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Exhibit 8.1
[Letterhead of Hogan & Hartson L.L.P.]
July 17, 2000
Board of Directors
Charles E. Smith Residential Realty, Inc.
2345 Crystal Drive
Crystal City
Arlington, VA 22202
Ladies and Gentlemen:
We have acted as counsel to Charles E. Smith Residential
Realty, Inc., a Maryland corporation (the "Company"), in connection with the
registration statement on Form S-3 (the "Registration Statement") and the
prospectus included therein (the "Prospectus") filed by the Company with the
Securities and Exchange Commission relating to the possible offer and sale of up
to 504,543 shares of the Company's common stock, par value $.01 per share (the
"Shares"), by certain shareholders of the Company (the "Selling Stockholders")
to be offered for sale by the Selling Stockholders if and to the extent that
they elect to sell their Shares. In connection with the Registration Statement,
we have been asked to provide you with our opinion on certain federal income tax
matters. Capitalized terms used in this letter and not otherwise defined herein
have the meanings set forth in the Registration Statement.
BASES FOR OPINIONS
The opinions set forth in this letter are based on relevant
current provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Regulations thereunder (including proposed and temporary
Treasury Regulations), and interpretations of the foregoing as expressed in
court decisions, existing administrative rulings and practices of the Internal
Revenue Service (the "IRS") (including the private letter ruling issued by the
IRS to the Company on June 8, 1994, as supplemented by the ruling letter dated
June 16, 1995, and the private letter ruling issued by the IRS to the Company on
August 27, 1997), and legislative history, all as of the date hereof. These
provisions and interpretations are subject to changes, which may or may not be
retroactive in effect, that might result in material modifications of our
opinions.
In rendering the following opinions, we have examined such
statutes, regulations, records, certificates and other documents as we have
considered necessary or appropriate as a basis for such opinion, including the
following: (1) the Registration Statement; (2) the First Amended and Restated
Agreement of Limited Partnership of
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the Operating Partnership, as amended as of January 31, 1995, as certified by
the Secretary of the Company on the date hereof as being a true, correct and
complete copy and as being in full force and effect; (3) the Amended and
Restated Articles of Incorporation of the Company dated as of June 27, 1994, as
certified by the Department of Assessments and Taxation of the State of Maryland
on June 22, 2000, and by the Secretary of the Company on the date hereof as
being a true, correct and complete copy and as being in full force and effect;
(4) the agreements of limited partnership of the partnership subsidiaries of the
Operating Partnership; (5) the articles of organization and stock ownership
records of the four operating companies (Smith Realty Company, Smith Management
Construction, Inc., Combustioneer Corporation, and Consolidated Engineering
Services, Inc.) which provide property services to the properties owned by the
Operating Partnership and to other multifamily, retail, and office properties
(collectively, the "Property Service Businesses"); (6) the articles of
incorporation of the wholly-owned subsidiaries of the Company that serve as the
general partners of the various subsidiary financing partnerships (the "REIT
Subs"); and (7) other necessary documents. The opinions set forth in this letter
also are premised on certain written representations of the Company contained in
a letter to us dated as of the date hereof (the "Management Representation
Letter"). Any variation or difference in the facts from those set forth in the
documents that we have reviewed and upon which we have relied (including, in
particular, those set forth in the Management Representation Letter) may
adversely affect the conclusions stated herein.
We have made such factual and legal inquiries, including
examination of the documents set forth above, as we have deemed necessary or
appropriate for purposes of our opinion. For purposes of rendering our opinion,
however, we have not made an independent investigation or audit of the facts set
forth in the above referenced documents, including the Management Representation
Letter. We consequently have relied upon representations in the Management
Representation Letter that the information presented in such documents or
otherwise furnished to us accurately and completely describes all material facts
relevant to our opinion. We are not aware, however, of any material facts or
circumstances inconsistent with the representations we have relied upon as
described herein or other assumptions set forth herein.
Moreover, we have assumed that (i) the Company, the Operating
Partnership, each of the REIT Subs, each of the partnership subsidiaries, and
each of the Property Services Businesses have been and will continue to be
operated in the manner described in the relevant partnership agreement, articles
(or certificate) of incorporation, or other organizational documents; (ii) as
represented by the Company, there are no agreements or understandings between
the Company or the Operating
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Partnership, on the one hand, and the partnerships that own the voting stock of
the Property Services Businesses (the "Voting Stock Partnerships") or their
partners, on the other, that are inconsistent with the relevant Voting Stock
Partnership being considered to be both the record and beneficial owner of more
than 90% of the outstanding voting stock of the respective Property Services
Businesses; and (iii) the Company is a validly organized and duly incorporated
corporation under the laws of the State of Maryland, each of the Property
Services Businesses and each of the REIT Subs are validly organized and duly
incorporated corporations under the laws of the State of Delaware or the
Commonwealth of Virginia (as applicable), and the Operating Partnership and each
of the subsidiary partners are duly organized and validly existing partnerships
under the applicable laws of the State of Delaware.
In our review, we have assumed that all of the representations
and statements set forth in the documents that we reviewed (including the
Management Representation Letter) are true and correct, and all of the
obligations imposed by any such documents on the parties thereto, including
obligations imposed under the Articles of Incorporation of the Company, have
been and will continue to be performed or satisfied in accordance with their
terms. We also have assumed the genuineness of all signatures, the proper
execution of all documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of documents submitted to us as copies,
and the authenticity of the originals from which any copies were made.
OPINIONS
Based upon, subject to, and limited by the assumptions and
qualifications set forth herein, we are of the opinion as follows:
1. The Company was organized and has operated in conformity with the
requirements for qualification and taxation as a real estate investment
trust ("REIT") under the Code for its taxable years ending December 31,
1995, December 31, 1996, December 31, 1997, December 31, 1998, and
December 31, 1999, and the Company's current organization and method of
operation, as described in the Management Representation Letter, will
enable it to continue to meet the requirements for qualification and
taxation as a REIT.
2. The discussion in the Prospectus under the heading "Federal Income
Tax Considerations," to the extent that it describes provisions of
federal income tax law, is correct in all material respects.
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Our opinion letter is limited to the opinions described above.
We assume no obligation to advise you of any changes in our opinions subsequent
to the delivery of this opinion letter. The Company's qualification and taxation
as a REIT depend upon the Company's ability to meet on a continuing basis,
through actual annual operating and other results, the various requirements
under the Code with regard to, among other things, the sources of its gross
income, the composition of its assets, the level of its distributions to
stockholders, and the diversity of its stock ownership. Hogan & Hartson L.L.P.
has relied upon representations of the Company with respect to these matters and
will not review the Company's compliance with these requirements on a continuing
basis. Accordingly, no assurance can be given that the actual results of the
Company's operations, the sources of its income, the nature of its assets, the
level of its distributions to stockholders and the diversity of its stock
ownership for any given taxable year will satisfy the requirements under the
Code for qualification and taxation as a REIT.
An opinion of counsel merely represents counsel's best
judgment with respect to the probable outcome on the merits and is not binding
on the IRS or the courts. There can be no assurance that positions contrary to
our opinion will not be taken by the IRS, or that a court considering the issue
would not hold contrary to such opinion. Furthermore, no assurance can be given
that future legislative, judicial or administrative changes, on either a
prospective or retroactive basis, would not adversely affect the accuracy of the
opinion expressed herein. Nevertheless, we undertake no responsibility to advise
you of any such changes.
We hereby consent to the filing of this opinion letter as
Exhibit 8.1 to the Registration Statement and to the use of the name of the firm
therein. In giving the consent, we do not thereby admit that we are an "expert"
within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
Hogan & Hartson L.L.P.
