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Commercial Real Estate Loan Term Sheet for the United Kingdom

Commercial Real Estate Loan Term Sheet Template for England and Wales

A Commercial Real Estate Loan Term Sheet Template under English and Welsh law sets out the key commercial and legal terms for a proposed real estate financing. It serves as a foundation for negotiation and subsequent loan documentation, outlining essential elements such as loan amount, interest rates, security package, and key conditions. While not typically legally binding (except for certain provisions like confidentiality), it provides a framework for the parties to reach agreement on fundamental terms before proceeding to full documentation.

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Commercial Real Estate Loan Term Sheet

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What is a Commercial Real Estate Loan Term Sheet?

The Commercial Real Estate Loan Term Sheet Template is a crucial preliminary document used in real estate financing transactions in England and Wales. It is typically employed at the initial stages of a commercial property loan negotiation to outline the principal terms of the proposed facility. The document captures essential commercial points including loan amount, tenure, pricing, security structure, and key conditions precedent. While primarily non-binding, it serves as a roadmap for subsequent detailed loan documentation and helps ensure all parties have a clear understanding of the proposed transaction structure. It is particularly valuable in complex commercial real estate transactions where multiple parties may be involved and where clear communication of terms is essential.

What sections should be included in a Commercial Real Estate Loan Term Sheet?

1. Key Transaction Terms: Basic loan details including amount, purpose, and property details

2. Parties: Identification of lender, borrower, and any guarantors

3. Financial Terms: Interest rate, fees, costs, and payment terms

4. Security Package: Details of required security and guarantees

5. Conditions Precedent: Requirements to be met before loan drawdown

What sections are optional to include in a Commercial Real Estate Loan Term Sheet?

1. Hedging Requirements: Interest rate hedging obligations, if applicable

2. Construction Provisions: For development properties only

3. Multiple Property Portfolio Terms: When loan covers multiple properties

4. Green Loan Provisions: For environmentally certified properties or improvements

What schedules should be included in a Commercial Real Estate Loan Term Sheet?

1. Property Schedule: Details of the secured property/properties

2. Financial Covenants Schedule: Detailed financial requirements and calculations

3. Fee Schedule: Breakdown of all applicable fees

4. Required Insurance Schedule: Insurance requirements for the property

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

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions




































Clauses






























Industries

Law of Property Act 1925: Primary legislation governing real property transactions, defining legal estates and interests in land, and establishing mortgage requirements and formalities

Land Registration Act 2002: Legislation covering requirements for registration of charges, priority of mortgages, and notice requirements in property transactions

Financial Services and Markets Act 2000: Key regulatory framework for financial services, establishing requirements for regulated mortgage activities

Consumer Credit Act 1974: Legislation potentially applicable when borrower is a small business, setting out disclosure requirements and consumer protections

FCA Regulations: Financial Conduct Authority regulations applicable to regulated lenders, including conduct of business rules and fair treatment of customers requirements

PRA Requirements: Prudential Regulation Authority requirements covering capital adequacy and risk management for regulated financial institutions

Money Laundering Regulations 2017: Regulations establishing due diligence requirements and identity verification procedures for financial transactions

Companies Act 2006: Corporate law framework relevant for corporate borrowers, covering corporate authority requirements and registration of charges

Environmental Protection Act 1990: Legislation addressing environmental liability considerations and property contamination issues in real estate transactions

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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