Are lenders becoming more difficult with RSL’s about seemingly routine property matters? In recent times, it has seemed to me that the answer is “yes”.
I often advise clients on the following matters:-
– the grant of leases of office premises ;
– the preparation of Deeds of Conditions for new affordable housing developments;
– the grant of deeds of servitude and wayleave rights to utility companies for new developments.
These are routine types of transaction, however, once the wording of the lease or other type of deed has been agreed, if there is a fixed security affecting the property in question then it is usually necessary to obtain the written consent of the lender to the grant of the particular deed. This is a normal condition in security deeds.
In previous years, this has proved to be a formality and consents have been forthcoming within a matter of a few days. However, more recently lenders have been taking a closer look at requests for consents:
- they have been checking the current valuation of the secured properties against the total amount of borrowing by an RSL
- asking their own solicitors to review and report on the deed in question.
This adds time and additional expense to the process, but there is usually little choice but to comply with the lender’s requirements.
Don’t be tempted to ignore the need to get such consents – if a lender finds out that you have granted a deed affecting property secured to them without their consent then they may consider that you have breached your loan conditions and this could trigger all sorts of nasty repercussions. Instead:-
- Be aware of the need for such consents
- Plan ahead and approach your lender for consent sooner rather than later
If you’d like legal advice from lawyers who specialise in affordable housing – get in touch with one of the team, who’d be pleased to help.