Savills reported that the beginning of 2020 the London commercial market was booming, and while we cannot underestimate the effect covid-19 will continue to have on the economy it is reassuring to see that transactions for Commercial Property are once again moving.
As we continue to provide insight into the effect Covid-19 has had on the legal industry, our Commercial Property case study illustrates how we have continued to support our clients with their business needs. Commercial Property Solicitor, Simon Nicolaides, explains how he was successfully able to complete a commercial property transaction during the lockdown, working with trusted business contacts.
Before March 23rd, our client was buying a property. It had already exchanged as it had been purchased from an auction sale. The client was purchasing the property by obtaining a mortgage which would include the property and raising finance by way of a second charge over their residential home.
Unfortunately, as a result of Covid-19, the initial first lender was unable to give the same loan offer. This meant the client had to find a separate second lender for the residential property. The first lender would still lend on the purchase property.
With the on-going uncertainty of Covid-19, the proposed second lender reduced their initial loan offer leaving the client exposed for a large shortfall. To secure the completion of the transaction, the ‘Seller’ offered to lend the remaining balance and secured this via a second charge over the purchased property.
As there were now two new loans being placed on the purchase property, a deed of priority securing the first lender’s position had to be drafted.
The transaction was further complicated due to part of the residential lender’s requirements was to add the spouse to the transaction, a deed of variation to the initial sales contract was required to facilitate this. The matter had exceeded the contractual completion date and an agreement for an extension within the deed of variation had to be reached.
Building meaningful working relationships and trust between colleagues is incredibly important to ensure that business transactions continue to run smoothly and promptly. Covid-19 continues to highlight the importance of collaborative working to get the job done, this case was a complicated transaction, with a lot of moving parts, that being said I look forward to working with the same external teams on the next few!
For more information on how Steeles Law Commercial Property team can support you and your business, please call 020 7421 1720 (London) or 01603 598000 (Norwich) or email firstname.lastname@example.org and a member of the team will contact you.
To read our previous Lawyer Lockdown Diaries please use the links below:
*The information provided in this article is designed to provide useful information on the subject, not to provide specific legal advice.