Collateral Warranties And Step-In: What A Bank Should Know
Banks providing funding for a project need to know that their
interests are protected and their options kept open in the event of
a Borrower going into administration. Ian McCann narrates the
reasons for having collateral warranties and the consequences of a
Bank exercising its step-in rights through them.
Collateral Warranties
Seen from the viewpoint of a Bank, a project developer is a
Borrower and has a direct contractual relationship with the Bank.
In turn, the Borrower appoints his professional team and has a
separate, direct contractual relationship with them. In the
interests of clarity the Borrower's "professional
team" means the contractor and the professionals (such as
structural engineer, architect, quantity surveyor, etc) and
"construction documents" means the building contract and
the professional team's appointments.
