Improvement Agreements on Plat Agreements are required to post subdivision bonds. A typical requirement of a surety as a condition to issuing the subdivision bonds is the procurement of a set aside letter from a bank. This set aside letter is a commitment from the bank that it will make available and segregate an agreed amount of the construction loan to complete the subdivision improvements. Care and coordination in drafting and implementing the use of set aside funds is required to assure that the parties (contractors, surety and bank) accomplish their respective needs.

This OnDemand Webinar helps all parties to the transaction understand their respective needs and to be sure to properly draft and utilize the set aside agreement and thereafter use the funds set aside for their intended purpose. Complications occur if the contractor defaults, the bank fails or refuses to comply with its obligations or the bank is taken over by the FDIC.

This OnDemand Webinar will involve recommendations for the best use of the set aside letter and will provide guidance in the event of a contractor default or a bank failure. In this difficult financial climate, developers, contractors, sureties and banks will all benefit from a clearer understanding of their respective rights and responsibilities.


Runtime: 57 minutes
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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Overview

  • What Are They?
  • How Are They Used?
  • Who Do They Protect?

Drafting Considerations

  • Goal of Bank
  • Goal of Contractor
  • Goal of Surety
  • Relation to Engineer's Estimate/Construction Estimate
  • Separate From Balance of Construction Loan

Consideration During Construction Where No Default Has Occurred

  • Procedures for Release of Funds to Contractor and Subcontractors
  • Verification of Completed Work
  • Acceptance (Partial) by Public Entity
  • Stay Within Estimated Budgets
  • Avoid Commingling of Set Aside on General Construction Funds

Considerations If Contractor Defaults

  • Accounting
  • Use of Balance of Funds to Complete Improvements

Considerations If Bank Defaults

  • FDIC
  • Successor Bank
  • Collateral Deposit

Alternatives to Set Aside Letters

  • Collateral
  • Funds Control
  • Owner/Developer Financing
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More Program Information

Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

This course was last revised on September 9, 2011.

Call 1-866-352-9540 for further credit information.

No Credit Available

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

David Veis

David Veis

Robins Kaplan LLP

David C. Veis

  • Partner in the Los Angeles office of Robins, Kaplan, Miller & Ciresi L.L.P.
  • Practices in construction, surety and business litigation
  • Regularly conduct seminars and workshops on a variety of construction/surety issues
  • Member of ABA TIPS - Surety & Fidelity, ABA Forum and Los Angeles County Bar Association
  • J.D. degree, Southwestern University
  • M.A. degree, University of Southern California
  • B.A. degree, University of California – Los Angeles
  • Can be contacted at 310-552-0130 or [email protected]
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Why Lorman?

Over 33 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 388433
Published 2011
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