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Construction Loan Agreement
"I need a Sharia-compliant Construction Loan Agreement for a AED 50 million commercial development project in Dubai, with drawdown schedule beginning March 2025 and including provisions for multiple contractors and Islamic banking requirements."
1. Parties: Identification of the lender, borrower, and any guarantors
2. Background: Context of the construction project and purpose of the loan
3. Definitions and Interpretation: Definitions of key terms and interpretation rules
4. Facility Amount and Purpose: Details of the loan amount and specified use for construction
5. Conditions Precedent: Prerequisites for loan disbursement including required permits and documentation
6. Disbursement Procedures: Process and conditions for drawing down the loan in construction phases
7. Interest and Fees: Interest calculation, payment terms, and associated fees
8. Repayment Terms: Schedule and mechanisms for loan repayment
9. Security and Collateral: Details of security arrangements and mortgage requirements
10. Construction Requirements: Specifications for construction progress, quality, and timeline
11. Representations and Warranties: Standard declarations by the borrower about their status and project
12. Covenants: Ongoing obligations of the borrower during construction and loan period
13. Monitoring and Inspection Rights: Lender's rights to monitor construction progress and financial status
14. Events of Default: Circumstances constituting default and consequential actions
15. Remedies: Lender's rights and remedies upon default
16. General Provisions: Standard legal provisions including notices, amendments, and governing law
1. Islamic Finance Provisions: Required if the loan needs to be Sharia-compliant
2. Contractor Direct Agreement: Used when direct agreements with main contractors are required
3. Insurance Requirements: Detailed section if specific insurance arrangements are needed beyond standard requirements
4. Environmental Compliance: Required for projects with significant environmental impact
5. Multiple Currency Provisions: Included if the loan involves multiple currencies
6. Step-In Rights: Required if lender needs right to take over project management in specific circumstances
7. Syndication Provisions: Included if the loan may be syndicated to multiple lenders
1. Schedule 1 - Project Details: Detailed description of the construction project and specifications
2. Schedule 2 - Disbursement Schedule: Detailed timeline and conditions for loan disbursements
3. Schedule 3 - Form of Drawdown Notice: Template for requesting loan disbursements
4. Schedule 4 - Construction Timeline: Detailed construction milestones and completion dates
5. Schedule 5 - Security Documents: List and copies of all security documents
6. Schedule 6 - Required Permits: List of required governmental and regulatory approvals
7. Schedule 7 - Form of Progress Report: Template for construction progress reporting
8. Schedule 8 - Interest and Fee Calculations: Detailed breakdown of interest and fee calculations
9. Appendix A - Property Documents: Title documents and property specifications
10. Appendix B - Construction Plans: Approved architectural and engineering plans
11. Appendix C - Cost Schedule: Detailed breakdown of construction costs and budget
Authors
Banking & Financial Services
Real Estate Development
Construction & Engineering
Infrastructure Development
Commercial Property
Residential Property Development
Industrial Development
Hospitality & Tourism
Healthcare Facilities
Education Facilities
Islamic Banking
Legal
Finance
Construction
Risk & Compliance
Project Management
Real Estate
Islamic Banking
Credit
Technical Services
Property Development
Contract Administration
Chief Financial Officer
Finance Director
Construction Finance Manager
Project Finance Manager
Legal Counsel
Construction Manager
Development Director
Risk Manager
Compliance Officer
Islamic Banking Specialist
Project Director
Construction Loan Officer
Real Estate Finance Manager
Senior Banker
Property Development Manager
Technical Director
Contract Manager
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