Nareit Alert: Update for In-House Counsels

The European Union’s Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs) became effective on Jan. 1, 2018 and its U.K. implementation has caused some reported confusion regarding the status of U.S. exchange-listed equity REITs.

The PRIIPs regulation requires that “manufacturers” of PRIIPs—which include alternative investment funds (AIFs) under the EU AIFM Directive , shares in investment companies, derivatives, structured deposits and securities issued by certain special purpose vehicles (SPVs)—to make “available” to EU retail investors a standardized “key information document” (KID). Importantly for U.S. listed equity REITs, the PRIIPs regulation specifically states that “assets that are held directly by the retail investor, such as corporate shares or sovereign bonds,” are not PRIIPs. For this reason, Nareit, after conferring with U.K.-based legal counsel, believes that most U.S. stock-exchange listed equity REITs are not PRIIPs.

However, some Nareit members have reported—and the FT reported last week —that some U.K.-based investment platforms have been confused by the U.K. PRIIPs regulation, questioning whether U.S. listed equity REITs are covered and are required to submit KIDs. The confusion apparently arises because although EU REITs share a common tax structure, REITs in several EU member states, including the U.K., may be structured as either corporations or as alternative investment funds subject to the EU Alternative Investment Management Directive.

Based on our discussions with U.K. counsel and with colleagues at the British Property Federation and with the European Public Real Estate Association (EPRA), we are hopeful that as U.K. investment intermediaries gain more familiarity with the PRIIPsregime, the confusion regarding the status of U.S. equity REITs will recede.


On Feb. 15, 2017 the House of Representatives passed the Americans with Disabilities Act (ADA) Education and Reform Act of 2017 (H.R. 620) by a vote of 225-192. H.R. 620 would impose a 120-day “notice and cure” requirement on ADA suits, requiring plaintiffs to notify property owners about alleged violations and provide them an opportunity to cure prior to filing suit. Contrary to some press accounts , H.R. 620 is tailored and modest, leaving all other rights and remedies created by the ADA unchanged. The bill is intended to address an unintended consequence of the ADA: the surge of so-called “drive-by lawsuits” designed to force settlements with plaintiffs’ attorneys that often do little to increase ADA access. Nareit has worked over a two-year period with other commercial real estate groups including the International Council of Shopping Centers (ICSC), the Building Owners and Managers Association (BOMA) International, the National Multifamily Housing Council and many others in supporting this bill.


Please do not hesitate to contact Penny Rostow, SVP policy & regulatory affairs (vrostow@nareit.com; 202/739-9431) or Tony Edwards, EVP & general counsel, ( tedwards@nareit.com; 202/739-9408) with any related questions.