Jeffrey B. Steiner and David Broderick Completion Guaranties, Liquidated Damages and the Potential Path of Least Resistance for Construction Lenders
In their Real Estate Financing column, Jeffrey Steiner and David Broderick discuss the many considerations at play (and several negotiated provisions involved) in standard completion guaranties.
September 20, 2022 at 10:33 AM
6 minute read
Contracts
Completion guaranties are an essential component to any commercial real estate financing wherein loan proceeds are used to fund construction work at the subject property. This holds true for ground-up construction financings and significant property redevelopments, but also in other instances when only a portion of the lender's proceeds are being used to fund smaller scale improvement projects. In any instance, no commercial real estate lender wants to foreclose on collateral that can't be utilized to its full potential because of incomplete work.
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