Affiliated Business Arrangements

At Lewis Roca we have combined our traditional experience in real estate, regulatory ,and corporate matters to advise companies who are looking to enter into Affiliated Business Arrangements.

An Affiliated Business Arrangement (AfBA) exists when a person in a position to refer real estate settlement services has an affiliate relationship with, or a direct beneficial ownership interest in, an entity to which settlement business is referred such as a joint venture title or mortgage entity. These arrangements, if organized and operated and in accordance with the applicable regulatory framework, can draw upon the experience of the business affiliates and produce a revenue source for those business affiliates through their ownership interest in the entity that would otherwise not be available to them.

We counsel many types of organizations seeking to enter into AfBAs including real estate brokers, mortgage brokers, lenders, builders, title companies, and others involved in the real estate industry.

Our lawyers advise and counsel clients seeking to enter into these Affiliated Business Arrangements on all aspects of the proposed venture. Some of the services we provide in this developing industry include:

• Advising our clients on whether the proposed arrangement constitutes an AfBA;
• Counseling our clients on the regulatory requirements of the proposed AfBA under state and federal law;
• Assisting our clients with the various corporate and tax related aspects involved in the formation and organization of the proposed venture;
• Advising and counseling our clients with respect to the financing of the proposed venture;
• Negotiating and drafting the joint venture or other agreement to govern the AfBA;
• Negotiating and drafting the ancillary agreements for the venture such as employment agreements, services agreements, leases and the like;
• Assisting our clients in complying with RESPA and HUD regulations with respect to AfBAs;
• Drafting the appropriate AfBA disclosures required under RESPA; and
• Advising our clients on the safe harbors available under RESPA and HUD with respect to AfBA and analyzing compliance with those safe harbor provisions.

We understand the unique regulatory, corporate, and business challenges associated with AfBAs and have the experience and know-how to assist our clients in negotiating such challenges.