The Intermediary – July 2025 - Flipbook - Page 53
SPECIALIST FINANCE
Opinion
Developers: Taking
the legal weight off
D
evelopment finance
for small to medium
(SME) developers
can oen be delayed
or held back by
a range of legal
issues. Section 106 agreements,
planning guidance, title queries or
borrower agreements can all stymie
a development, if not handled
with a commercial approach, due
diligence and skill. Having a close
alignment between lender and lawyer
can greatly mitigate the issues that
developers face, at every stage of a
loan. Lenders and their clients are
afforded far greater certainty, and the
importance of this certainty cannot
be underestimated. Even if legal
issues that arise are insurmountable,
this can be identified at the earliest
opportunity and mitigated to prevent
borrowers losing any additional time
or money.
Addressing legal hurdles
One thorny legal issue, for example,
is the intricacies of Section 106
agreements. The requirement
to integrate these obligations in
a development can be especially
burdensome for SME developers,
who do not have the same financial
resources as larger developers.
There is lile doubt that this process
can be sped up substantially by having
lending and legal teams working
tightly alongside each other to cra
creative and commercial solutions to
the recurring challenges Section 106
agreements pose to developments.
This saves time and money for
developers, who – particularly at the
earlier stages – are keen to maximise
cost savings where possible.
Many borrowers are also becoming
mired in the current delays brought
about by the ‘Gateways’ in the Building
Safety Act.
There is no shortcut or silver bullet
for the current delays, but what can
make the process as simple and as
effective as possible is the correct
preparation and presentation of legal
documents during the early stages of
a development.
DIPINDER SUREY
is transaction management
lawyer at Atelier
By controlling what can be
controlled, and ensuring no further
delays come about, the already
onerous bolenecks are minimised.
In ensuring these contracts and
documents are resolved as early as
possible, issues are far less likely to
arise further down the line.
A collaborative approach
Overcoming costs and obstacles
over the course of a development
is no small feat. The turning point
comes with creating solutions unique
to each client situation. Craing
these solutions is far simpler with
the combined input of a diligent
and hardworking credit team,
alongside the legal flair of transaction
management. Having close
partnerships between developers,
lenders and legal teams cannot be
understated to unlock much-needed
housing supply across the country. ●
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