An Intercreditor Deed is a binding agreement between two or more creditors involved in financing a property development project. Common in UK property development finance structures, it clarifies each lender’s rights, security ranking, enforcement rights, and repayment priority. Typically negotiated between senior lenders, mezzanine lenders, and sometimes equity investors, this document ensures coordination during defaults, restructuring, or insolvency. Its presence is often required to secure layered financing and mitigate inter-lender risk in complex capital stacks.
In practice, an Intercreditor Deed functions as a critical Contractual Agreement governing how multiple funding parties interact throughout a development lifecycle. It establishes clear procedures for information sharing, consent rights, payment waterfalls, standstill periods, and enforcement actions, helping to avoid disputes when project performance deteriorates or refinancing becomes necessary. For developers using layered Debt facilities, the deed provides lenders with certainty over their respective positions while preserving an agreed framework for decision-making. This can be particularly important where senior and subordinate lenders hold different security interests, risk profiles, and commercial objectives within the same transaction.
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