Finance
Security Documentation
A significant part of Turner Hopkin’s practice involves assisting clients in relation to finance.
There is often a funding component involved in residential commercial property transactions. We assist clients in preparation of security documentation whether it be bank funding or vendor finance. This involves the review of security documentation including loan agreements, guarantees and mortgage memoranda to ensure they represent the transaction negotiated by the parties. We also assist in ensuring ancillary documentation such as company and shareholder resolutions, trustee resolutions and the like are complied with.
We have considerable experience and expertise in the review and preparation of security documentation for entities who provide funding and lending as their principal business activity. This includes review of standard documentation and preparation of new precedents.
Occasionally lenders can encounter a default by a borrower. We have proven experience and success in assisting the lenders in their preliminary assessment of the security options including, where necessary, appointing appropriate valuers or assessing and commenting on the options available to maximise their return from the security (e.g. obtaining a subdivision consent or reviewing the validity of guarantees and their worth). We provide comprehensive professional services in all aspects of the mortgagee sale process including issuing letters of demand and preparation of the statutory notices required before a mortgagee sale can take place, preparation of particulars and conditions of sale (the contract upon which the property is sold through to final settlement of the transaction).
There are often competing securities and it is vital any impediments to realising the security are identified early in the process and addressed to maximise the return on investment.
If you would like to discuss any aspect of the professional services in this area, please contact Mike Newdick or Lianne Jamieson.
Investment / Contributory Mortgage Companies
We have, at Turner Hopkins, been responsible for the administration of Turner Hopkins Solicitors Nominee Company Limited. This is a form of a contributory mortgage company whereby individuals, who are often clients, contribute moneys to a fund which is in turn advanced to a party seeking mortgage funding e.g. a loan advance of $300,000.00 may be made up from 10 contributors (lenders) advancing $30,000.00 each. The decision to recommend the proposal to the contributors is made by a security panel knowledgeable in best practice banking and security assessment. Only when it has passed this initial screening process will a proposition in the form of an application be forwarded to potential contributors for consent.
A significant advantage of a contributory mortgage company is the investment moneys are lent out on a specific property which is considered and approved by the lenders (contributors). Moneys are not lent out in a global fund where the contributor has no control over the ultimate destination of their investment. We believe such investment warrants consideration by any client and investor for inclusion in a diversified investment portfolio and by anyone seeking a sound and secure investment.
Turner Hopkins Solicitors Nominee Company Limited operates under the strict requirements which are set by the New Zealand Law Society Solicitors Contributory Mortgage Rules. Accordingly, we advance funds only to a maximum of 66.6% improved property (i.e. a house or dwelling) and 50% on vacant land based as assessed by valuation from a reputable registered valuer. The valuation is provided to our contributors for their consideration and if acceptable they then consent to the proposal.
Interest on the investors funds is paid monthly and the current rate of interest is 8.5% per annum, ensuring a regular and competitive income stream. Terms are generally for a relatively short period (usually 1 to 2 years or less).
We carefully vet borrowers applying for funding to ensure that not only do they provide adequate security, but we are satisfied as to their ability to meet the interest payments due under the loan and the manner in which the principal sum will be repaid at the end of either a one or two year term.
We appreciate that a prudent investors will wish to spread their investments to mitigate risks and we encourage our clients – investors to do so. Any investor may choose a set limit of the amount invested in any one mortgage investment or with any one borrower. We strongly believe, however, that the Turner Hopkins Solicitors Nominee Company Limited offers a real and appealing option for investment. We are pleased to have observed that even throughout the turbulent times of recent years, our nominee company investments have proven reliable, robust and secured and have offered and excellent investment opportunity and income return for our investors. We have set out below some recent funding applications that may be of interest.
If you would like to enquire further, please email Mike Newdick or Lianne Jamieson for further information.
