Real Estate Investment Trusts (REITs) that invest in hotels frequently require, in any management agreement with a hotel management company that operates a hotel, some opportunity to participate in negotiations with any union that represents the management company’s employees at the hotel. This year, two U.S. Senators and the U.S. Internal Revenue Service made a coordinated effort to challenge this practice. In this article, I discuss this challenge and the underlying sections of the Internal Revenue Code governing REITs that hold “qualifying lodging facilities.”
–Bob Lannan