FINANCING REAL ESTATE PROJECTS

BONAMY MERCIECA

The Time is now ….

When getting a loan from a bank, one of the decision making factors is the interest rate together with other determinant factors like the quality of service and the speed of response.

In the recent months we have been hearing of the continuous increase of European Centra Bank (ECB) reference rates as a tentative to contain inflation by applying monetary policy instruments. The ECB announced a 0.5% increase in July 2022, 0.75% in September and a further 0.75% in November 2022 in the main borrowing rate. Markets see ECB rates reaching a peak of 3% at some stage in the second quarter of next year.

In these times of economic uncertainty and continuing inflationary pressure, we would be looking at how best we can manage our finances, both on a personal basis and on a corporate business level. It is wise to understand whether there is the potential to save on our current interest rate, as better interest rates lead to better cashflow management.

What can we do to benefit from better rates on existing loans?

An existing loan can be replaced by a new loan at better terms. This is normally referred to as Loan Refinancing There are various benefits for refinancing a loan; the main objective is an improvement in the repayment commitments, which improves the overall financial position, including cashflow and thus helps in saving money.

Is it the right time to consider refinancing?

If you can benefit from any or a mix of any of the below improvements … a) Better Interest Rates – a lower rate of interest will lower the loan repayment, leaving us with excess fund when compared to the previous repayment. b) Better Term – another way how to benefit from lower commitment is the spread of the capital repayment over a longer term. Although the same capital is to be repaid, spreading it over more repayments provides flexibility. c) Better Security – following frequent capital repayments, the gap between the value of security (normally increases in value) and the outstanding balance (decreases by time) widens. The borrower can therefore benefit from this in different ways:

- either request to be granted an additional new loan on the excess security

- or request to get some of the excess security released. … then Now is the right time!

Why FCM Bank and what are we offering?

We at FCM Bank understand that moving your loan could lead to extra expenses. Our aim is to make these improvements simple and quick, while keeping expenses to a minimum. With our current limited offer, all fees related to processing will be waived and the architect and legal fees will be partially refunded. We are also guaranteeing our clients a grace period of stable loan repayments.

If this is of interest to you and you want to know more of how you can benefit from this offer, you may call us on 79800128 or send us an email on corporate@fcmbank.com.mt to set up a meeting with our professional team.

Bonamy Mercieca is the Chief Corporate Officer at FCM Bank. She is experienced in Corporate Management with a demonstrated history of working in the financial services industry. Skilled in Portfolio Management, Business Planning, Risk Management and Customer Service.

Strong Business Development professional with a Executive Master in Business Administration from University of Malta.

Court Report

DR. IVAN MIFSUD LLD PhD

Employer’s responsibility for an accident at work is not automatic.

In a court case decided by the First Hall of the Civil Court on the 29th of November 2022 (Ref: application 437/13JRM), the court decided that the employer was not responsible for the death of their employee, and therefore dismissed the action instituted by the family of the deceased.

This case was instituted by the widow and immediate family of a builder who died on a construction site, when part of the building in which he was working collapsed. A number of legal issues arose, but what concerns us most for the purposes of this article is what the court had to say about employers’ and employees’ responsibilities where occupational health and safety are concerned. These responsibilities include that the employer is responsible for his actions towards his employees, unless it is shown that the employees did not abide by the instructions of their employer or take the precautions their employer required them to take, or that the employee was negligent in his work. All this emerges from the Civil Code, while according to occupational health and safety legislation the onus of proof that the accident occurred despite having provided a safe working environment, lies on the employer. The employer is obliged, amongst other things, to train his employees in health and safety related issues, and also to provide adequate supervision to ensure the health and safety of the workers.

The court further pointed out that the employer must be extra vigilant for situations which involve an element of routine, because this could be risky; workers might with time develop a false sense of security; there is the risk that they will adopt a mentality that simply because nothing ever went wrong then nothing will ever go wrong. Such a risk has to be countered by the employer because the employer remains liable and the fact that no accident ever occurred does not mean that the system is a safe one exonerating the employer. On the other hand, the employee must also look after their own safety, must work hand in hand with the employer where occupational health and safety are concerned, and also must avoid situations where they might be exposed to danger. The employee must be aware of the dangers at their place of work and must never do anything which can increase risk of causing damage or injury to himself or to others.

The court further pointed out that one manner in which an employer shows that they fulfilled their duties, is to prove that they carried out adequate supervision. The obligation to supervise cannot be neglected, and no amount of training given to the employees will make up for neglection in supervision of the same employees, because the obligation to supervise is an intrinsic part of occupational health and safety obligations.

In the case before it, the victim of the fatal accident was actually entrusted by the employer with the supervision of his co-workers; he was also engaged to do work which he was clearly skilled to perform. These proven factors militated against the victim and his family who were seeking reparation, and in fact the court found against them, deeming that the employer could not held liable to pay damages to the family of the victim of the accident.