OPINION OF GOODWIN, PROCTER & HOAR LLP (TAX)
Published on August 7, 1998
Exhibit 8.1
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109-2881
(617) 570-1000
August 7, 1998
Avalon Bay Communities, Inc.
2900 Eisenhower Avenue, Suite 300
Alexandria, Virginia 22314
Re: Avalon Bay Communities, Inc.
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Ladies and Gentlemen:
This opinion is delivered to you in our capacity as special counsel to
Avalon Bay Communities, Inc. (the "Company") in connection with the
registration, pursuant to the Company's Registration Statement on Form S-3, as
amended, of up to $750,000,000 of an indeterminate amount of Debt Securities,
Preferred Stock and/or Common Stock. This opinion relates to the Company's
qualification for federal income tax purposes as a real estate investment trust
(a "REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), for
taxable years commencing with the Company's taxable year ended December 31,
1994. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Registration Statement.
We have relied upon the representations of officers of the Company
regarding the manner in which the Company has been and will continue to be owned
and operated and the continued accuracy of such representations through the date
of this letter. We assume that the Company has been and will be operated in
accordance with applicable laws and the terms and conditions of applicable
documents, and that the descriptions of the Company and its investments, and the
proposed investments, activities, operations, and governance of the Company set
forth in the Registration Statement continue to be true. In addition, we have
relied on certain additional facts and assumptions described below.
In rendering the following opinion, we have examined the Company's Articles
of Incorporation, as amended, the By-Laws, as amended, its federal income tax
returns for the taxable years ended December 31, 1994, December 31, 1995, and
December 31, 1996, each on Form 1120-REIT, and such other records, certificates
and documents as we have deemed necessary or appropriate for purposes of
rendering the opinion set forth herein.
In rendering the opinion set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to
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us as originals, (iii) the conformity to the original documents of all documents
submitted to us as copies, (iv) the conformity of final documents to all
documents submitted to us as drafts, (v) the authority and capacity of the
individual or individuals who executed any such documents on behalf of any
person, (vi) the accuracy and completeness of all records made available to us,
and (vii) the factual accuracy of all representations, warranties, and other
statements made by all parties. We have also assumed, without investigation,
that all documents, certificates, representations, warranties, and covenants on
which we have relied in rendering the opinion set forth below and that were
given or dated earlier than the date of this letter continue to remain accurate,
insofar as relevant to the opinion set forth herein, from such earlier date
through and including the date of this letter.
The opinion set forth below is based upon the Code, the Income Tax
Regulations and Procedure and Administration Regulations promulgated thereunder
and existing administrative and judicial interpretations thereof, all as they
exist at the date of this letter. All of the foregoing statutes, regulations,
and interpretations are subject to change, in some circumstances with
retroactive effect; any changes to the foregoing authorities might result in
modification of our opinion contained herein.
Based upon and subject to the foregoing, and provided that the Company
continues to meet the applicable asset composition, source of income,
shareholder diversification, distribution and other requirements of the Code
necessary for a corporation to qualify as a REIT, we are of the opinion that
commencing with the taxable year ending December 31, 1994, the form of
organization of the Company and its operations are such as to enable the Company
to qualify as a "real estate investment trust" under the applicable provisions
of the Code.
We express no opinions other than those expressly set forth herein.
Furthermore, the Company's qualification as a REIT will depend on the Company
meeting, in its actual operations, the applicable asset composition, source of
income, shareholder diversification, distribution, record keeping and other
requirements of the Code necessary for a corporation to qualify as a REIT. We
will not review these operations, and no assurance can be given that the actual
operations of the Company and its affiliates will meet these requirements or the
representations made to us with respect thereto. Our opinion is not binding on
the Internal Revenue Service (the "IRS"), and the IRS may disagree with the
opinion contained herein. Except as specifically discussed above, the opinion
expressed herein is based upon the law as it currently exists. Consequently,
future changes in the law may cause the federal income tax treatment of the
transactions described herein to be materially and adversely different from that
described above. Our opinion may be relied on solely by you in connection with
the
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Page 3
registration of the Debt Securities, Preferred Stock and/or Common Stock and
by a subsequent purchaser in connection with a sale by you of the Debt
Securities, Preferred Stock and/or Common Stock to such subsequent purchaser.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
Goodwin, Procter & Hoar LLP