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Funding For Developments
There are various legal factors that have to be considered when it comes to funding a development. It is therefore advisable to make sure you have an experienced law firm on your side to ensure you are covered in every area. At Blackstone Solicitors, we are able to advise many different types of client, no matter the complexity of the circumstances surrounding their funding requirements.
For more information about how our team of commercial property solicitors can help you with the legal aspects of development finance, contact us on 0345 901 0445 or complete our online enquiry form and a member of the team will call you back at a convenient time.
How we can help
Development finance occurs when a developer borrows money from a lender (or lenders) to finance the acquisition of land and the subsequent property development. After the building is completed, the property will be sold or used as an income source for investment purposes.
The money borrowed is secured over the property and the rights of the developer.
We are here to help with all the legal aspects of development funding. Be it a single local plot or a site on a much larger scale, we will work with you to make sure everything goes to plan.
Friendly yet direct, our team is passionate about every case we take on, and we believe the entire process requires constant communication. We will therefore guide you through the technicalities involved, offering expert advice from start to finish.
Why legal help is important
Development finance normally requires greater security than in standard property investment. This is because the value of the undeveloped land is likely to be less than the cost of funding the development.
The different forms of security required can include guarantees, collateral warranties, insurance policies, plant and machinery, a charge over bank deposits, contractual rights and a debenture.
Different sizes of developments have different requirements for funding. Large projects will often require ground-up development finance that covers all costs involved with the purchase and construction. Finance will be taken over an extended period, in staged payments, until the completion of the project. Property development finance will likely be 70-80% of the building cost. The balance of the cost will normally be met through subordinated loans and or equity.
Funding may be sourced from either a single lender or from a number of sources and the borrower will more often than not set up a special purpose vehicle (spv) with the sole role of undertaking the development with the loan being secured over assets or income of the SPV. The finance documents may also allow a lender to step-in to manage the affairs of the borrower.
These rights can give the lender the benefit of the developer’s rights as the employer of a building contractor or a professional consultant. A developer may also have step-in rights to take over the benefit of the rights of its subcontractors.
Our team prides itself on being able to meet every need of each of our clients. We are willing to go the extra mile when other firms are not, ensuring our clients are given the very best opportunity of getting the outcome they are after. Get in touch to see how our specialist team can help you today.
Speaking to one of our solicitors is easy, simply call us on 0345 901 0445 or allow us to get in touch with you by filling in our online enquiry form. Our services are available to people throughout the UK, including Manchester, London, Cheshire and Chester, as well as to people living abroad.