The following Construction guidance note provides comprehensive and up to date legal information covering:
The facility agreement is the principal document in the suite of documents which is needed for the provision of finance for a development or construction project. It sets out the terms and conditions under which a lender is prepared to provide finance for the project. The agreement will contain provisions which relate to all aspects of the funding arrangement, not just the construction related provisions. Whilst the banking and finance lawyers will draft and negotiate the finance related clauses, the construction lawyers will be required to look at the construction provisions on behalf of either the lender or the borrower.
For more information on the general structure and layout of a facility agreement refer to Practice Note Structure of a facility agreement for construction projects.
In this Practice Note, the word borrower is used to describe the party who is borrowing the money. The borrower is usually a developer or employer. The word lender is used to describe the party lending the money (they may alternatively be referred to as the funder).
This Practice Note highlights the common construction clauses which are typically found in a facility agreement:
In order for the borrower to obtain the funding it requires, it must comply with the provisions of the facility agreement. A default by the borrower under the agreement could result in the
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