Lender Security Over Rent Accounts: Navigating Account Bank Requirements

In real estate finance transactions, a borrower will usually be required to grant a charge over their bank accounts to the lender. One of the most important bank accounts from a lender perspective is the "rent account", into which the occupational tenants of the borrower pay their rent. The balance of the rent account is used to service the debt in accordance with the payment waterfall in the loan agreement. The lender will expect to be granted a fixed charge over the rent account and in order to create a fixed charge, will require control over the rent account. Control in this context is usually achieved by the lender being sole signatory on the bank account mandate so that no payments can be made out of the relevant account without its consent.