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Development Funding Agreement Template for New Zealand

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Key Requirements PROMPT example:

Development Funding Agreement

"I need a Development Funding Agreement for a NZD 25 million mixed-use development project in Auckland, with staged drawdowns aligned to construction milestones and completion targeted for March 2025, including specific provisions for retail pre-sales requirements."

Document background
The Development Funding Agreement serves as the primary document governing the relationship between funders and developers in New Zealand property development projects. It is typically used when a developer requires substantial funding for a property development project and a funder (usually a financial institution) agrees to provide staged funding subject to specific conditions and milestones. The agreement encompasses crucial elements including funding mechanisms, security arrangements, development timelines, and risk management protocols, all structured within the New Zealand legal framework. This document is essential for projects requiring external funding and must comply with various New Zealand regulations including the Financial Markets Conduct Act 2013, Property Law Act 2007, and Construction Contracts Act 2002. The agreement's structure allows for flexibility in addressing various development types while maintaining robust protection for all parties involved.
Suggested Sections

1. Parties: Identifies and defines all parties to the agreement, including the funder, developer, and any guarantors

2. Background: Sets out the context of the agreement, including the project overview and parties' intentions

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. Funding Commitment: Details the total funding amount, funding tranches, and conditions for drawdown

5. Conditions Precedent: Specifies conditions that must be satisfied before funding becomes available

6. Drawdown Mechanics: Outlines the process and requirements for accessing the funding

7. Project Milestones: Defines key development milestones and their relationship to funding releases

8. Developer Obligations: Sets out the developer's commitments, responsibilities, and ongoing obligations

9. Representations and Warranties: Contains standard and specific warranties from all parties

10. Security Arrangements: Details the security package and ranking of securities

11. Reporting Requirements: Specifies ongoing reporting obligations and information requirements

12. Events of Default: Lists circumstances constituting default and corresponding remedies

13. Termination: Outlines termination rights and consequences

14. General Provisions: Contains standard boilerplate clauses including notices, amendments, and governing law

Optional Sections

1. Cost Overrun Provisions: Required when the developer needs to address potential cost overruns and funding solutions

2. Pre-sales Requirements: Necessary when funding is conditional on achieving specific pre-sales targets

3. Interest and Fees: Required when the funding arrangement includes interest payments or specific fee structures

4. Guarantees: Needed when personal or corporate guarantees are part of the security package

5. Environmental Obligations: Required for projects with significant environmental considerations or requirements

6. Joint Venture Provisions: Necessary when the development involves joint venture arrangements

7. Property Management: Required when the agreement includes ongoing property management obligations

8. Development Management: Needed when specific development management arrangements are required

9. Insurance Requirements: Detailed insurance provisions beyond standard requirements

10. Dispute Resolution: Specific dispute resolution procedures beyond standard provisions

Suggested Schedules

1. Project Details: Detailed description of the development project, including plans and specifications

2. Development Program: Detailed timeline of development activities and milestones

3. Budget and Costings: Detailed project budget, including cost breakdowns and contingencies

4. Drawdown Schedule: Detailed schedule of funding tranches and associated conditions

5. Form of Drawdown Notice: Template for drawdown requests and supporting documentation

6. Security Documents: Forms of security documents and priority arrangements

7. Reporting Templates: Standard templates for required project reports

8. Property Details: Legal description and details of the development property

9. Required Insurances: Detailed schedule of required insurance coverage

10. Key Personnel: Details of key project personnel and their responsibilities

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




























































Clauses































Relevant Industries

Real Estate Development

Commercial Property

Residential Property

Construction

Banking and Finance

Infrastructure Development

Mixed-use Development

Urban Regeneration

Industrial Development

Retirement Village Development

Relevant Teams

Legal

Finance

Development

Project Management

Risk and Compliance

Treasury

Property

Commercial

Construction

Investment

Relevant Roles

Chief Financial Officer

Development Director

Project Manager

Legal Counsel

Finance Manager

Property Developer

Construction Manager

Risk Manager

Investment Manager

Development Manager

Commercial Director

Funding Manager

Treasury Manager

Property Manager

Compliance Officer

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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