Under N.Y. Link Act, No. 2 (2), 2.4) and 2 (13), a «loan to construction» is defined as a loan granted for explicit purposes of financing the construction, renovation and/or demolition of an improved property. One of the difficulties inherent in closing these construction loans is that, under current conditions, some titrière companies are unwilling to provide construction loans in New York. One approach that has developed over the past few days is that construction loans are entered into in trust, so that no title insurance or loan proceeds will be granted by the lender until the construction credit contract has actually been filed with Clerk County. Other securitized companies may be willing to trade up to a certain amount in dollars (for example. B up to $10 million) with adequate compensation from the borrower (or associated creditor entity) that compensates the company for any losses resulting from the late registration. Under these conditions, the titrière companies will also likely avoid committing, in a trust agreement, to register the documents within a number of days after closing. With respect to ongoing construction projects in New York, it is likely that current conditions will cause borrowers to modify their existing construction credit contracts. However, Section 22 of the New York Link Act stipulates that any amendment to a construction credit contract is submitted within 10 days of the implementation of the amendment, accompanied by an update to Section 22 Affidavit.i, if the amendment is not made within that 10-day period, a construction credit mortgage may lose some or all of the priority over the rights subsequently filed. rental and sale fees should not be considered an improvement fee (for example.
B the borrower`s legal fees, marketing fees, leasing and leasing fees, with the exception of commercial leases lasting more than three years, must not be included in the construction loan amount or paid by the construction loan to ensure that the lender`s mortgage remains a priority over the debts. The lender`s and borrower`s lawyers will work together to properly document the construction loan, but this may take some time. The construction loan procedure in New York State requires the preparation and presentation of a construction loan contract./Construction Loan Contract. When a lender does not submit such a document to the head of the county in which the property is located, the lender`s security interest, determined by its mortgage, is subject to mechanical pawns that may be submitted at a later date. The construction loan agreement sets out the terms of the closure of the construction loan as well as the obtaining of advances after closing. The construction loan agreement is filed and is a matter of public registration, so the parties may prefer that they do not contain certain details of the transaction that are often included in a loan agreement, such as interest rate, payment rules, financial reporting obligations and/or financial obligations. Therefore, as of the date of this letter, both lenders and borrowers are unsure of how construction credit contracts are amended and, if so, what protections are available if the requirements of Section 22 of the New York Connection Act cannot be met. New York officials have not yet given any indication of the possibility of reducing the 10-day time limit in Section 22, nor was there any indication as to whether some closed offices could be reopened in some capacity to deal with such notifications.