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Finance providers

What are the typical providers of real estate financing in your jurisdiction? Are there any restrictions on who may provide financing?

There are no restrictions as to which parties can provide financing. Typical providers include:

  • commercial banks;
  • federal mortgage banks;
  • private mortgage banks;
  • private individuals and companies; and
  • foreign investors.

Financing structures

What are the most common structures used to secure real estate financing and how are these security interests perfected?

The most common structures used to secure real estate financing are:

  • an assignment of the developer’s rights under the finance lease agreement; and
  • registration of the legal mortgage in the Land Registry.

Security is perfected by the registration of the legal mortgage deed.

What covenants are typically made in financing agreements?

Covenants made in financing agreements generally concern:

  • the financing amount;
  • the financing’s purpose;
  • the financing’s tenor;
  • the applicable interest rate;
  • the source of repayment;
  • amortisation;
  • security;
  • a cross default clause;
  • a default clause;
  • the right to set-off; and
  • a wavier.

Enforcement of security

How are security interests enforced in the event of default?

Security interests are enforced by way of:

  • foreclosure, in the case of a registered mortgage; and
  • a court order for the sale of security.

What is the typical timeframe for the enforcement of security?

For a registered mortgage, the law requires that six months’ notice be provided to the mortgagee on default of payment before sale. However, in the case of a court order, the length of enforcement is determined by the time of delivery of the court judgment, which may be subject to appeal before a higher court.

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