EXHIBIT 5.1
[LETTERHEAD OF VENABLE LLP]
February 17, 2004
Affordable Residential Communities Inc.
Suite 900
600 Grant Street
Denver, Colorado 80203
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have served as Maryland counsel to Affordable Residential Communities
Inc., a Maryland corporation (the "Company"), in connection with certain matters
of Maryland law arising out of the registration of up to 1,992,387 shares (the
"Shares") of the Company's Common Stock, par value $.01 per share (the "Common
Stock"), issuable upon the grant of restricted stock awards or upon the exercise
of options granted under the Company's 2003 Equity Incentive Plan (the "Plan").
The Shares are covered by the above-referenced Registration Statement, and all
amendments thereto (collectively, the "Registration Statement"), filed by the
Company with the United States Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "1933 Act").
Capitalized terms used but not defined herein shall have the meanings given to
them in the Registration Statement.
In connection with our representation of the Company, and as a basis for
the opinion hereinafter set forth, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents (hereinafter collectively referred to as the "Documents"):
1. The Registration Statement and the related form of prospectus included
therein in the form in which it was transmitted to the Commission under the 1933
Act;
2. The charter of the Company (the "Charter"), certified as of a recent
date by the State Department of Assessments and Taxation of Maryland (the
"SDAT");
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February 17, 2004
Page 2
3. The Bylaws of the Company, certified as of the date hereof by an
officer of the Company;
4. A certificate of the SDAT as to the good standing of the Company,
dated as of a recent date;
5. Resolutions adopted by the Board of Directors of the Company relating
to, among other matters, the adoption of the Plan and the registration and
issuance of the Shares (the "Resolutions"), certified as of the date hereof by
an officer of the Company;
6. The Notice of Special Meeting of Stockholders, dated January 2, 2004
(the "Notice"), mailed to stockholders of record of the Company entitled to vote
on the matters described therein, certified as of the date hereof by an officer
of the Company;
7. The Plan, certified as of the date hereof by an officer of the Company;
8. A certificate executed by an officer of the Company, dated as of the
date hereof; and
9. Such other documents and matters as we have deemed necessary or
appropriate to express the opinion set forth below, subject to the assumptions,
limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of
such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party
(other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the
Documents has duly and validly executed and delivered each of the Documents to
which such party is a signatory, and such party's obligations set forth therein
are legal, valid and binding and are enforceable in accordance with all stated
terms.
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February 17, 2004
Page 3
4. All Documents submitted to us as originals are authentic. The form and
content of all Documents submitted to us as unexecuted drafts do not differ in
any respect relevant to this opinion from the form and content of such Documents
as executed and delivered. All Documents submitted to us as certified or
photostatic copies conform to the original documents. All signatures on all
Documents are genuine. All public records reviewed or relied upon by us or on
our behalf are true and complete. All representations, warranties, statements
and information contained in the Documents are true and complete. There has been
no oral or written modification of or amendment to any of the Documents, and
there has been no waiver of any provision of any of the Documents, by action or
omission of the parties or otherwise.
5. The Shares will not be issued in violation of any restriction or
limitation contained in the Charter or the Plan.
6. Each option, restricted stock unit, right or other security exercisable
or exchangeable for a Share will be duly authorized and validly granted in
accordance with the Plan and exercised or exchanged in accordance with the terms
of the Plan, including any option agreement entered into in connection
therewith, at the time of any exercise of such option, restricted stock unit,
right or other security.
Based upon the foregoing, and subject to the assumptions, limitations and
qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under and
by virtue of the laws of the State of Maryland and is in good standing with the
SDAT.
2. The issuance of the Shares has been duly authorized and, when and to
the extent issued in accordance with the Charter, the Registration Statement,
the Resolutions. the Notice and the Plan, the Shares will be (assuming that,
upon issuance, the total number of shares of Common Stock issued and outstanding
will not exceed the total number of shares of Common Stock that the Company is
then authorized to issue under the Charter) validly issued, fully paid and
non-assessable.
The foregoing opinion is limited to the substantive laws of the State of
Maryland and we do not express any opinion herein concerning any other law. We
express no opinion as to compliance with any federal or state securities laws,
including the securities laws of the State of Maryland, or as to federal or
state laws regarding fraudulent transfers. To the extent that any
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February 17, 2004
Page 4
matter as to which our opinion is expressed herein would be governed by any
jurisdiction other than the State of Maryland, we do not express any opinion on
such matter.
The opinion expressed herein is limited to the matters specifically set
forth herein and no other opinion shall be inferred beyond the matters expressly
stated. We assume no obligation to supplement this opinion if any applicable law
changes after the date hereof or if we become aware of any fact that might
change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission as
an exhibit to the Registration Statement. We hereby consent to the filing of
this opinion as an exhibit to the Registration Statement and to the use of the
name of our firm therein. In giving this consent, we do not admit that we are
within the category of persons whose consent is required by Section 7 of the
1933 Act.
Very truly yours,
/s/ Venable LLP