As we originally reported in our September 2018 Otten Johnson Alert, the London Interbank Offered Rate (“LIBOR”), once the primary benchmark used for floating rate commercial loans, is nearing its end.  As of December 31, 2021 lenders stopped using LIBOR as a benchmark rate for new loans and one week and two month USD LIBOR rates were discontinued.  All remaining USD LIBOR rates will be discontinued on June 30, 2023.

As LIBOR approaches its ultimate end in a little less than a year, what happens to all the legacy contracts that do not address the end of LIBOR and provide fallback provisions for a replacement rate?  To provide a solution for those contracts, Congress passed the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”).

The primary purpose of the LIBOR Act is to “establish a clear and uniform process, on a nationwide basis, for replacing LIBOR in existing contracts…which do not provide for the use of a clearly defined or practicable replacement benchmark rate.”  It applies to contracts that contain no fallback provisions or that contain fallback provisions that do not identify a specific benchmark replacement rate nor a person with the authority to determine a replacement rate.  Under the LIBOR Act, a benchmark replacement recommended by the Board of Governors of the Federal Reserve System (the “Board”) will automatically replace LIBOR in such contracts after June 30, 2023.  The Board-selected benchmark replacement will be based on the Secured Overnight Financing Rate published by the Federal Reserve Bank of New York and will include recommended spread adjustments and benchmark replacement conforming changes.  The LIBOR Act expressly supersedes any provision of state or local law relating to the selection of a benchmark replacement for LIBOR.

The LIBOR Act seeks to prevent issues created in legacy contracts that do not adequately provide for a replacement rate, not to mandate a particular benchmark replacement.  Thus, the LIBOR Act does not apply in any of the following situations:  (1) contracts that expressly state they are not subject to the LIBOR Act; (2) contracts that contain fallback provisions that identify a benchmark replacement (other than a LIBOR based value); (3) contracts where the person with the authority to determine a replacement rate does not select the Board-selected benchmark replacement rate so long as they make a selection by the earlier of the LIBOR replacement date and the latest date allowed by the terms of the contract; (4) any application of a cap, floor, modifier, or spread adjustment to the Board-selected benchmark replacement that LIBOR was subjected to pursuant to the terms of a contract; (5) any Federal consumer financial law that requires creditors to notify borrowers regarding changes in terms or that govern the reevaluation of rate increases on certain credit card accounts; or (6) the rights or obligations of any person or agency under Federal consumer financial law.

Importantly, the LIBOR Act also strives to prevent litigation related to replacing LIBOR as a benchmark rate and provides protection for lenders and other persons that may determine the benchmark replacement.  Under the LIBOR Act, a Board-selected benchmark replacement, and its selection or use, constitutes (1) a commercially reasonable and substantially equivalent replacement for LIBOR; (2) a reasonable, comparable or analogous rate for LIBOR; (3) a replacement based on a similar or comparable methodology to LIBOR; (4) substantial performance by any person of any right or obligation relating to or based on LIBOR; and (5) a replacement rate with substantially similar historical fluctuations to LIBOR for purposes of the Truth in Lending Act.

Additionally, the LIBOR Act includes “safe harbor” provisions to protect any person from liability for (i) the selection or use of a Board-selected benchmark replacement; (ii) the implementation of benchmark conforming changes; or (iii) for non‑consumer loans, the determination of benchmark replacement conforming changes.

The Board must promulgate regulations to carry out the LIBOR Act by September 11, 2022.

This post was co-authored by Rachel DeSimone.  Rachel is a summer clerk at Otten Johnson, and a rising 3L at the University of Denver Sturm College of Law.

On Tuesday, April 26, 2022, the Aspen City Council (the “Council”) voted to extend its residential moratorium on (i) any new land-use applications for development approval and (ii) certain building permits for residential uses. The original Ordinance #27 was enacted on December 8, 2021 and was originally set to expire on June 8, 2022, but instead will now continue until Aug. 8, 2022 (pending final approval during a special meeting scheduled for May 3, 2022). As was reported in our February 2022 Otten Johnson Alert, the Council originally cited increasing real estate prices and environmental concerns among their motivations for the moratorium.


As a follow up to my December 2021 blog post about the future of 3D printed homes, The Washington Post recently wrote a great article about a newly constructed 3D printed house in Williamsburg, Virginia built by a partnership between Habitat for Humanity and Alquist. The home benefited a family through one of Habitat for Humanity’s programs.

What I love most about this article are the photos, which show the 3D printer in action and the interior of the home. The interior of the home was built using “classic” construction methods and products, and is a great example of how we can combine current 3D printing technology with “classic” building methods to build a more affordable house in a shorter period of time.

3D printers are already being used across industries to produce a number of products. A quick Google search provides an astonishing number of uses.  One industry to keep an eye on is the housing industry and the use of 3D printers to build houses on-site. Continue Reading 3D Printed Houses: The Potential for Positive Change in the Housing Industry

Short-term home rentals (“STRs”) are big business in the Colorado front range, both in places where they are currently allowed and those where they are not. In many cities, people are renting their residences on apps like VRBO and Airbnb, even when prohibited by the zoning code. One such city, Lakewood, Colorado, is attempting to deal with this issue head on by adopting ordinances to directly regulate STRs. However, Lakewood’s proposed ordinances have a stricter bite than the regulatory schemes of other cities in the area such as Denver. Continue Reading Short-Term Rentals on the Horizon for Lakewood