Product Focus: Distressed assets Background First Title was approached by lawyers acting on behalf of their purchasing client. The client was acquiring (by way of share acquisition) in excess of 50 properties with a mix of business and industrial uses. Timing and costs were critical factors, with bank debt being provided.
warranties and to cover a percentage of the properties where full title reports had not been prepared.
Challenge
• Reduced the burden of the client’s lawyers performing full due diligence on the portfolio. Instead, First Title undertook a sampling exercise of the freehold and long leasehold titles.
The properties were formerly distressed assets acquired by the outgoing ownership vehicle. As such, the title reps and warranties were weak. Due to time and cost limitations on the deal, the client’s lawyers did not have sufficient time and resource to undertake full due diligence. The risk for the client was the limited reliance on seller’s information and weak reps and warranties. A number of known risk issues were identified on a number of properties and the client required individual policies for these risks.
Solution Following the assessment of the risk profile, the client was offered a Property Owner’s Protection Policy (POPP) (also known as a ‘title guarantee wrapper’) to fill those information gaps, bolster the lack of good reps and
The POPP policy coverage supplied by First Title:
• Offered cover for unknown title defects across every single asset in the portfolio. • Provided protection for the buyer client and its lender. • Extended coverage to include lack of local authority search. First Title also provided individual known risk policies for a number of properties across the portfolio, fulfilling the client’s requirement for additional property specific policies. For further information on how First Title can assist you with its range of specialist cover and policies, please contact directly using the details below.
Call: +44 (0)207 160 8100 Email: info@firsttitle.co.uk Visit: www.firsttitle.co.uk First Title Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. First Title Insurance plc is registered in England under company number 01112603. Registered office: First Title Insurance plc, ECA Court, 24-26 South Park, Sevenoaks, Kent TN13 1DU.
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