by Michael Hanley , Danny Heffernan, Catherine Jane O'Rourke April-07-2021 in Banking & Financial Services, COVID-19

Further to our previous articles in respect of phases one and two of residential development finance transactions, in this article we will consider the completion phase of such a transaction.


Execution of the construction documentation

As we have outlined previously in article two of this series, appointment agreements are normally entered into between the borrower/employer and members of the construction team. The borrower’s interest in the appointment agreements is then assigned in favour of a lender, and collateral warranties are also separately taken by a lender in order to create a direct contractual link between it and the construction team. Where a development is pre-sold to a private purchaser for use as a private rental sector (“PRS”) scheme or to an Approved Housing Body (AHB) / local authority for use as social housing, the forward-sale contract may also have been assigned in favour of the lender financing the development. Additional protections may also be required by the purchaser, AHB or its funder (see article two).

The execution of an appointment agreement may be by way of agreement or by way of deed. Under the Irish Statute of Limitations, a party has a right to bring an action within 6 years of the date of breach of contract, whereas they have 12 years to bring an action for breach of a deed. This, together with the fact that it is unnecessary to evidence consideration under a deed, are the key benefits of having a document executed as a deed.

Execution requirements (company – including LTDs, DACs and PLCs and subject to any specific limitations in the constitution of that company):

  • An agreement requires the signature of one director only.
  • A deed requires execution by one director and a second director/the company secretary, as well as the company seal being affixed to the document. Another option, which has been commonly used during the COVID-19 pandemic, is for a company to grant a power of attorney to one director in order that his/her signature only will be required in order to execute the document as a deed on behalf of the company.

Execution requirements (individual):

  • An agreement requires an individual’s signature.
  • A deed requires an individual’s signature which should be witnessed. It is best practice for a witness to be physically present. During the pandemic, social-distancing should be observed.

Execution requirements (partnership):

  • An agreement requires the signature of one partner, which will bind the partnership. This is the default position (under the Partnership Act 1890) but may be varied by the terms of a partnership agreement and therefore a partnership agreement should always be reviewed.
  • A deed requires execution by one partner. If that partner is a company, the procedure outlined above for a company executing a deed should be applied; if that partner is an individual the procedure outlined above for an individual executing a deed should be obliged. Regard should be had to the partnership agreement to ensure the partner executing the deed has the authority to do so.

Where a party is a limited partnership, it will most likely be its general partner that will execute an agreement or deed. However, again, the limited partnership agreement should be consulted to ensure that partner has the requisite authority to do so.

An issue we have seen on transactions, where the development consultant is a limited company, is that the principal in that practice may sign a document thinking that they are authorised to do so, when in fact they may not be listed as a director or company secretary of the company. This is not acceptable. It must be a director of the company or another person authorised by a director. A stamp may also often be placed on a document that is to be signed as a deed by the principal of a practice or another signatory which they may understand to be the official company seal, however again, this is not acceptable, and a formal company seal must be affixed to the document (which is a seal that is embossed on the document).

Completion logistics


During the COVID-19 pandemic, completions became problematic for most parties to transactions given the practical difficulties in arranging both signing and delivery of original security and construction documentation. Therefore, there has been a move towards virtual completions.

We recently discussed how to approach virtual completions in a previous article. In summary, it can be agreed between the parties to accept scans of original documentation duly signed and/or executed with wet-ink signatures. The originals can then be delivered once it is safe/possible to do so. This follows the principles of the Mercury1 case and is generally accepted as a market standard of virtual completions as per the Law Society Guidelines. The question as to whether the use of e-signatures is acceptable has also arisen in the context of COVID-19. For further information on this point, please see our team’s recent article. Essentially, although their use is permitted under Irish legislation, given the complex criteria for their use on deeds, they are not often used in practice in the Irish jurisdiction.


Drawdown of funds

In order to advance to the drawdown stage, in addition to all documentation having been executed correctly and delivered to the lender’s solicitors, all conditions precedent to drawdown must be satisfied (legal and non-legal). These will be contained in the facility agreement and may also have been circulated in the lender’s solicitors’ list of completion requirements earlier in the transaction (this list can be used as a checklist for satisfaction of the conditions precedent and as an agenda tool on all-party calls to allocate responsibility for tasks). It is also worth reviewing any points discussed in the initial meeting (see our first article) to ensure these have been dealt with.

Agreement should be reached as early as possible as to whether funds will draw directly from a lender to a borrower / borrower’s solicitors or whether they will be drawn to a lender’s solicitors first. Practically speaking, the quickest approach is for the lender to make a direct transfer to a borrower having first deducted any arrangement fee and legal fees, which can be transferred directly to the solicitors by the lender. This way all funds can flow simultaneously, and delays are avoided although this may not always be possible if there are interlinked transactions/payments.



Completion searches are carried out on every transaction in the relevant registries of the Companies Registration Office, the Property Registration Authority, the Central Office of the High Court, the Examiner’s Office, the Sheriff’s Office and in the planning departments of the relevant local authority. We recommend that searches are carried out in advance of completion so that any potential issues are brought to light early and can be dealt with ahead of completion. Searches can then be updated on completion. This results in a higher immediate cost for these searches but in the long run may save costs by avoiding delays on completion and as a proportion of the transaction value the additional search costs are likely to be low.

Due to the COVID-19 pandemic, the partial closure of some of the public offices has affected the ability to get up-to-date searches from law searchers for the completion of transactions. Therefore, it is worth reviewing the website pages and/or social media updates from the various public offices which provide regular updates.

Below is a non-exhaustive list of issues which may arise on a review of completion searches:

  • Prior charges that may appear on the property which might need to be released/discharged.
  • Enforcement notices on the planning searches which could affect the ability to develop.
  • Judgment and pending proceedings against a borrower/ an obligor which could affect the property or their ability to repay a lender.
  • Changes in directors/company secretaries which could affect the validity of the executed security and construction documentation if a signatory is no longer appointed.

Of course, there will also always be the possibility of transaction specific matters arising as part of the negotiation process which the parties will need to be alive to when reviewing searches.



In order to have a smooth completion, a completion logistics plan should be put in place in advance ensuring that (1) the correct signatories are available to execute documentation; (2) they are clear as to how a document should be executed; and (3) how the documentation can practically be executed whilst COVID-19 restrictions are in place (e.g. use of a power of attorney, having a witness present in a household etc.). Also, requisitioning searches at an early point of a transaction enables the parties to identify and deal with any issues that arise in advance of completion, so there are no surprises on the day.


1 R (on the application of Mercury Tax Group and another) v HMRC [2008] EWHC 2721 


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