Less pain, more gain

If figures quoted recently in the broadsheets are to be believed, circa £112bn of commercial property loans are due for renewal every year for the next three years, and it is anticipated that approximately 40% of these are under water in their debt to equity ratios. It seems likely, therefore, that 2010 is going to be a busy year for professionals involved in insolvency.

The process of selling distressed property assets is replete with challenges.Typically, receivers and administrators are expected to: preserve asset value (or better still enhance it); deliver maximum return; mitigate risk and meet all legal requirements; and complete everything as fast as possible. Added to these challenges are technical considerations such as the lack of title reps and warranties, which can seriously undermine the saleability and price of distressed properties. Similarly, a quick sale is usually important in retaining value. Any issues raised during due diligence will often lead to costly “price chip” negotiations.

Title insurance can cover