The following Property practice note provides comprehensive and up to date legal information covering:
The representations and warranties (representations) contained in a facility agreement (and/or legal mortgage) are statements of fact that the lender requires to be true in order to make the loan available to the borrower. The borrower makes the representations when the facility agreement is signed and is usually required to repeat the representations at key times throughout the life of the facility.
In real estate investment finance transactions, the lender will require representations concerning:
the legal status of the borrower
the commercial status of the borrower, and
For more information on legal and commercial representations see Practice Note: Representations and warranties.
In real estate development finance transactions, the lender will also require representations concerning the development of the property. See Practice Note: Real estate finance—representations and warranties in development facilities.
The representations are designed to:
limit the lender’s due diligence and place the risk of unknown issues on the borrower
obtain information from the borrower and enable the lender to make informed decisions. Before signing, if the borrower cannot make a particular representation or requires it to be qualified, the lender can decide whether to proceed. After signing, if the borrower cannot confirm that the representations remain true, the lender can impose a drawstop (ie the borrower cannot draw down)—see Repetition of representations below, and
to enable the lender to call an
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Coronavirus (COVID-19): The guidance detailing normal practice set out in this Practice Note may be affected by measures concerning process and procedure in the civil courts that have been introduced as a result of the coronavirus (COVID-19) pandemic. For guidance, see Practice Note: Coronavirus
A certificate of title (also known as a certificate on title) is a particular species of report on title.When solicitors are instructed to investigate title to land (for instance, when land is being acquired or offered up as security), they will write a report on title for their client, which sets
This Practice Note provides guidance on the SRA Codes of Conduct, contained in the SRA Standards and Regulations, in force from 25 November 2019. The SRA Standards and Regulations include two Codes of Conduct—a Code forSolicitors, RELs and RFLs and a Code for Firms. The Standards and Regulations
An intention to create legal relations is requiredThere are various situations in which a court will hold that an agreement is not binding because, though supported by consideration, it was made without any intention of creating legal relations (see, eg, Blue v Ashley).Did the parties intend to
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