Advising a lender on the potential impacts of the Building Safety Act

We recently acted for a lender who was proposing to provide a secured, term loan facility for the development, of a new higher risk building.  The development of the new building had commenced at the time that the lender’s loan was to complete – the loan was therefore crucial to the borrower seeing the development successfully completed.

The borrower was claiming that the transitional building control regime applied whereby the works would not fall into the new, far stringent building control regime that applies to higher risk buildings under the Act.  However, the evidence was limited.

We had to carefully analyse the provisions in the Act and the criteria that must be met for the transitional provisions to apply in order to advise the client on the same.  We also advised on the possible impacts on the development and on the loan if the new regime were deemed not to apply, and offered options to the client for mitigating those impacts.

Our advice and work with the client allowed them to consider the risks and how those risks would be mitigated off the back of which, the client proceeded with the loan, allowing the borrower-developer access to the funding to enable the development to continue.

You can read a similar client story here.