Deeds Of Priority

As a lender, securing your financial position is paramount, especially when multiple lenders are involved in funding a property development or commercial transaction. A key tool for protecting your interests is a Deed of Priority. This legal agreement is essential when more than one lender is offering finance, and it establishes the order in which creditors are repaid if the borrower defaults or if the property is sold.

At Blackstone Solicitors, we provide expert legal advice to lenders across England and Wales, ensuring that your rights and interests are safeguarded in complex financial arrangements.

Contact our secured lending and property finance solicitors today to find out more about how our specialists can help you and your company. Either call us on 0330 808 0839 or complete our online enquiry form and a member of the team will give you a call back.

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What is a Deed of Priority?

A Deed of Priority is a legal document used to establish the order of priority between lenders when a borrower has secured finance from multiple sources. It determines which lender is repaid first in the event of default, insolvency, or sale of the property.

In property finance, there can be multiple secured lenders—often referred to as the first charge holder and the second charge holder. The lender with the first charge has the primary right to be repaid from the sale proceeds of the property, while the second charge holder is only repaid once the first charge holder’s loan is satisfied. A Deed of Priority formalises this relationship, ensuring clarity and reducing the risk of disputes.

Why is a Deed of Priority Important?

In any scenario where a borrower seeks financing from multiple lenders, there is a risk that repayment conflicts could arise, particularly if the borrower defaults. Without a clear agreement in place, lenders could find themselves in protracted legal disputes over who is entitled to be repaid first.

A Deed of Priority is essential for protecting each lender’s interests by:

Establishing a clear repayment hierarchy: The Deed sets out the repayment order, ensuring that the primary lender (first charge holder) is repaid before any other creditors.
Reducing risk of disputes: Having a formalised agreement avoids disputes between lenders in the event of borrower insolvency or property sale.
Allowing for structured risk management: The first charge holder typically bears less risk and may offer better lending terms as a result. Conversely, second charge holders are more exposed to risk but may charge higher interest to compensate.

With regards to development finance, we can also advise upon:

Our Approach

We are 100% committed to ensuring each and every one of our clients receives the highest quality service and we will go the extra mile to ensure that you are happy with the results gained. We understand it can sometimes seem rather complicated to deal with matters relating to property finance this is why our friendly and approachable team always take a sympathetic and understanding approach, ensuring that you receive the support you need.

We believe communication is of the utmost importance. We will therefore keep you updated as things develop, and our solicitors will provide practical, straightforward legal advice so that you can be confident everything is progressing as you would like.

A Deed of Priority is typically required in situations where a borrower has secured finance from multiple lenders. Common scenarios include:

Property development finance: Where a property developer seeks funding from different lenders for different phases of the project or uses both senior debt (first charge) and mezzanine finance (second charge).
Refinancing transactions: When a borrower restructures their debt and brings in a new lender who requires a first charge position.
Bridging loans: Bridging finance often involves lenders taking a second charge, and a Deed of Priority is necessary to formalise the repayment hierarchy.

A Deed of Priority is a critical document for lenders involved in property finance where multiple secured parties are involved. It establishes a clear hierarchy of repayment, ensuring that the first charge holder’s loan is repaid before any subordinated lenders.

For lenders, understanding the structure, terms, and implications of a Deed of Priority is essential to managing risk and securing financial interests. At Blackstone Solicitors, we provide expert legal advice to lenders across England and Wales, ensuring that your Deed of Priority is clear, enforceable, and fully protects your interests.

If you need assistance with drafting or negotiating a Deed of Priority, contact Blackstone Solicitors today to discuss how we can support your lending arrangements.

Why Legal Help is Important

Secured lending and property finance involve complex legal and financial arrangements that require expert advice. At Blackstone Solicitors, we work closely with businesses and individuals across England and Wales to ensure that every aspect of the transaction is handled with precision. We can assist in negotiating terms, ensuring regulatory compliance, and mitigating risks, all while keeping your business’s best interests at heart.

With our in-depth knowledge and experience, we ensure that you are fully protected throughout the lending process, from initial negotiations to final completion. If you’re looking to secure finance for a real estate project or are a lender, get in touch with our team today to discuss how we can assist you in achieving your business goals.

Our Services

The specialist solicitors at Blackstone provide a range of services to help businesses with their finances. These include, but are not limited to, the following:

Get in Touch

For more information about our services and how our secured lending and property finance solicitors can help you with any aspect of your financial dealings, do not hesitate to get in touch. You can call us on 0330 808 0839 or allow us to call you back by completing our online enquiry form.

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