Product Focus: Property Owner’s Protection Policy (POPP) - Clean exit strategy Background
Solution
First Title were approached to assist lawyers acting for a property fund with the acquisition of an entertainment complex consisting of restaurants, bars, cinema and various entertainment areas.
First Title was able to structure the policy to cover the unknown risks, the identified known risks and cover an immediate successor to the fund within five years, thus enabling a clean exit for the fund in the future.
Challenge
The lawyers completed the acquisition and placed the policy on risk at completion. Both the property fund and bank were happy that their risk profile was greatly reduced with a bespoke insurance policy.
The property fund was acquiring the property from administrators and was using bank finance to part fund the acquisition. Both the bank and property fund were keen to protect themselves from any unknown issues due to buying from administrators, where information and disclosures were at a minimum and no title guarantee was provided.
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The lawyers had undertaken some due diligence and requested our POPP coverage along with various known risks as endorsements to the POPP. A concern for the property fund was that it wanted to strategically dispose of the asset within five years and wanted assurance that it would have no contingent liability.
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