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Must Lenders Negotiate Post-Borrower CRE Default?

With rising interest rates, the economic slowdown, and an uptick in distressed real estate, commercial borrowers and lenders are increasingly finding themselves staring down default. When loans turn problematic, workout agreements provide an opportunity for lenders and borrowers to attempt mitigation for an oncoming default and, ideally, reach an equitable arrangement for both sides.

But what if negotiations go sideways? Must lenders continue to negotiate and come to an agreement with a borrower in default?

Read more from attorneys Andrew Baldizon, Chuck Jacob, and A.J. Swartwood in CityBiz.

As problem loans arise, and lenders and borrowers look to devise solutions to oncoming default, remember that courts are generally loath to manufacture rights or duties outside of the bounds of a contract, including requirements on lenders to negotiate.


real estate, article, tax, real estate litigation, commercial real estate workouts