- Lease Checking Service
- Lease Drafting Service
- Property Searches and Advice
- Negotiation of a new Lease for a Tenant
- Buying or Selling a Business with Freehold or Leasehold Premises
- Assignments of a Lease to a New Tenant
- Purchase or Sale of a Commercial Property
- Employment Contracts
- Shareholders' Agreements
- Business Disputes
- Terms and Conditions for Your Customers
- Negotiating New Leases
- Renewing Leases, Ending Commercial Leases
- Leases - Assigning, Subletting, Alienation
- Commercial Leases - Rent Reviews and Break Clauses
- Sale and Purchase of Businesses
- Non-Payment of Rent - Distraint, Forfeiture, and Bailiffs
- Use Classes, Permitted Uses in Leases, Local Authorities
- Collateral Warranties
- Commercial Leases for Retail Premises
- Leases on Offices and other Commercial Properties
- Restructuring of Property Debt and Revaluing
Collateral Warranties
Collateral warranties are duties of care owed by a building contractor and/or any member or company of the professional team (e.g. architects, surveyors, planning consultants, M&E consultants, contractors, civil engineers, project managers) to the developer/ landowner which are then passed onto a buyer, tenant, or lender. A commercial property solicitor should be able to advise on this, but we have also explained the basic principles below.
Rights of Third Parties in Developments etc.
Before the Contracts (Rights of Third Parties) Act 1999, these duties of care would not automatically be passed onto buyers and tenants etc. unless a collateral warrantee was entered into. Since the passing of the new act, unless that act is expressly excluded in the building contract or Terms of Appointment with the contractor or professional, express collateral warranties are no longer needed. However, some buyers (and tenants etc.) might consider that the insurance cover effected by the contractor or professional is too low, and then a collateral warrantee would be required to provide for an increased limit.
Step In Rights
If a lender has lent a sum of money to developer, and developer goes bust, the lender will want rights to step into the shoes of the developer, with rights to negotiate and treat with the contractor and the professional team. The 1999 legislation does not make this a right, but they can do this if collateral warranties have already been entered into with the professional team. This could end up both allowing the project to continue to the advantage of the lender who recoups his investment, but also the contractors and professionals who will be able to rely on the lender to fulfill the original investor’s obligations.
If you require us to act for you in one of these matters, please call us on 0207 936 1967 (London Fleet Street Office) , 0121 5350012 (Birmingham Office), 0808 155 4870 (Salford Office) or 0161 615 5562 (Manchester Office), and ask to speak to one of our Commercial Property solicitors.