CS Professional · Strategic Management and Corporate Finance · Real Estate Investment Trusts
Which of the following is a correct feature of the unitholders' rights regarding related party transactions of a REIT?
Under the REIT Regulations, specified related party transactions need unitholder approval by the prescribed majority of votes cast, and related parties are not allowed to vote on them. Unitholders are therefore not excluded from such decisions, nor is the sponsor the sole approver.
- ARelated party transactions never require unitholder approval
- BCertain related party transactions require approval of unitholders by the prescribed majority, with related parties not votingCorrect
- COnly the sponsor can approve related party transactions
- DUnitholders have no right to receive information about such transactions
Explanation
The Regulations give unitholders a say on specified transactions with related parties, requiring approval by the prescribed majority of votes cast, and related parties do not vote on them. The other options deny unitholders participation or information, which is incorrect.
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