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Real Estate Subordination Agreement Template for Switzerland

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Key Requirements PROMPT example:

Real Estate Subordination Agreement

"I need a Real Estate Subordination Agreement for a commercial property in Zurich, where a second mortgage of CHF 2 million needs to be subordinated to a new senior loan of CHF 5 million, with completion targeted for March 2025."

Document background
A Real Estate Subordination Agreement is a crucial document in Swiss real estate financing transactions where multiple creditors hold security interests in the same property. This agreement is typically used when a property has multiple mortgages or when refinancing arrangements require reorganization of existing security priorities. The document must comply with Swiss legal requirements, particularly the Swiss Civil Code and cantonal regulations regarding real estate transactions. It details the specific terms under which junior creditors agree to subordinate their security interests to those of senior creditors, ensuring clear priority ranking in case of enforcement. The agreement includes comprehensive information about the property, existing securities, and registration requirements with the Land Registry (Grundbuch). It's particularly important in development projects, refinancing situations, or when new security is being created over property with existing encumbrances.
Suggested Sections

1. Parties: Identification of all parties including the senior creditor, subordinated creditor, and property owner

2. Background: Context of the agreement including details of existing securities and reason for subordination

3. Definitions: Definitions of key terms used throughout the agreement, including property, securities, and relevant dates

4. Property Details: Specific description of the real estate property subject to the agreement, including land registry details

5. Existing Securities: Description of all existing mortgages, liens, and other securities affecting the property

6. Subordination Terms: Specific terms of the subordination, including ranking of securities and extent of subordination

7. Representations and Warranties: Statements of fact and guarantees by the parties regarding their authority and the status of their securities

8. Registration and Notices: Requirements for registration with the Land Registry and notification obligations

9. Governing Law and Jurisdiction: Confirmation of Swiss law application and jurisdiction for disputes

10. Execution: Formal execution requirements and signature blocks

Optional Sections

1. Multiple Properties Clause: Required when the subordination agreement covers multiple properties

2. Inter-creditor Provisions: Needed when there are multiple creditors requiring specific arrangements between them

3. Conditional Subordination: Used when the subordination is subject to specific conditions or triggers

4. Duration and Termination: Required when the subordination is temporary or subject to specific termination events

5. Currency Provisions: Needed when dealing with securities in different currencies

6. Assignment and Transfer: Required when parties need specific rights to assign or transfer their interests

7. Further Assurance: Optional clause requiring parties to take additional actions to give effect to the agreement

Suggested Schedules

1. Property Description Schedule: Detailed legal description of the property including land registry excerpts

2. Existing Securities Schedule: Details of all existing mortgages, liens and their registration numbers

3. Form of Notice: Template for any required notices to the Land Registry or other parties

4. Powers of Attorney: If applicable, copies of powers of attorney for signing parties

5. Lender Consents: Copies of any required consents from existing lenders

6. Property Plans: Official property plans and surveys if relevant

7. Land Registry Forms: Required forms for registration of the subordination

Authors

Alex Denne

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

Relevant legal definitions
























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Relevant Industries

Banking & Finance

Real Estate

Commercial Property

Residential Property

Property Development

Construction

Legal Services

Investment Management

Property Management

Relevant Teams

Legal

Real Estate

Credit Risk

Compliance

Property Management

Investment Management

Transaction Management

Securities Administration

Corporate Finance

Relevant Roles

Real Estate Lawyer

Banking Lawyer

Property Manager

Real Estate Finance Manager

Mortgage Officer

Credit Risk Manager

Real Estate Investment Manager

Legal Counsel

Compliance Officer

Property Developer

Real Estate Transaction Manager

Senior Loan Officer

Real Estate Portfolio Manager

Industries







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