Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Estate definition

What does Estate mean? In practice, “estate” describes either: (1) the nature and duration of a person’s proprietary interest in land; or (2) the aggregate property of a person, commonly on death or bankruptcy. England & Wales and Northern Ireland: An estate in land denotes the time-based interest, not the land itself. Statute and case law limit legal estates primarily to freehold (fee simple absolute in possession) and leasehold (term of years absolute), with other interests (for example, life interests and beneficial interests under a trust) arising in equity. This concept underpins conveyancing, security, priorities and land registration. Ireland: Under the Land and Conveyancing Law Reform...

Real estate investment finance facilities: structures, security, intercreditor terms, drawdown and prepayment, hedging, bank accounts, valuations, covenants, insurance and property-specific defaults, including LMA documentation (England and Wales)

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Practice notes

Real estate finance investment facilities provide a loan to a borrower to acquire a single property or a portfolio (or to refinance an earlier acquisition). Security is taken over the asset being acquired (or refinanced) and over the cashflow it produces (ie rental receipts). Property-related due diligence is among the most critical elements of the deal before funds are advanced. Ensuring the property’s value and condition are preserved for the duration of the loan is likewise essential. Bank account mechanics are central to real estate finance investment deals and can be relatively intricate. In a simple structure, tenants pay rent into a secured account, which is applied to service interest and repay capital on the facility. Surplus monies may then be swept to the borrower’s current account and drawn by the borrower. This Practice Note sets out the principal features of a standard real estate finance investment deal. Development facilities raise further matters that must be addressed—see Practice Note: Real estate finance—development facilities—key features. These arrangements focus on applying rent to debt service first, before any remaining sums move to the borrower’s account for use. The approach is typical in practice

Structure of a real estate finance investment transaction

The...

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Web page updated on 21/05/2026

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