Building Loan Agreement for United Arab Emirates

Building Loan Agreement Template for United Arab Emirates

A Building Loan Agreement under UAE law is a comprehensive financing document that establishes the terms and conditions for providing construction financing. It encompasses detailed provisions for loan disbursement, construction milestones, security arrangements, and repayment terms, all structured to comply with UAE banking regulations and construction laws. The agreement includes specific requirements for UAE property registration, construction permits, and potential Sharia compliance considerations, making it suitable for construction projects within the UAE's unique legal and regulatory framework.

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What is a Building Loan Agreement?

The Building Loan Agreement is a crucial document used in the UAE construction and development sector when a developer or construction company requires financing for a building project. This agreement is specifically tailored to meet UAE legal requirements and banking regulations, including potential Sharia compliance considerations. It outlines the complete framework for the lending relationship, including loan amounts, disbursement schedules tied to construction milestones, security arrangements, and repayment terms. The document is essential for any significant construction project in the UAE where external financing is required, and it must comply with UAE Federal Law No. 5 of 1985 (Civil Code) and UAE Federal Law No. 14 of 2018 (Central Bank Law), among other relevant regulations.

What sections should be included in a Building Loan Agreement?

1. Parties: Identification of the lender and borrower with full legal details

2. Background: Context of the loan agreement, purpose of construction, and basic transaction structure

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Loan Facility: Details of the loan amount, purpose, and basic terms

5. Conditions Precedent: Prerequisites that must be satisfied before loan disbursement

6. Disbursement Procedures: Process and conditions for drawing down the loan funds

7. Interest and Fees: Interest calculation, payment terms, and associated fees

8. Repayment Terms: Schedule and methods of loan repayment

9. Security and Collateral: Details of security arrangements and collateral requirements

10. Construction Requirements: Specifications for construction progress and standards

11. Borrower Representations and Warranties: Statements of fact and assurances from the borrower

12. Borrower Covenants: Ongoing obligations of the borrower

13. Events of Default: Circumstances constituting default and consequences

14. Remedies: Lender's rights and remedies upon default

15. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction details

What sections are optional to include in a Building Loan Agreement?

1. Sharia Compliance: Required if the loan needs to be Sharia-compliant, detailing Islamic finance structure

2. Insurance: Detailed insurance requirements if not covered in covenants

3. Project Monitoring: Specific provisions for monitoring construction progress if required

4. Environmental Compliance: Environmental requirements and warranties if project has significant environmental impact

5. Force Majeure: Provisions for unforeseen circumstances affecting construction

6. Assignment and Transfer: Rights to assign or transfer the loan if permitted

7. Cost Overrun Provisions: Specific provisions for handling construction cost overruns

What schedules should be included in a Building Loan Agreement?

1. Schedule 1 - Property Details: Legal description of the construction property

2. Schedule 2 - Construction Plans: Approved construction plans and specifications

3. Schedule 3 - Disbursement Schedule: Detailed schedule of loan disbursements tied to construction milestones

4. Schedule 4 - Form of Drawdown Notice: Template for requesting loan disbursements

5. Schedule 5 - Security Documents: List and copies of all security documents

6. Schedule 6 - Construction Timeline: Detailed construction schedule and milestones

7. Schedule 7 - Required Permits: List of required construction and development permits

8. Appendix A - Interest Calculation Examples: Examples showing interest calculation methodology

9. Appendix B - Construction Quality Standards: Detailed construction quality requirements and standards

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Finance

Real Estate

Construction

Property Development

Infrastructure

Commercial Real Estate

Residential Development

Industrial Development

Hospitality

Retail Development

Relevant Teams

Legal

Finance

Construction

Project Management

Risk Management

Compliance

Property Development

Treasury

Credit

Real Estate

Relevant Roles

Chief Financial Officer

Finance Director

Construction Manager

Project Director

Legal Counsel

Risk Manager

Property Development Manager

Banking Relationship Manager

Construction Finance Manager

Real Estate Finance Manager

Compliance Officer

Project Finance Manager

Development Director

Treasury Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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