Many of the usual representations and warranties for a typical syndicated loan facility will also be applicable to a real estate finance transaction. For information on those representations and warranties, including what representations and warranties are and why they are used, see Practice Note: Representations and warranties. This Practice Note looks at the specific representations and warranties which typically apply in a real estate finance transaction, including representations and warranties relating to the title to the property, compliance with planning and environmental legislation, security over the property, the use and condition of the property, the accuracy of reports relating to the property and, in development finance transactions, representations and warranties relating to the development itself and the development documents (including the building contract). Purpose of representations and warranties Representations and warranties (representations) in a loan agreement are made up of a series of factual statements concerning the position of the borrower and its obligations under the finance documentation (see Practice Note: Representations and warranties—Legal representations) together with representations that relate to the assets of the borrower

Collateral warranties are a key part of the package of development documents in real estate development facilities. They are typically provided by the development team (eg the building contractor, architect, engineers and other consultants, and key sub-contractors to the building contractor) to the borrower and/or the lender. The lender will typically take security over the borrower's rights under the key development contracts including the collateral warranties that have been granted to the borrower (in addition to receiving collateral warranties that are provided directly to the lender). This Practice Note focuses on the collateral warranties that are provided to the borrower and how a lender takes security over the borrower's rights under such collateral warranties. This Practice Note explains: • what a collateral warranty is, • which collateral warranties the lender should take security over, and • the methods of taking security over the borrower's rights under collateral warranties, ie: ◦ charge, or ◦ assignment by way of security What is a collateral warranty? A collateral warranty is

The development documents are key to any real estate finance transaction involving the development of property. They deal with the nature of the development, the development team's relationships and respective responsibilities and the cost of the development. The value of any property will be significantly compromised if development works are not completed. It is in the lender's interests (as much as the borrower's interests) that the development of a property is completed on time and on budget. The lender will typically take security over the borrower's rights under the key development contracts in the form of a fixed charge. This Practice Note explains: • the key development documents that a lender will want to take security over • how to take security over the key development contracts, and • points to check when taking security over development contracts The package of development documentation Typical development documentation in development facilities are: • the building contract between the borrower and a building contractor • a parent company guarantee or bond provided

In a real estate finance transaction the value of the property is of utmost importance to the lender as this will be the main asset on which the loan will be secured. For this reason, valuations are required for the calculation of the loan to value (LTV) financial covenant (see Practice Note: Real estate finance—financial covenants). Valuations are usually provided as a condition precedent to drawdown (usually defined as the 'Initial Valuation') and then periodically throughout the life of the facility. Where to start with drafting the valuation provisions in a real estate finance transaction The Loan Market Association (LMA) has clauses to cover these provisions in its real estate finance facility agreements—see clause 16.3 (Costs and expenses—valuations) and clause 19.15 (Representations—valuation) in each of the: • Single Currency Term Facility Agreement for Real Estate Finance Multiproperty Investment Transactions (LMA REF Investment Facility Agreement), and • Single Currency Term Facility Agreement for Real Estate Finance Single Property Development Transactions (LMA REF Development Facility Agreement), together, the ‘LMA REF Facility

A company that owns and usually operates income-generating real estate. Real estate investment trusts (REIT) are normally quoted on a stock exchange.

See UK real estate investment trust (UK REIT)

A real estate lawyer is a legal practitioner who advises on the acquisition, disposition, financing, development, leasing and management of land and buildings, including residential, commercial and mixed‑use property. The term is descriptive rather than a defined legal status, and is used broadly consistently across England & Wales, Scotland, Northern Ireland and Ireland; in practice it usually refers to a solicitor (or, in Scotland, a solicitor qualified in Scots property law) specialising in property or real estate law.Real estate lawyers typically handle due diligence, title investigation, contract drafting and negotiation, security and charge documentation, landlord and tenant matters, planning and environmental risk, property tax implications and enforcement of property rights. They may act for institutional investors, developers, lenders, landlords, tenants, public bodies and private clients.In Scots law, real estate work involves heritable property, real rights and registration in the Land Register of Scotland; in the other jurisdictions it centres on estates and interests in land and Land Registry/Registry of Deeds systems. Real estate lawyers frequently work closely with construction, banking, corporate, tax and insolvency teams on complex transactions and property disputes.

ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note covers the anti-avoidance measure for transactions in land which was designed to charge gains of a capital nature arising from the disposal of land to income tax or corporation tax on income. These provisions were introduced in 1969 and were found in sections 815–833 of Corporation Tax Act 2010 (for corporation tax) and sections 752–778 of Income Tax Act 2007 (for income tax). The anti-avoidance measure examined in this Practice Note was replaced and extended by the offshore property developer rules which were introduced with effect from 5 July 2016. For more details of these rules, see Practice Note: Transactions in UK land—tax rules. The provisions of CTA 2010, ss 815–833 (for corporation tax) and ITA 2007, ss 752–778 (for income tax) no longer apply with effect from 5 July 2016. HMRC can also use a range of other measures to counter income tax, corporation

This Practice Note, together with Transactions in UK land—tax rules, discusses the anti-avoidance measures designed to target avoidance of tax on income, profit or gains in relation to transactions over, or trades of dealing in, land. The principal anti-avoidance measure seek to charge gains of a capital nature arising from the disposal of land to income tax or corporation tax as income. This is discussed in Practice Note: Transactions in UK land—tax rules. These rules replaced and extended the transactions in land rules from 5 July 2016 (for detail on the old rules, see Practice Note: Real estate—anti-avoidance: disposals of land and taxing capital gains as income (pre 5 July 2016) [Archived]. This Practice Note discusses: • further measures specifically targeting avoidance of income tax or corporation tax in a real estate context, which: ◦ restrict relief for payments made following a sale and leaseback ◦ tax as income receipts that would otherwise be treated as capital in nature arising from the assignment

The interest rate (or yield or return) less the rate of inflation.

Real property refers, in broad legal practice, to land and anything permanently attached to it, as distinct from movable property (personal property or chattels). It typically includes the land itself, buildings and other structures, fixtures, and certain rights over land (such as easements and, in some contexts, profits à prendre). In England and Wales and Northern Ireland, the concept aligns with “land” under the Law of Property Act 1925 and corresponding legislation, encompassing legal and equitable estates and interests in land. In Ireland, usage is similar, reflecting common law and statutory concepts of estates and interests in land. In Scotland, the nearest equivalent is “heritable property” or “land”, governed by a unititular system of ownership, but “real property” is still used descriptively in comparative or transactional contexts. The term is widely used in real estate transactions, secured lending, landlord and tenant law, conveyancing, property taxation, planning and development, and insolvency. It is a descriptive expression rather than a single statutory term, and its precise scope in any context depends on the relevant legislation, conveyancing practice, and case law.

This Deed is made on [insert day and month] 20[insert year] Parties 1 [Insert name of Chargor], a company incorporated in England and Wales with registered number [insert company number] whose registered office is at [insert address] (the Chargor); and 2 [Insert name of Lender] of [insert address] (the Lender). Recitals: (A) The Lender provides facilities to the Chargor under various financing arrangements. (B) It is a condition of the Lender making the facilities available to the Chargor that the Chargor enter into this Deed in favour of the Lender. It is agreed as follows: 1 Definitions and interpretation 1.1 Definitions In this Deed, unless otherwise provided: Business Day • means a day, other than a Saturday, Sunday or public holiday, on which banks are open for business in London; Financial Indebtedness • means indebtedness arising from: (a) borrowing (including overdrafts) and amounts raised that have the commercial effect of borrowing; (b) any issued bonds, notes, debentures or similar instruments; (c) any liabilities under finance or capital leases; (d) any sold or discounted receivables; (e) [the marked to market value of liabilities under any hedging arrangements (or if any amount is actually due as a result of termination or close-out