The following Property guidance note provides comprehensive and up to date legal information covering:
In finance transactions, conditions precedent (CPs) are the conditions which the borrower must satisfy:
(usually) before the borrower is entitled to serve a utilisation (drawdown) request, and
before the lender is obliged to make the funds available to the borrower
The CPs are contained in the facility agreement. The facility agreement usually provides that each CP must be 'in a form and substance satisfactory to the lender'.
The purpose of he usual property specific CPs in a real estate investment finance transaction is to satisfy the lender that:
the lender will obtain a first legal charge over the property, and
the property will be acceptable security for the loan
The lender will require property due diligence to be undertaken to check that the borrower will obtain a good and marketable title to the property and that it will constitute good security for the lender.
At the outset of the transaction, the lender (on the advice of its solicitors) should decide:
who should carry out the due diligence (ie the lender’s solicitors or the borrower’s solicitors), and
where the due diligence will be carried out by the borrower’s solicitors, whether the lender requires a certificate of title or whether the lender will
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