Whether it’s over ransom strips, planning, title or complex leases, an in-house legal team can identify issues before they become problems and advise whether they might affect a lending decision.
Words by Phil Derbyshire Managing director at Goldentree Financial Services
When people talk about speed in specialist lending, the focus is usually on underwriting or valuations. In reality, one of the biggest causes of delay – and even of deals falling over completely – is the legal process.
The instinct can be to see legal as the final stage before completion but, in my experience, that is already too late. The real value comes from involving legal much earlier, while there is still time to identify issues, have sensible conversations and find practical solutions.
Specialist property finance exists to solve problems that mainstream lenders often cannot. Speed has always been important but, today, brokers and borrowers are looking for more than just a quick turnaround. They’re choosing specialist lenders because they want certainty of execution, flexibility, experienced people and confidence that someone will look at the deal commercially rather than simply follow a process.
That is why we made the decision more than 15 years ago to bring legal expertise in-house.
We believe the two biggest causes of delay in bridging and development finance are valuations and legals. That’s why we don’t outsource either. Our RICS chartered surveyors carry out valuations in-house and our legal team works alongside our lending team every day.
For us, it’s not about saving a few days but about having the right conversations at the right time.
Our BDMs can sit down with our legal team while a deal is still being structured and ask questions about title, planning, lease clauses or access before the application has gone too far. If there’s an issue, we’d rather know on day one than three weeks later.
Sometimes, those issues can be resolved. Other times, they can’t. Either way, brokers and borrowers are getting answers before they have spent unnecessary time and money.
Immediate discussions
Kate Clough, our head of legal services, often says the legal team’s role isn’t simply to advise once a deal reaches completion.
“We’re part of the decision-making process from the outset. If we can identify a potential issue early enough, there’s usually more time to find a practical solution,” she says.
That joined-up approach also changes how quickly decisions can be made. Instead of waiting for questions to go backwards and forwards between different firms over several days, our surveyors, underwriters and legal team are all speaking to each other as part of the same business. If something needs discussing, it happens here and then.
One example that stands out involved a developer who approached us after another lender withdrew late in the process. They were building 44 homes in south Wales, with land already started on site and they urgently needed a development facility of more than £5m.
We received the enquiry on a Thursday afternoon. Our BDM and surveyor were on site by 9am on Friday, the deal was underwritten over the weekend, our monitoring surveyor attended site on Monday and the first drawdown was released on the following Friday.
Speed versus risk?
People often assume that completing a deal quickly means corners have been cut. I’d argue the opposite. The quickest deals are usually the ones where the right people are involved from the start.
The same applies to more legally complex transactions. We recently funded the acquisition of 33 long leasehold apartments where the timetable was particularly tight. Having surveying and legal expertise in-house helped us meet the deadline while also reducing the client’s upfront costs by avoiding multiple external appointments.
Of course, moving quickly should never come at the expense of managing risk.
Kate makes an important point: “Speed and risk aren’t mutually exclusive. It’s not about cutting corners or missing things out. It’s about bringing the right expertise together early enough to make informed decisions.”
I completely agree.
Our legal team has spent more than 20 years working on bridging and development finance transactions. They’ve dealt with everything from ransom strips and Land Registry restrictions to planning issues and complex lease structures. Very little surprises them. That experience means they are not just identifying risks; they’re helping the lending team understand which issues can be managed and which genuinely change the lending decision.
There are lessons here for brokers, too.
One of the simplest ways to keep a deal moving is to give the lender the full picture from the outset. If there are title issues, planning complications, easements or access concerns, don’t wait for them to come out during legal due diligence. Raise them early. The earlier everyone understands the challenges, the sooner they can decide how to deal with them. On urgent transactions, ordering searches at the beginning of the process can also save valuable time.
The specialist lending market has evolved significantly over the past decade and I think borrowers’ expectations have changed with it. Speed will always matter but, increasingly, they’re looking for certainty, transparency and lenders who can make pragmatic decisions.
For me, that’s where in-house legal teams can make a real difference. Not because they make deals easier but because they help identify challenges earlier, solve problems more efficiently and keep transactions moving without compromising the quality of the decision-making.
Ultimately, fast lending isn’t about doing less due diligence. It’s about doing it sooner.
Read Phil Derbyshire’s article in the latest issue of Bridging & Commercial to find out why early legal input can make a real difference to complex and time-sensitive transactions.
Our in-house legal specialists work alongside our underwriting, sales and surveying teams to help identify challenges early and keep deals moving.
Want to connect with Phil? You can find him on LinkedIn:👉 linkedin.com/in/philip-derbyshire-a9ba5815
