Lawyers issue property refinance warning
Businesses looking to refinance or buy commercial property and hoping to take advantage of any potential upcoming interest rate cuts are being urged to ensure their business records are up to date.
While the Monetary Policy Committee has decided to hold interest rates at 5 per cent, further rate cuts are forecast this and next year, with the next meeting taking place on 7 November.
Andrew Stokes (pictured), a commercial property partner at national law firm Clarke Wilmott LLP, says that now is the ideal time for commercial borrowers looking to refinance or acquire commercial property to check that essential business records are up to date, to avoid losing out on acquiring finance.
Records should include regulatory information such as asbestos reports, fire risk assessments, gas and electrical safety certificates, and buildings insurance.
Businesses should also address any issues with titles, or any boundary or access issues, and ensure indemnity policies and environmental reports are up to date.
“This information is needed when refinancing property already held, as well as on new acquisitions in addition to obtaining updated title information and carrying out a suite of searches, once the funding transaction is underway,” says Andrew Stokes.
“A borrower should brief their solicitor on the requirements under their facility agreement and the security documentation being granted prior to the bank instructing their own lawyer to avoid any delays.
“Borrowers should also consider whether independent legal advice may be required for any personal guarantees, or any documentation required, in relation to director or shareholder loans.
“If this can be achieved before solicitors are instructed, it should help speed the process up so that the funding transaction can progress in an efficient manner. Otherwise, your transaction could be delayed while any unknown issues are rectified.”
Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.
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