Step-in rights are contractual rights allowing a lender or senior funder to intervene and assume control of a property development project when a borrower or contractor defaults. These rights are typically embedded in development finance agreements, collateral warranties, or direct agreements with key project parties. They enable the lender to appoint new management, replace contractors, or directly manage the project to safeguard the loan’s security and ensure the project’s completion. Step-in rights are especially critical in UK property development finance to preserve value and reduce risk of financial loss or litigation during default or project failure
Step-in rights sit within Litigation, Disputes, and Enforcement, reflecting their role as a protective contractual remedy used when a borrower or contractor defaults under a development finance arrangement. In practice, they operate alongside mechanisms such as Enforcement of Security, giving lenders the ability to intervene early to preserve asset value and project continuity. Within the capital stack, they are most commonly associated with Infrastructure Loan positions where lenders require greater operational control. This ensures that underperformance or insolvency risk can be actively managed rather than left to formal enforcement routes alone, supporting completion and protecting loan recoveries in complex UK development scenarios.
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