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Lender dispute? Four ways to keep the money flowing

Lender Dispute | Eve Mazzarella | Mazzarella LawLender Dispute

Eve Mazzarella a Paralegal at Mazzarella Law explains in a lender dispute a developer needs a steady flow of cash to ensure that you can meet deadlines and complete your project on time, on budget, and at an acceptable quality of construction. Yet, it can seem like a lot of this process is outside of your control. This is especially true when you end up having a dispute with a lender and the cashflow stops. This can cause issues with paying contractors and other laborers, which can lead to legal action and significant delays that are costly to you in both the short-term and the long-term.

So, what can you do to protect your project? Your best bet is to have a skilled legal advocate on your side who can help you ensure that the money keeps flowing so that you can see your project through to fruition. Here’s how an attorney like those at our firm can help you achieve that outcome:

  • Ensuring that you sign off on realistic loan agreements with sufficient draw requests: To best ensure that the money keeps flowing during the course of your project, you need to ensure that you’re signing off on a realistic and favorable loan agreement. If the draw requests seem too good to be true or the lender agrees to pay a lot of money up front, then you should be wary.
  • Negotiating with the lender when pay disputes arise: In some instances, such as when a lender wishes to engage in anticipatory repudiation, the lender sees something in the project that causes it concern. Therefore, the lender sees the risk of anticipatory repudiation as being less dangerous to it than proceeding with the project. Oftentimes, though, these fears can be alleviated through clear communication and detailed plans. Also, the lender may have clear policies that it wants followed that you may be straying from. An attorney who is experienced in this area of the law can help you analyze your lending agreement to ensure that you allay any fears that the lender may have and assist you in negotiating compromise with your lender.
  • Building a claim for breach of contract: On the front end of your lending agreement, you should have negotiated terms that were fair and favorable. If the lender then fails to abide by those terms, then you should start building a case for breach of contract. Oftentimes just presenting the evidence of breach and informing the lender of what you’ll be asking for if you pursue your claim is enough to get the lender back on track with your payouts. Of course, you’ll still need to be prepared to proceed with your claim if the lender still doesn’t follow through on its obligations.
  • Competently dealing with arbitration and mediation: A lot of times these lending agreements contain clauses that specify alternative dispute resolution methods that must be adhered to. This can include mediation or arbitration. If your agreement contains one of those clauses, then you need to know how to prepare to sit down at the negotiation table with your lender and make compelling arguments as to why the money needs to keep flowing for your project. You also need to know how to litigate your position. An attorney who is adept in this area of the law will know how to craft compelling negotiation and litigation strategies that position you for success.

Don’t leave your project on the line

Time is of the essence in a lender dispute. That’s why we think that it’s vitally important that you work closely with a skilled legal team like ours to try to find a quick resolution to the issues at hand. If you’d like to learn more about a custom-tailored approach that is best suited for addressing your lender dispute, then we encourage you to read more about our firm, our successes, and what we have to offer our clients.

Written by Eve Mazzarella – Paralegal