Security in real estate finance transactions

Lenders in real estate finance transactions will usually look to take a full suite of security over all of the assets of the borrower, including but not limited to:

• • the land itself, including any fixtures forming part of that land and any fittings or equipment used on the land;
• • the borrower’s rights to any rental income generated from the commercial exploitation of the land;
• • the positive balance of the borrower’s key bank accounts;
• • the borrower’s rights to the proceeds of insurance claims;
• • with respect to development finance, the borrower’s rights under construction and development contracts and any takeouts (agreements to lease and/or any presale contracts);
• • any shares or units in other entities that the borrower has rights to; and
• • the personal property of the borrower.

This guidance note details how security over the assets listed above is typically structured and documented in a real estate finance transaction. It also highlights the key provisions of the security documents.

See Security in real estate finance transactions.