Professional Legal Advice for Deed of Subordination
- Expert-backed legal advice for a deed of subordination
- Discreet, private and completely online for a streamlined experience
- Fast turnaround times, with same-day ILA available for a deed of subordination
- Gain an in-depth understanding of how a deed of subordination works, including risks and liabilities.
- Lender-compliant advice you can trust
- ILA certificate confirming informed consent to protect you against claims of undue influence or coercion.
What Is a Deed of Subordination and Why Is Legal Advice Required?
What is a deed of subordination, and how does it work? If a legal expert had to explain the deed of subordination, this is how it would go. Simply put, a deed of subordination is a legal document that places one lender’s claim behind another, prioritising the primary lender in getting repaid if the borrower defaults. This agreement is required when multiple lenders are involved in a loan, particularly where directors, shareholders, family members or connected parties have provided loans alongside institutional lenders.
Given the potential impact on your rights, lenders require you to get independent legal advice (ILA) to ensure that you understand what you’re agreeing to and how it could affect your ability to recover funds.
It’s a significant decision that can impact your rights and recovery in the event of financial difficulties.
That’s where iLA comes in to help. ILA helps you understand the implications of signing a deed of subordination, including the risks, repayment hierarchy and impact on your rights as a creditor.. This includes the impact on your legal rights and obligations, ensuring that decisions are free of undue influence and helping reduce the risk of future disputes.
When Do Lenders Require Legal Advice for a Deed of Subordination?
Lenders require legal advice for a deed of subordination when a company director, shareholders, connected parties or family member acts as a junior creditor. Here, the primary purpose of independent legal advice is to ensure that the junior creditor fully understands the agreement and is not acting under pressure, coercion or undue influence.
Besides helping individuals understand how a deed of subordination works, ILA is also insightful in specific instances. For example, legal advice on a deed of subordination can be useful when intercompany loans are being restructured as part of new financing facilities.
Other instances include situations in which a parent or spouse has provided a loan, and the senior lender considers it a secondary claim. It’s also helpful when directors have provided a loan to their own company, and another bank lender mandates that bank loans be cleared first. Here, the director’s loan repayment becomes secondary, thus subordinating their debt.
Ila provide clear,
jargon-free
guidance
If you’re acting as a junior creditor, you risk losing your ability to recover your loan without professional legal advice for a deed of subordination.
Understanding what a deed of subordination is involves clarity on how it affects your financial and legal obligations and the key risks it entails.
Some of these risks include the following:
Enforcement restrictions: Waiving your rights to sue the borrower leaves you with little to no legal recourse when a senior debt exists. ILA for a deed of subordination helps with a detailed review of high-risk clauses like these to protect your interests.
Turnover clauses: If you receive a payment from a borrower in violation of the deed of subordination, you’ll be expected to hold onto that money and turn it over to the senior lender. Legal advice for a deed of subordination will identify hidden liabilities like this.
Deep subordination: Some subordination deeds contain clauses that bar junior creditors from receiving any payments, whether principal or interest. This is in place until and unless the senior lender is paid.
The repayment timeline is extended: Junior creditors can expect lockout periods to be longer than anticipated if senior loans are refinanced or extended. In such cases, ILA for a deed of subordination helps you understand your risk exposure and debt liability when the timeline is extended and clarifies the repayment hierarchy.
Our role is to ensure you’re fully aware of:
Your ranking and recovery:
We’ll explain how this deed affects your priority in getting repaid and what that means in practice.
The risks of subordination:
Understand the potential outcomes if the borrower defaults and how this agreement could impact your rights.
Your options:
We’ll explore whether there are alternative terms you could negotiate to better protect your interests.
Protecting your position:
We’ll guide you on any steps you can take to minimise risk before signing.
Before you sign, make sure you fully understand the risks and implications.
How it works
1
Book your appointment
2
Get ready for your appointment
3
Get your legal advice
4
Sign and complete
Transparent, Fixed Fee Legal Advice
We believe in clear, fixed pricing so that you don’t have to worry about any hidden fees or charges. Our pricing is based on urgency so that you have the flexibility to choose a pricing plan based on your requirements.
Our fee plans are structured as Diamond, Gold, Silver and Bronze.
You can learn more here.
Why Choose
?
Here’s why clients trust us with their deed of subordination advice:
Expertise in subordinations:
We specialise in ILA and know the risks and nuances of these agreements.
Fast, flexible appointments:
We’re available every day, so you can get advice when you need it, without delays.
Fully online service:
Everything is handled online, so you can get the guidance you need without interrupting your schedule.
Transparent pricing:
Fixed fees mean no surprises—just clear, straightforward advice. Visit our pricing page to find out more.
At ILA, we provide expert legal advice for a deed of subordination to help you make an informed decision. Our team of award-winning solicitors can deliver professional expertise quickly while maintaining privacy and adhering to the highest standards.
Book Your Consultation or Call Today
It’s important to understand what a deed of subordination is before you commit, as extended timelines, deep subordination and high-risk clauses can impact your ability to recover your money.
At iLA we provide practical legal advice for a deed of subordination, which includes giving you clarity on how a deed of subordination works, its legal and financial implications, and what you can do to protect your interests.
We’re regulated by the Solicitors Regulation Authority (SRA), have a 5-star rating on Trustpilot and were awarded the Best Specialist Finance Partner in 2024 by the Bridging & Commercial Awards. Our co-founder, Anastasia Ttofis, has been consistently featured in leading legal publications and continues to make a difference with ILA.
We’re here to assist you 7 days a week from 8 am to 8 pm. Call us on 020 4571 9207 today. Alternatively, if you have any questions about getting a deed of subordination legal advice, email us at ask@ila.co.uk
