Development halts due to funding restrictions
What was the situation?
The client approached us needing to raise additional funds to complete a development which had to halt due to funding restrictions.
What was the issue?
The client had taken out a first charge loan and a second loan, without gaining consent from the lender to use the second loan finance to fund their development.
What was the process?
We completed a full review of all the client’s assets and established that they had other assets that we could use to raise the money, avoiding any penalties with any of the existing arrangements. We suggested the client take a charge through another one of their properties to fund the development, enabling them to complete the works and apply for planning for further development at the bottom of the land.
Within the legal process we also discovered that the proposed property, which the new lender was able take charge on, didn’t have listed building consent which is required when converting to a self-contained flat. We had several discussions with the new lender and provided information which demonstrated that the council was aware of the flat’s existence. This meant the lender could take a pragmatic view and were able to complete on the loan.
What was the solution?
We worked to produce a short-term facility to raise the balance of the build costs, the professional fees and associated costs relating to the addition planning gain. Our solution also meant the client was no longer in default on their first charge.
The client was extremely happy with the outcome and the way we and the lender tackled the problems and found solutions. The client is now back on track and looking forward to their next project.
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