Prioritising security in student accommodation contract
We advised lenders on the construction documentation for a £40 million development of student accommodation for a leading London university, including reviewing and negotiating the development agreement, professional appointments, ‘call off’ subcontracts, associated collateral warranties and other security documentation.
The scheme was to be developed by a developer/contractor which directly engaged all the subcontractors and designers, with the result that collateral warranties did not provide complete protection for design and construction risks, and lenders did not have full step-in rights. We negotiated a solution which involved putting in place latent defects insurance and additional guarantees from the developer to provide equivalent security.
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