What factors should a tax or real estate advisor consider when determining whether or not properties are "like-kind" to each other in a §1031 exchange? In the context of real property exchanges, the meaning of "like-kind" is generally straightforward. A variety of rulings, however, demonstrate the potential complexity of the definition. Are water rights like-kind to fee simple real estate? Are timber-cutting rights conveyed by timber deed like-kind to fee simple?

So...you want to play with the big boys. Do you want to turn away from your woes in the stock market and strike it rich in the world of investment grade real estate, but don't have a spare $5,000,000 lying around (See "woes in the stock market" above)? Or perhaps you are looking for an exit strategy for your most recent development, but can't find that investor with a spare $5,000,000 lying around.

Nothing commands the attention of everyone in the title insurance industry like the word "Defalcation". Even the slightest suggestion that one has occurred, draws the instant attention of everyone, from the CEO of the underwriter involved to the most junior clerical staff. Unlike a loss on a single policy, defalcations often involve losses in the millions on a number of policies. Defalcations also require thousands of man-hours to investigate and settle the resulting claims.

Most first year law students are familiar with the doctrine of merger which states that when one entity obtains both a greater and a lesser interest in land to the same piece of real property, the lesser interest merges into the greater interest and is thereby extinguished. While many practitioners apply this doctrine without pause, this author has seen many cases where it is truly inapplicable, it is adverse to the intention of the parties or otherwise creates an unjust result for a third party.

An attorney recently lamented to me that some of his clients seem to think all they have to do is yell "1031!" and that magic number will make their capital gains taxes disappear. The utilization of 1031 exchanges by owners of investment or business property has increased dramatically since the final regulations of April 1991¹ went into effect.

Just when we think we have everything figured out and we believe there is some predictability to our professional decisions and provide advice with which we feel comfortable, new court decisions come along that turn our world upside down. United States v. Craft, 535 U.S.   (2002) is one of those cases that "rocked" the real property bar, upsetting decades of teachings and understandings of the real property practitioner.

After weeks of protracted negotiations, you call your client and tell her that the lease for her business's new space is ready to sign. You have both spent many hours (and dollars) hammering out issues crucial to her business such as use provisions, remedies, maintenance obligations and renewal terms. You are confident that every danger has been diminished and every pitfall protected against.

Introduction

During a recent series of seminars for commercial loan officers, I discussed some of the fundamental coverage provided by the standard ALTA 1992 Loan Policy of Title Insurance. Throughout the seminars, lenders asked a number of questions pertaining to coverage for modifications, renewals and advances. Because of the frequency of these questions, I felt it might be helpful to provide a brief discussion of those issues again.

Like-kind Exchange Safe-harbor