19. The endorsement panel of the Note referred to “Deed of Trust [Mortgage] Note” whereas the title of the document is “Healthcare Facility Note [Multistate].” The endorsement panel should be corrected to use the title of the document. (1/14/14)
The second sets of brackets, around the words “attached hereto as Exhibit C-1”were included in error. This scrivener's error has been corrected by replacing the brackets with parentheses.
- In the last 3 lines of Section 1.1, FHA Lender should be capitalized; FHA Loan Documents should be changed to HUD Loan Documents; and FHA Loan should be changed HUD Loan.
- In Section 1.8, references to Bank should be changed to AR Lender.
- In the 5th line of Section 1.9, FHA Triggering Event should be changed to HUD Triggering Event.
- In Section 1.26, clauses (v) and (vi) should be (i) and (ii).
- In the last line of Section 2.6(b), the word Time should be removed.
We agree. The scrivener's errors have been corrected, and the corrected document will be posted soon.
agree. The scrivener's error has been corrected by rearranging the text to make it more clear, and the corrected document will be posted soon.
To correct these scrivener’s errors, we capitalized the word “Sublease” in the second line of Section 6, and in Section 14, we changed “Licenses” to use lower case letters. A corrected document will be posted soon.
We have removed the brackets surrounding the defined term “AR Financing Documents.” By including this defined term in all instances, we allow for HUD-approved AR financing to be added post-closing without the need to amend and re-record this Regulatory Agreement. A corrected document will be posted soon.
To correct this scrivener’s error, we added bracketed instructional language to paragraph 11 indicating that this paragraph is to be used only if the Master Tenant is a party to AR Financing. A corrected document will be posted soon.
To correct these scrivener’s errors, we added a definition for the term Borrower to account for instances in which the Lessor is the master tenant rather than the borrower. We added bracketed language where the parties may need to change Lessor to Borrower. These changes are in the defined terms Borrower’s Regulatory Agreement and Borrower’s Security Instrument, and in Sections 2(c), 5(a), 11(b), 21.
We also removed the definition of Licenses and in Section 20, we changed licenses to no longer be capitalized.
We agree. The scrivener's error has been corrected, and the corrected document will be posted soon.
16. If the owner operates the project, do we still need to have the HUD-required language for operator organizational documents in the owner's organizational documents? Do we need to collect the documents twice? (12/13/13)
To the extent the HUD-required language for the operator’s organizational documents adds to the language required for the borrower’s organizational documents, the added language must be included in an owner-operator’s organizational documents. There is no need for the HUD closing attorney to include two copies of the owner-operator’s organizational documents in a closing docket, so long as the docket clearly indicates that the documents collected constitute both the owner’s and the operator’s organizational documents.
17. In the first paragraph of the Master Lease SNDA (HUD-92333-ORCF), the word "as" should be added before the word "borrowers" in the second line. (12/13/13)
We agree. This scrivener's error has been corrected, and the corrected document will be posted soon.
18. The list of defined terms in Attachment 1 may be reorganized to be in alphabetical order. (1/14/14)
A corrected document will be posted soon.
19. The endorsement panel of the Note referred to “Deed of Trust [Mortgage] Note” whereas the title of the document is “Healthcare Facility Note [Multistate].” The endorsement panel should be corrected to use the title of the document. (1/14/14)
A corrected document will be posted soon.
20. On the second page of the Operator's Regulatory Agreement, before the Definitions begin, the line that says: "Covenants. Borrower and HUD covenant and agree as follows:" should be corrected to say:
"Covenants. Operator and HUD covenant and agree as follows:". (1/14/14)
A corrected document will be posted soon. Until corrected documents are posted, please correct all scrivener's errors "manually."
21. Scrivener's Error in Master Tenant's Attorney's Opinion Corrected (4/22/14)
Assumption JJ of the Master Tenant's Attorney's Opinion includes a statement that the Master Tenant has rights to the Project's accounts subject to the Control Agreement. This is not always the case, and the term "Control Agreement" is only defined when applicable. Therefore, we've bracketed the assumption that the Master Tenant has rights to the Project's accounts. This language should only be used when the Master Tenant is named on the DACA.
JJ. Master Tenant has rights in the Master Tenant’s Collateral or the power to transfer rights in the Master Tenant’s Collateral to a secured party[, including rights to the Project’s accounts and deposit accounts for accounts receivables subject to the Control Agreement].
The next iteration of the punchlist will include this instruction, and the form will be updated. Until the updated form is posted, please make this change "manually."
22. Scrivener's Errors in Lender's Certification Corrected (4/22/14)
The entity executing this Lender’s Certificate (this “Certificate”) is __________, a __________ organized and existing under the laws of __________, (“Lender”) (also referred to as a mortgagee in Program Obligations) under that certain Borrower’s Security Instrument, ___________________ (also referred to as a mortgage in Program Obligations) dated __________, 20__, executed by Lender and __________, a __________ organized and existing under the laws of __________ (“Borrower”) (also referred to as a mortgagor in Program Obligations), securing the Note evidencing the Loan by Lender to Borrower in the principal sum of $__________ that Lender has agreed to make on condition that it be insured by HUD pursuant to the Contract of Insurance comprised of Section 232 of the National Housing Act, as amended, and its implementing regulations.
Correcting “exiting” to “existing” and remove the words “Lender and” because the Lender does not execute the Security Instrument.
Until the form has been corrected, please make these changes "manually."
23. Scrivener's Errors in Security Instrument and Note Corrected (4/22/14)
The Department is making the following corrections to the Note and Security Instrument provisions governing Acceleration:
In Section 6 of the Note, in the first sentence, insert “for a period of thirty (30) days” immediately after “continuing”.
In Section 43 of the Security Instrument, in the first sentence, insert “for a period of thirty (30) days” immediately after “continuing.”
The revised Security Instrument will be posted to HUDclips. The revised Note has already been posted to HUDclips.
Security Instrument:
43. ACCELERATION; REMEDIES. If a Monetary Event of Default occurs and is continuing for a period of thirty (30) days, Lender, at Lender's option, may declare the Indebtedness to be immediately due and payable without further demand, and may invoke the power of sale and any other remedies permitted by applicable law or provided in this Security Instrument or in the Note. Following a Covenant Event of Default, Lender, at Lender's option, but so long as the Loan is insured or held by HUD, only after receipt of the prior written approval of HUD, may declare the Indebtedness to be immediately due and payable without further demand, and may invoke the power of sale and any other remedies permitted by applicable law or provided in this Security Instrument or in the Note. Borrower acknowledges that the power of sale granted in this Security Instrument may be exercised by Lender without prior judicial hearing. Lender shall be entitled to collect all costs and expenses incurred in pursuing such remedies, including reasonable attorneys' fees (including but not limited to appellate litigation), costs of documentary evidence, abstracts and title reports.
24. Scrivener's Error in the Operator Security Agreement Corrected. (6/19/14)
In Section 24(a) of the operator’s security agreement, may “and secured party” be added after “additional lender” at the end of the first line. HUD obviously wants to be an additional secured party on the financing statements.
25. Is there a scrivener's error in Section 26(e) of the Healthcare Regulatory Agreement - Borrower? (6/19/14)
This is not a scrivener’s error. The sentence reads: “Without prior approval of HUD, [the Operator Lease shall not, and may not be amended to] OR [neither the Operator Lease nor the Master Lease shall or shall be amended to] contain any provisions that cause such lease to be characterized as…” This means that neither lease shall contain, and neither shall either lease be amended to contain… The language is intended to address both the present and future state.
26. In the Guide to Opinion of Operator’s Counsel (HUD-92325-ORCF), document H (Cross-Default Guaranty of Subtenants) is defined as both an Operator HUD Document and a Supporting Document, though it appears these categories are meant to be mutually exclusive. (8/20/14)
We agree. In order to correct this scrivener’s error, in the paragraph following the list of documents reviewed, we removed the sentence that said, “The documents listed in H through Q above are referred to collectively as the ‘Supporting Documents’.” The term “Supporting Documents” was not used in the document, and document H was also considered an “Operator HUD Document,” though the list of Operator HUD Documents was meant to be exclusive of Supporting Documents. A corrected document will be posted soon.
27. The Borrower's Regulatory Agreement contains the following language in paragraph 25: "Unless otherwise requested by HUD, the reporting requirements of this provision shall not encompass regulators’ communications relating solely to Licensed Nursing Facility surveys where the most severe citation level is at the “G” level or its equivalent (pursuant to CMS State Operations Manual, Chapter 7, as may hereafter be edited or updated, or any successor guidance) . . . .” The term “Licensed Nursing Facility survey” is not defined in the Operator’s Regulatory Agreement, the Security Instrument, or the CMS State Operations Manual Chapter 7 from CMS’ website. Can you please tell me where this term is defined? (9/3/14)
HUD unintentionally capitalized “Licensed Nursing Facility survey” when drafting paragraph 25 of the Borrower’s Regulatory Agreement. The term should be “licensed nursing facility survey”, meaning any survey made pursuant to the CMS Manual. A corrected document will be posted soon; in the meantime, please make the change manually. This change impacts HUD-92466-ORCF, with revision dates of 3/13 and 6/2014.
28. Section 23 of the Healthcare Regulatory Agreement - Borrower (rev. 06/2014) includes the line: "Consistent with Program Obligations, to the extent that Borrower obtain, or cause to be obtained, contracts for goods, materials, supplies, and services ("Goods and Services") at costs, amounts, and terms that do not exceed reasonable and necessary levels and those customarily paid in the vicinity of the Land for Goods and Services received." This does not appear to be a complete sentence. (9/3/14)
We agree. That sentence should be modified as follows: "Consistent with Program Obligations, to the extent that Borrower obtains, or causes to be obtained, contracts for goods, materials, supplies, and services ("Goods and Services"), it shall do so at costs, amounts, and terms that do not exceed reasonable and necessary levels and those customarily paid in the vicinity of the Land for Goods and Services received." This change affects HUD-92466-ORCF with a revision date of 06/2014. Until the form is updated, please ensure this change is made for each transaction.
29. The Escrow Agreement for Non-critical, Deferred Repairs HUD-92476-ORCF (6/2014) states, "Subject to Paragraph 7 of this Agreement, provided that an Event of Default does not then exist". Should it instead say, "Subject to Paragraph 8..."? (11/7/14)
Yes, the reference in paragraph 7 should be to paragraph 8. We will have the form corrected shortly. In the meantime, please be sure to correct this reference on your deals. This change affects the Escrow Agreement for Non-Critical Deferred Repairs (HUD-92476-ORCF) with a version date of 06/2014.
30. In the final paragraphs of the Borrower’s Counsel Opinion Letter (HUD-91275-ORCF), wherein the attorney makes certain confirmations, paragraph (c) states that the attorney does not have any interest in the Project, etc. The language specifically states, twice, that the attorney does not have any interest in the “Property” (capital “P”). The term “Property” is not defined in the document; however, “Land” is a defined term for the real property. Should the language here be “Land”? (3/31/15)
No, the term “Property” should not be changed to “Land” in paragraph (c) on page 11 of the Opinion of Borrower’s Counsel. As noted in the question, attorneys state in paragraph (c) that they have no financial interest in “the Project, the Property, or the Loan.” The definition of “Project” in the first paragraph of the Opinion specifically includes “Land”; thus, changing “Property” to “Land” would be redundant.
In reviewing your question, the Committee determined that the inclusion of the undefined term “Property” in paragraph (c) was a scrivener’s error. Until the form is updated, please delete both references to “Property” in paragraph (c). Thank you for bringing this matter to our attention.
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