We assess risks and provide technical advice to those who provide third party finance on real estate developments; as a lender’s Independent Monitoring Surveyor (IMS). Other terms are also used for this role such as ‘Bank Monitor’ or ‘Project Monitoring Surveyor’.
The provision of external finance is a fundamental component of many real estate developments. Lenders will normally actively seek to identify, quantify and mitigate risks when advancing money to a borrower to support a development. This process should start well before the transaction takes place and can continue throughout the term of the debt facility. The lender will evaluate a borrower’s business plan to verify the assumptions and undertake a sensitivity analysis. They will also typically initiate a due diligence process involving external professional advisors. A surveyor properly articulating technical project risks and checking that such risks will be appropriately managed should be a pre-eminent focus for any lender’s technical due diligence. The IMS needs to understand the technical risks derived from the whole process of procurement, including the structure and delivery of a project and to provide advice to ensure that the lender’s decision is fully informed and risks are appropriately mitigated and managed from kick-off meeting through to lender’s exit.
The role of the IMS is not only to the benefit of those providing third party finance (the lender), but also to the benefit of the borrower, with the shared goal of delivering a successful project on time, on budget and as specified. The technical understanding of a project’s environment will assist in identifying project risks and thereby assist the borrower to formulate strategies to mitigate those risks.
We report upon financial and programme aspects of projects, design, construction and contract issues, including the need for collateral warranties, statutory compliance and consents, etc., in reports structured to ensure that each aspect of the scope of service is clearly addressed. Different lenders may have their own specific requirements for the structure of the report, sometimes with a template of how commercial aspects of the project should be laid out and the RICS produces guidance notes in this regard.
We have a breadth of experience which permits us to understand how and where project risks occur and develop throughout the life cycle of a project as it is conceived, structured, managed and delivered.
Our service is comprehensive, including draw down certification, monthly IMS site visits, lender’s progress reports, etc.
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PROPERTY & CONSTRUCTION services
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