Equity Loan Agreement Template for England and Wales

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Key Requirements PROMPT example:

Equity Loan Agreement

"I need an Equity Loan Agreement for a £500,000 loan against a commercial property in Manchester, where the lender will receive 25% of any appreciation in the property value, with the loan to be drawn down by March 2025."

Document background
The Equity Loan Agreement is utilized when a lender provides financing secured against property while also participating in the property's future value appreciation. This document is commonly used in the UK property market, particularly under English and Welsh jurisdiction, for both residential and commercial properties. The agreement comprehensively covers loan terms, security arrangements, valuation mechanisms, and the method for calculating the lender's share in property appreciation. It must comply with UK financial regulations, including FCA requirements and consumer protection legislation where applicable.
Suggested Sections

1. Parties: Identification and details of the lender and borrower

2. Background: Context of the loan agreement and purpose of the arrangement

3. Definitions: Key terms and their meanings used throughout the agreement

4. Loan Amount and Purpose: Specifics of the loan amount, its intended use, and any conditions attached

5. Interest and Charges: Details of interest calculation method, rates, and any additional charges or fees

6. Repayment Terms: Schedule and methods of repayment, including payment dates and amounts

7. Security: Details of property or assets securing the loan and related obligations

8. Representations and Warranties: Statements of fact and assurances given by the borrower

9. Covenants: Ongoing obligations of the borrower throughout the loan term

10. Events of Default: Circumstances that constitute default and consequences thereof

11. Boilerplate Provisions: Standard legal provisions including notices, governing law, and jurisdiction

Optional Sections

1. Early Repayment: Terms and conditions for early loan settlement, including any penalties or fees

2. Assignment: Rights and restrictions regarding the transfer or assignment of the agreement

3. Insurance Requirements: Specific insurance coverage requirements for the borrower

4. Further Advances: Provisions for additional borrowing under the same security

5. Change of Control: Provisions dealing with changes in ownership or control of the borrower

Suggested Schedules

1. Schedule 1 - Property Details: Detailed description of the property securing the loan

2. Schedule 2 - Repayment Schedule: Detailed payment schedule including dates, amounts, and interest calculations

3. Schedule 3 - Conditions Precedent: List of conditions that must be satisfied before loan drawdown

4. Schedule 4 - Form of Drawdown Notice: Template for requesting loan disbursements

5. Appendix A - Form of Notices: Standard form notices for various communications under the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Consumer Credit Act 1974: Primary legislation governing consumer credit agreements in England and Wales, applicable if the borrower is an individual

Financial Services and Markets Act 2000: Key legislation regulating financial services activities and establishing the regulatory framework for financial services in the UK

Law of Property Act 1925: Fundamental legislation governing property law and securities in England and Wales

Consumer Rights Act 2015: Legislation protecting consumer rights and governing unfair terms in consumer contracts

Unfair Contract Terms Act 1977: Legislation regulating unfair terms in contracts, particularly exclusion and limitation clauses

Consumer Protection from Unfair Trading Regulations 2008: Regulations protecting consumers from unfair commercial practices

FCA Handbook - MCOB: Mortgages and Home Finance: Conduct of Business Sourcebook - regulatory requirements for mortgage and home finance activities

FCA Handbook - CONC: Consumer Credit Sourcebook - regulatory requirements for consumer credit activities

UK General Data Protection Regulation: Post-Brexit data protection legislation governing the processing of personal data

Data Protection Act 2018: UK's implementation of data protection standards and supplementary regulations to the UK GDPR

Money Laundering Regulations 2017: Regulations concerning anti-money laundering and counter-terrorist financing requirements

Proceeds of Crime Act 2002: Legislation dealing with money laundering and proceeds of crime

Human Rights Act 1998: Legislation incorporating the European Convention on Human Rights into UK law

Equality Act 2010: Legislation protecting against discrimination and promoting equality

Financial Services (Distance Marketing) Regulations 2004: Regulations governing the distance marketing of financial services

Electronic Commerce Regulations 2002: Regulations governing electronic commerce and digital agreements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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