Commercial finance and development
Commercial refinance
Legal work for a new commercial mortgage or refinance, meeting the lender's requirements, the valuation, a report on title and security registration.
This work depends on the details, so our team prepares a quote for you, usually within one working day.
Refinancing commercial property means replacing an existing loan, or borrowing against property you already own, to release capital, secure better terms or fund a new project. Ownership does not change, but the lender will not release money until its solicitors are satisfied the property is good security for the loan.
Property owners, investors and trading businesses use this service to refinance offices, shops, industrial units or let portfolios through a bank or specialist lender. Your solicitor explains the facility letter (the formal loan offer), deals with the lender's solicitors, gathers what they need for the report on title, arranges signing of the security documents and pays off the old lender on completion.
Every facility has its own conditions, so the quote is prepared individually. Send us the lender's offer or term sheet through the quote request form and our team will usually come back within one working day.
What is involved
Most commercial lenders use separate solicitors, so your solicitor acts for you while the lender's solicitor protects the lender. A typical refinance runs like this:
- The facility letter: explaining the key terms, such as conditions precedent (things that must be done before money is released), covenants on loan to value (the loan as a share of the property's value) and interest cover (how far the income covers the interest), default events and fees.
- Valuation: the lender instructs a valuer whose report must support the loan amount. Points the valuer raises, such as short leases or disrepair, often turn into legal questions.
- Title and searches: gathering title documents, leases and searches. The lender may want a report on title or a certificate of title, a formal confirmation that the property has good title and no problems the lender should know about.
- Security documents: a legal charge, plus any debenture (security over a company's other assets), an assignment of rental income, guarantees and insurance noting the lender's interest.
- Guarantors: anyone giving a personal guarantee is usually asked to take independent legal advice.
- Completion: the new lender releases funds, the old loan is repaid and its charge is removed.
- Registration: registering the new charge at HM Land Registry and, for a company borrower, at Companies House within 21 days.
What the legal fee covers
- Reviewing and explaining the facility letter and security documents
- Gathering title documents, leases and searches for the lender
- Preparing a report on title or certificate of title, where required
- Dealing with the lender's solicitor and its conditions precedent
- Obtaining redemption figures and repaying the existing lender
- Arranging signing of the legal charge and related documents
- Registering the charge at HM Land Registry and Companies House
Costs you may see on top
- The lender's legal fees, which the borrower usually pays
- The valuation fee charged by the lender's valuer
- Arrangement and broker fees under the facility
- Early repayment charges on the existing loan
- Updated searches, if the lender will not rely on older ones
- HM Land Registry fees for registering the new charge
- Independent legal advice for personal guarantors
What to have ready
- The facility letter or term sheet from the new lender
- Details of your current lender and loan account
- Title numbers or deeds for each property being charged
- Copies of all leases, the rent schedule and service charge information
- Company documents: certificate of incorporation, articles and a board resolution
- Buildings insurance details
- Who will guarantee the loan personally, if anyone
How long it takes
A straightforward refinance of a single property often completes in 4 to 8 weeks from the facility letter. Larger loans, several properties, let investments with many leases or lenders with detailed conditions can take 8 to 12 weeks or more.
The valuation and the lender's solicitor's list of requirements usually set the pace. Things move faster when title documents, leases and company paperwork are ready at the start, the existing lender sends redemption figures promptly and guarantors can see their adviser quickly.
Things to watch for
- Read the covenants, not just the interest rate. Breaching a loan to value or interest cover covenant, for example after a tenant leaves, can be an event of default even if you have never missed a payment.
- Expect to pay two sets of legal fees. The borrower usually pays the lender's solicitor as well as its own, so ask for an estimate of the lender's costs at the outset.
- A company's charge must be registered at Companies House within 21 days, starting the day after it is created. If the deadline is missed, only a court can extend it, and the lender will treat that as a serious problem.
- Check whether future lettings need the lender's consent. Commercial facilities commonly restrict granting, varying or surrendering leases without permission, which affects how you manage the property.
- Valuation points often become legal ones. Short leases, missing consents or tenants with break options can reduce the loan available, so tell your broker about them early.
Questions people ask
What is a report on title?
It is a report, prepared by a solicitor, that tells the lender about the property's ownership, rights, restrictions, leases and searches, and flags anything that could affect its value as security. A certificate of title is a more formal version, often in a standard form, in which the solicitor confirms specific points. Lenders rely on it when deciding whether to release funds, so it is prepared carefully and can take time.
Is there any SDLT on a refinance?
Usually not. A refinance does not change who owns the property, and a mortgage or charge is not itself taxed. SDLT or LTT can arise if the refinance is combined with a change of ownership, such as moving the property into a company or adding a co-owner, so tell your solicitor if anything like that is planned.
Can the same solicitor act for me and the lender?
Some lenders allow one firm to act for both on smaller loans, but most commercial lenders insist on their own solicitors. Separate representation adds cost, but it means each side has someone looking after its interests. Your quote will show whether a separate lender's fee is expected.
Do guarantors need their own advice?
Usually, yes. Lenders commonly require anyone giving a personal guarantee, and sometimes a spouse or partner whose home is involved, to take independent legal advice and to have the adviser confirm that the risks were explained. Lenders often specify who can give that advice, so allow time for these appointments in the timetable.
Who does the work
Your matter is handled by a law firm regulated by the Solicitors Regulation Authority, the Council for Licensed Conveyancers or CILEx Regulation, or in Northern Ireland by a solicitor regulated by the Law Society of Northern Ireland. At the moment the law firms on our panel act for property in England and Wales, so for property in Northern Ireland we tell you whether a firm can act for you before we pass your details to anyone. The firm confirms who will work on your file, their experience and its terms before you instruct it. How we choose our firms.