Don't sign up to assignments
O'Brien, S.
Don't sign up to assignments - 2004 - Estates Gazette (0432) 7 August 2004, 57-58(2) .
A prelet agreement can be an important asset to lenders, since it reduces the risk that once a property is built, it will fail to generate the income to service the loan. But the article argues lenders should be wary of seeking an assignment of the benefit of such agreements. Outlines the dangers this could present and discusses ensuring security, enforcement of covenants, danger of assigning the prelet agreement and personal covenants. Concludes that an assignment of a prelet agreement is risky because it may remove the choices from the lender to step in under its warranty package, or to go into possession as mortgagee and oblige them to build the development.
LANDLORD AND TENANT (COVENANTS) ACT 1995
ENFORCEMENT OF COVENANTS
PRELET AGREEMENTS
ASSIGNMENT
LENDERS
COVENANTS
PERSONAL COVENANTS
SECURITY FOR LOAN
Don't sign up to assignments - 2004 - Estates Gazette (0432) 7 August 2004, 57-58(2) .
A prelet agreement can be an important asset to lenders, since it reduces the risk that once a property is built, it will fail to generate the income to service the loan. But the article argues lenders should be wary of seeking an assignment of the benefit of such agreements. Outlines the dangers this could present and discusses ensuring security, enforcement of covenants, danger of assigning the prelet agreement and personal covenants. Concludes that an assignment of a prelet agreement is risky because it may remove the choices from the lender to step in under its warranty package, or to go into possession as mortgagee and oblige them to build the development.
LANDLORD AND TENANT (COVENANTS) ACT 1995
ENFORCEMENT OF COVENANTS
PRELET AGREEMENTS
ASSIGNMENT
LENDERS
COVENANTS
PERSONAL COVENANTS
SECURITY FOR LOAN