USA – LOUISIANA Law and Practice Contributed by: Jeffrey P. Good, Susan M. Tyler, B. Trevor Wilson and Parker Hufft, Jones Walker LLP
Tax increment financing and community development districts may also provide tax-exempt or tax-reduced financing vehicles. 3.2 Typical Security Created by Commercial Investors Typical Security Interests Commercial real estate acquisitions are collateralised by security instruments that effect a mortgage, lien or security interest on the real estate, such as build - ings and improvements, together with other collateral associated with the transaction, including, without lim - itation, pledges of leases and rents, security interests in tangible and intangible personal property, collateral assignments of insurance proceeds and contracts – ie, construction contracts and other security interests, including reserve accounts. Unlimited or limited per - sonal guaranties may be required, depending on the structure of the transaction. Deeds of trust are not recognised in Louisiana. Forms of mortgage Although three forms of mortgage are recognised in Louisiana, the primary form is the multiple indebt - edness mortgage, which was created by statute in 1991 and may secure existing obligations, obliga - tions contemporaneously incurred with the execution of the mortgage and specific, general or indefinite future obligations, provided the mortgage expressly and specifically sets forth the maximum amount of indebtedness it is intended to secure. The mortgage is effective upon execution; for third parties, it is effec - tive from the date it is filed for registry in the proper records of the appropriate jurisdiction. Recordation of a mortgage is effective for a period of ten years from the date of recordation, unless the mortgage describes a note with a payment maturity of nine years or more, in which case the inscription will remain effective for six years following the note’s stated maturity date. Reinscription To continue the effect of recordation beyond ten years, it is necessary to reinscribe the mortgage by filing a written notice of reinscription including the name of the mortgagor and the recordation informa - tion from the original mortgage, stating that the mort - gage is reinscribed. The effect of reinscription lasts
for ten years from the date the notice of reinscription is recorded. 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders Louisiana does not impose any regulations or restric - tions on a foreign lender’s ability to make loans or accept mortgages or other security interests in Loui - siana, subject to the caveat that foreign lenders may be subject to other federal laws and regulations. Loui - siana Revised Statutes Section 12:302 provides that a foreign corporation shall not be considered to be transacting business in Louisiana, for the purpose of being required to procure a certificate of authority pur - suant to Louisiana Revised Statutes Section 12:301, to the extent that it engages in certain activities, which • creating evidences of debt, mortgages or liens; • securing or collecting debts or enforcing any rights in property securing the same; • conducting an isolated transaction completed within a period of 30 days, and not in the course of repeated transactions of like nature; or include but are not limited to: • maintaining bank accounts; • acquiring and disposing of property or a property interest, not as a part of any regular business activ - ity. The statute also provides that, if the foreign corpora - tion is a bank, REIT or insurance company, the entity may, among other things, acquire or make loans, including renewals, modifications and extensions of such loans, acquire property at a foreclosure sale or by deed in lieu of foreclosure and manage, lease, operate and sell such property. Foreign lenders should be aware of certain federal compliance requirements that may apply, including the Bank Secrecy Act, anti-money laundering regu - lations and Office of Foreign Assets Control (OFAC) restrictions. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Other than modest recordation and filing fees for the sale documents and security instruments, which are based on the type of document and the number of
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