Glossary definition
Step-in Rights
Contractual rights that allow a lender to take over a development project from the borrower in the event of default, assuming control of the build contract, professional appointments, and site operations. Step-in rights are a critical component of the lender's security package, enabling them to complete the development and protect the value of their loan rather than relying solely on a forced sale.
Definition
Contractual rights that allow a lender to take over a development project from the borrower in the event of default, assuming control of the build contract, professional appointments, and site operations. Step-in rights are a critical component of the lender's security package, enabling them to complete the development and protect the value of their loan rather than relying solely on a forced sale. These rights are typically documented through a duty of care agreement or collateral warranty from the main contractor.
See also
Closely related terms.
Security Package
The full suite of security taken by a lender to protect their position on a development loan, typically including a first legal charge over the property, a debenture over the borrowing company, personal guarantees from directors, and an assignment of key project contracts.
Facility Agreement
The legal contract between a borrower and a lender that sets out all terms and conditions of the loan including the facility amount, interest rate, drawdown mechanics, repayment terms, covenants, and events of default.
First Charge
A legal charge registered against a property title that gives the holder (typically the senior lender) first priority over all other creditors in the event of a sale or enforcement.
Personal Guarantee (PG)
A legally binding commitment from an individual, usually the developer or company director, to personally repay some or all of a loan if the borrowing entity defaults.
Further reading
Guides that touch this term.
Guide
Legal Due Diligence in Development Finance: What Solicitors Check
Legal due diligence is the backbone of every development finance transaction. This guide explains what solicitors investigate, common issues that delay completions, and how to prepare your legal pack.
9 min read readReadGuide
What Happens When a Development Loan Defaults? A Step-by-Step Guide
A detailed walkthrough of the development loan default process in the UK, from initial breach notice through to enforcement, and what developers can do at each stage to protect their interests.
12 min read readReadGuide
The Capital Stack in Property Development: How to Structure Your Funding
A comprehensive guide to understanding and structuring the capital stack in UK property development, from senior debt through mezzanine to equity contributions.
9 min read readRead
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