Higgs’ construction and engineering team, led by Rachael Hobbis advised a high street lender on a property development lending to a borrower operating in the life sciences field.
The borrower purchased land, subject to satisfactory planning permission being gained, pursuant to a conditional sale agreement, with subsequent obligations on the developer under a development agreement to build a bespoke warehouse and offices on a commercial estate.
The lender was providing development funding to the borrower in respect of the construction of the project following successful completion of the property purchase.
Accordingly the lender required confirmation that its interests and security would be protected in the event of default by the borrower under the facility agreement.
The construction and engineering team worked alongside the wider commercial property team, to advise the lender on the full suite of construction documents and the transactional documents (in particular the development agreement).
The lender naturally was not a party to the development agreement, but the team was instructed to advise on the lender’s position under the same in the event that the lender had to exercise any step in right (under the construction documents) or re-possession of the property after acquisition.
The team reviewed and negotiated the development agreement to ensure the terms were suitable and provided adequate protection for the lender in such event, negotiating various lender rights in the development agreement in respect of the construction documents, insurance and step in rights.
The team also undertook a review of, negotiated and agreed a comprehensive suite of warranties in favour of the lender from the consultants, contractor and supply chain as well as obtaining evidence of the completed underlying contracts and insurances.
