Legals

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The legal process is usually the longest part of a bridging transaction, and the solicitor you instruct has more influence on the speed of completion than almost anything else.

Why commercial lending is different

Residential conveyancing and mortgage work is largely standardised. Bridging and commercial loans are not. They involve facility agreements, legal charges, personal guarantees, company documents and searches, lease reviews and title issues that often need resolving in days rather than weeks. The lender’s solicitor will raise detailed enquiries, and your solicitor needs to answer them quickly and knowledgeably.

A conveyancer or residential mortgage solicitor who does not regularly handle this work can add weeks to a transaction. You need a firm that specialises in acting for borrowers on bridging and commercial loans.

What to look for in a firm

Look for a firm regulated by the Solicitors Regulation Authority that regularly acts for borrowers in this market, with a named solicitor who has the capacity to deal with your matter promptly. Experience with your type of property, whether leasehold, commercial, land or development, is also valuable. Many lenders set minimum requirements for the borrower’s solicitor, such as the number of partners, and some will only accept firms they have approved. We can confirm the lender’s requirements before you instruct anyone.

Two sets of legal fees

The lender will instruct its own solicitor to act for it. In most cases, the borrower pays the lender’s legal costs as well as their own. The lender’s solicitor will usually ask for an undertaking or a payment on account before starting work. Some lenders allow one firm to act for both sides on straightforward cases, which can save time and cost.

How to keep things moving

Instruct your solicitor as soon as terms are agreed. Provide your title documents, leases, tenancy agreements, planning documents and company documents as early as possible, and reply promptly to any requests. Tell your solicitor straight away about any existing charges on the property and any deadlines you are working to, such as an auction completion date.

If you do not already have a suitable firm, please speak to us and we can suggest firms experienced in this type of work.