Real estate finance—conditions precedent and the mechanics of drawdown in investment facilities
Real estate finance—conditions precedent and the mechanics of drawdown in investment facilities

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Real estate finance—conditions precedent and the mechanics of drawdown in investment facilities
  • Timing of conditions precedent in a real estate finance transaction
  • Purpose of conditions precedent in real estate finance
  • Where to start with drafting conditions precedent in a real estate investment finance transaction
  • Specific conditions precedent for a real estate investment finance transaction
  • Certification of conditions precedent
  • Timing of conditions precedent in real estate investment finance transactions
  • Satisfaction of conditions precedent
  • Non-satisfaction of conditions precedent

Coronavirus (COVID-19): For information on what to do if an energy performance certificate is required as a condition precedent during the coronavirus outbreak, see Practice Note: Coronavirus (COVID-19)—implications for real estate finance transactions—Energy performance certificates.

Many of the usual conditions precedent (CPs) for a typical syndicated loan facility will also be applicable to a real estate finance transaction. For information on those conditions precedent, see Practice Note: Conditions precedent.

This Practice Note looks at the real estate finance specific conditions precedent which typically apply in an investment real estate finance transaction.

For development facilities, there are extra conditions precedent which need to be satisfied and different drawdown mechanics. These reflect the fact that the property being purchased will be developed over the term of the facilities, so is likely to increase in value and the plans for development will need to be approved by the lender before funding takes place. For more information, see Practice Note: Real estate finance—conditions precedent and the mechanics of drawdown in development facilities.

Timing of conditions precedent in a real estate finance transaction

Where the facility is required to fund the purchase of a single property, the facility will typically be advanced in a single drawdown and all of the conditions precedent will need to be satisfied before the facility is advanced.

Where the facility is required to fund the purchase of multiple properties, the

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