Free UK Collateral Warranty Deed Template

COLLATERAL WARRANTY DEED

Contractor To Funder  ·  Executed As A Deed  ·  England And Wales  ·  2026-09-15

This Collateral Warranty Deed (this "Deed") is made on 2026-09-15 between Hartwell Construction Group Ltd (Companies House No. 07543219) of 200 Aldersgate Street, London, EC1A 4HD (the "Warrantor"), Northern Securities Investment Bank plc (Companies House No. 02134567) of 50 Bishopsgate, London, EC2N 4AJ (the "Beneficiary"), and Riverside Quarter Developments Ltd (Companies House No. 09876543) of 15 Berkeley Street, Mayfair, London, W1J 8DY (the "Employer"). The Employer has engaged the Warrantor under a JCT building contract dated 2026-08-01 in the principal value of £48,500,000 (the "Underlying Contract") to design and/or construct works at Riverside Quarter Phase 2 (the "Project"). The Beneficiary has a legitimate interest in the Project and seeks this Deed to obtain direct enforcement rights against the Warrantor. This Deed is executed under section 1 of the Law of Property (Miscellaneous Provisions) Act 1989 (individuals) and section 46 of the Companies Act 2006 (companies), taking advantage of the twelve-year limitation period in section 8 of the Limitation Act 1980.

1.1 The Project. The Project comprises works at the following premises:

Lot 4, Riverside Quarter, Wandsworth, London, SW18 1RX

described as follows:

Construction of a 12-storey mixed-use building comprising 84 residential apartments (mix of 1-bed, 2-bed and 3-bed), 1,200 sqm of Grade A office accommodation on floors 1-3, ground-floor retail and a basement car park with 96 spaces. Concrete frame with curtain-wall envelope; engineered to BS 8233 and EN 1090 standards; Aluminium curtain wall to PassivHaus equivalent thermal performance. Practical Completion targeted Q4 2027.

1.2 The Underlying Contract. Under the Underlying Contract, the Warrantor has agreed to perform the Services (the "Services") for the Employer with respect to the Project. The Services include those activities expressly identified in the Underlying Contract and any reasonably ancillary activities.

1.3 Practical Completion target. The Project is targeted to achieve Practical Completion (as defined in the Underlying Contract) on or before 2027-10-31.

1.4 No variation. Nothing in this Deed shall vary, supersede or otherwise affect the Underlying Contract as between the Warrantor and the Employer (save where this Deed expressly so provides). The terms of the Underlying Contract remain binding as between the Warrantor and the Employer.

2.1 Defective Premises Act 1972. The parties acknowledge that the Project includes dwellings or residential elements for the purposes of the Defective Premises Act 1972. The Warrantor's duties under section 1 of that Act (to take on work for or in connection with the provision of dwellings such that the dwelling will be fit for habitation when completed) shall apply, and shall not be excluded or limited by this Deed.

2.2 Building Safety Act 2022 Part 5. The parties acknowledge that the Project is a "higher-risk building" within the meaning of the Building Safety Act 2022 (Part 5 in force 28 June 2022). The Warrantor acknowledges the extended liability regime arising from section 135 of that Act (modifying section 1 of the Defective Premises Act 1972) — applying a 30-year retrospective limitation period for past defects and a 15-year prospective limitation period for future works, and the additional duties under sections 149 and following of that Act for higher-risk buildings.

3.1 Reasonable skill and care. The Warrantor warrants to the Beneficiary that the Warrantor has exercised, and will continue to exercise, all the reasonable skill, care and diligence to be expected of a competent and experienced contractor in the performance of the Services. This is the Bolam standard — performance to a standard reasonably expected of a competent practitioner in the relevant discipline.

3.2 Materials. The Warrantor warrants that all materials, goods and equipment used or specified by the Warrantor in or for the Project shall be: (a) of good and proper quality, free from defects; (b) suitable for the use intended and the conditions in which they are used; (c) compliant with applicable British, European and ISO standards; and (d) shall not include any prohibited materials. Prohibited materials includes (without limitation): asbestos in any form; ACM (high-pressure laminate cladding with combustible core); lead pipework; high-alumina cement; calcium chloride; aggregates from materials prone to ASR or sulphide weathering; treated timber containing pentachlorophenol; reinforcement steel of unknown provenance; any material or product identified by the UK government or HSE as prohibited or restricted in construction; and any combustible cladding products restricted by the Building (Amendment) Regulations 2018 or the regime in the Building Safety Act 2022.

3.3 Workmanship. The Warrantor warrants that workmanship in the performance of the Services shall be of a quality reasonably to be expected of a competent and experienced contractor performing the same Services on a like project.

3.4 Warranty period. The Warrantor's warranty under this Deed extends for 15 years from the date of Practical Completion of the Project (or the relevant section thereof). This is consistent with the 12-year limitation period for deeds under section 8 of the Limitation Act 1980 and the 15-year prospective period under the Building Safety Act 2022 Part 5 (BSA 2022 s.135 modification of Defective Premises Act 1972).

4.1 Net contribution. Notwithstanding any other provision of this Deed, the Warrantor's liability to the Beneficiary for any loss or damage shall be limited to that proportion of the loss or damage which is just and equitable having regard to the extent of the Warrantor's responsibility, and assuming that each of the following persons has paid to the Beneficiary the proportion that would be just and equitable having regard to their respective responsibility — namely: (a) the Employer; (b) every other consultant engaged for the Project; (c) every contractor and sub-contractor engaged in connection with the Project; (d) the Project structural engineer, MandE consultant, fire safety engineer and any specialist sub-contractor for cladding works. This clause is in line with the principles in West Wallasey Auto Hire Ltd v Wirral Borough Council [2014] EWHC.

4.2 Equivalent right of defence (qualified). The Warrantor shall have, against any claim or proceedings brought by the Beneficiary, the same rights of defence (including, without limitation, contractual exclusions and limitations, time bars, set-off, contribution and counterclaim) that the Warrantor would have had if the claim had been brought by the Employer under the Underlying Contract, EXCEPT that the Warrantor may NOT raise: (a) any allegation that the Employer has accepted the Services in their defective state; (b) the Employer's insolvency or default in payment to the Warrantor; or (c) any waiver or compromise of liability that the Employer has granted post-Practical Completion without the Beneficiary's consent.

5.1 Step-In Rights (Funder). Where the Employer commits a material default under the Underlying Contract or under any finance document with the Funder, or where the Employer becomes the subject of an Insolvency Event, the Funder may by written notice to the Warrantor exercise the following Step-In Rights:
(a) require the Warrantor, on receipt of the Funder's written notice (with copy to the Employer), to continue performance of the Services as if engaged directly by the Funder under the same terms as the Underlying Contract (mutatis mutandis); the Funder shall pay the Warrantor for ongoing performance from the date of the Step-In Notice;
(b) require the Warrantor to take such steps as the Funder may reasonably request to procure the appointment of a substitute Employer (the Funder may nominate the substitute);
(c) assume liability for accrued but unpaid Warrantor fees under the Underlying Contract, capped at the amount the Funder reasonably determines was outstanding at the date of the Step-In Notice.

Before exercising Step-In, the Funder shall serve at least 21 days written notice on the Warrantor of its intention to step in, allowing the Warrantor to consult with the Employer about cure during the notice period. The Warrantor shall not be required to step in if the Funder fails to give the Warrantor at least 28 days from notice within which to be paid accrued sums.

5.2 Assignment. The benefit of this Deed may be assigned by the Beneficiary, without the Warrantor's consent, on no more than two (2) occasions. The Beneficiary shall give the Warrantor written notice of each assignment within fourteen (14) days. Further assignments require the Warrantor's prior written consent (not to be unreasonably withheld). This 2-assignment limit is in line with UK commercial property market practice (cf. Hurst v Leeming [2002] EWHC 1051).

6.1 PI Insurance. The Warrantor shall, during the period from the date of this Deed to the expiry of the warranty period under clause 3.4 (and any Step-In Period), maintain professional indemnity insurance with a reputable insurer of good standing for a limit of indemnity of at least £25 million each and every claim in respect of any claim arising in connection with the Project.

6.2 Runoff. The Warrantor shall maintain such insurance, or runoff cover on substantially equivalent terms, for a period of at least 15 years after Practical Completion of the Project (this period being aligned with the warranty period plus a buffer for late-discovered defects).

6.3 Cancellation notification. If the Warrantor's professional indemnity insurance is cancelled, lapses, or is renewed on materially different terms (including any reduction in cover, increase in deductible, or restriction in scope of insured activities), the Warrantor shall promptly notify the Beneficiary in writing.

6.4 Evidence. The Warrantor shall, on the Beneficiary's reasonable request from time to time, provide written evidence of subsisting insurance cover meeting clauses 6.1-6.3 (subject to the insurer's confidentiality requirements).

7.1 Building Safety Act 2022 Part 5 — explicit acknowledgement. The parties acknowledge that the Project is, or is likely to be, a higher-risk building within the meaning of the Building Safety Act 2022. The Warrantor confirms that it has implemented (and will continue to implement) the additional duties under Part 5 of the Act applicable to its role (whether as Principal Contractor, Principal Designer, Accountable Person or otherwise), and that the warranty in clause 3 extends to a period not less than 15 years from Practical Completion, in alignment with section 135 of that Act (modification of Defective Premises Act 1972 limitation periods for future works). The parties further acknowledge the 30-year retrospective limitation period created by section 135 for past defects in residential premises.

7.2 Defective Premises Act 1972 carve-out. Nothing in this Deed shall exclude, restrict or otherwise affect the Warrantor's statutory duties under sections 1 and 2 of the Defective Premises Act 1972 in relation to dwellings, and any limitation or exclusion of liability under this Deed shall not apply to claims based on breach of those statutory duties.

7.3 Concurrent liability acknowledgement. The parties acknowledge that the Warrantor may also owe duties to the Beneficiary in tort independent of this Deed (per Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 and Robinson v PE Jones (Contractors) Ltd [2011] EWCA Civ 9). The contractual rights under this Deed do not exclude any concurrent rights the Beneficiary may have in tort.

7.4 No greater liability than under Underlying Contract. Save in relation to the specific obligations expressly assumed in this Deed (which may be greater than those in the Underlying Contract), the Warrantor shall not be subject to any greater liability under this Deed than would have been the case if the Beneficiary had been a party to the Underlying Contract instead of a beneficiary of this Deed.

This Deed and any dispute or claim (including non-contractual disputes) arising out of or in connection with it shall be governed by and construed in accordance with the laws of England and Wales. The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales.

This Deed has been executed and delivered as a deed on the date written at the head of it.

Warrantor execution. Signed as a deed by two directors.
Beneficiary execution. Signed as a deed by two directors.
Employer acknowledgement. The Employer acknowledges this Deed and confirms that nothing in it varies the Underlying Contract.

Each party intends to deliver this Deed on the date first written above and acknowledges that delivery shall be deemed to have occurred on that date. The Beneficiary's rights under this Deed shall not be affected by any waiver, release or compromise of liability granted by the Employer to the Warrantor under the Underlying Contract after the date of this Deed (save where this Deed expressly so provides).

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.