What is a PANTHEON Property Deposit Bond?
A Property Deposit Bond is used by the Purchaser as an alternative to paying the Vendor a 10% cash deposit under a property Sales & Purchase Agreement. The PANTHEON Bond undertakes to pay a specific sum to the Vendor at the time of settlement (ie completion) in the event that the Purchaser defaults on its payment obligations under the Sales & Purchase contract
How much does it cost?
Premium is based on the amount and term of the bond, but is typically around 5% pa of the deposit
Who can apply?
Private buyers of residential homes, private buyers of investment properties and larger corporate property investors can all apply for deposit bonds – application and acceptance is subject to qualifying criteria
Who benefits from the PANTHEON bond?
Both the Purchaser and the Vendor benefit from avoiding the requirement for a cash deposit. Purchaser is able to keep investments earning and avoid the expense of bridging finance. A PANTHEON Bond can also protect the Purchaser against the possibility of losing the cash deposit in the hopefully unlikely event of the builder / developer going into insolvency before completion of the property – in that the Bond cannot be claimed upon unless the property has been completed and then only as a result of the Purchaser’s failure to complete the purchase contract.
The Vendor can sell more homes more easily. The Property Deposit Bonds provides the Vendor with confidence that if the Purchaser will does not complete the purchase the Vendor can call for payment under the PANTHEON Bond.
Do Property Vendors accept Bonds instead of cash deposits?
Property Deposit Bonds are relatively new to the UK market but are a fully accepted and established method of selling property in a number of countries including Australia, New Zealand and the USA. The acceptance of a PANTHEON Bond as an alternative to a cash deposit is becoming an increasing common method of purchasing property off the plans. If however, your Vendor or your Vendor’s Solicitor is not fully familiar with the benefits of a PANTHEON Bond, we would be delighted to acquaint them of the features of the product.
What if I can’t complete the purchase?
If the purchase is not completed because of the default of the Purchaser, then the Bond will be called up by the Vendor, and paid by the Insurer. The Insurer will then take steps to recover this money from the defaulting Purchaser. This is done by the Insurer making demand on the Purchaser for reimbursement of the amount paid to the Vendor - plus any costs incurred arise directly from the Purchaser’s default. This undertaking by the Purchaser to indemnify the Insurer is set out in the Indemnity that the Purchaser is required to sign in favour of the Insurer when taking out the Bond.
How do I apply for a Pantheon Property Deposit Bond?
The PANTHEON Bond application process consists of two stages:
Stage 1: Make application for a PANTHEON Bond – complete and submit the online application form along with the appropriate application fee (online credit card payment option available). You will be notified of a decision within 24 hours or the next business day. Your application will be checked to ensure it meets PANTHEON credit approval. If approved, you will receive an approval number and a conditional offer outlining the terms of the approval, a formal premium quote and the documentation required to be completed should you decide to accept the offer and go-ahead with the purchase of the PANTHEON Bond. The approval offer will be valid for up to 30 days.
Stage 2: Accept the offer and Purchase the PANTHEON Bond – Should you wish to accept the offer, then simply complete the required documentation as set out in your approval offer, and send with the appropriate premium to PANTHEON BOND. The bond will be sent to you or your conveyancing agent – depending upon your wish.
What if I want to buy more than one property and have a property bond for each one?
No problem. If you are buying more than one property in the same development, you should submit an on-line application for the highest value property you are purchasing, ensure you select ‘Multiple Purchases’ and we will contact you to obtain details of the additional properties
If the other property is at another development, an additional application (coupled with an additional application fee) will have to be made.
If you wish to buy more properties in the future using a PANTHEON Bond, then providing you still meet the credit criteria, then future bonds will be approved.
If you are a Corporate property owner with multiple purchase requirements to add to your portfolio, then please contact us directly to discuss your requirements. Multiple bonds can be arranged on special terms subject to meeting financial and total risk aggregation criteria.
Who is the issuer of the PANTHEON BOND?
Pantheon Bond Limited is a UK company with specialist expertise in the UK property development and construction industry and is an appointed representative of First Title Insurance Brokers Limited which is authorised and regulated by the Financial Services Authority. First Title Insurance Brokers Limited is part of the First Title group which is a wholly owned subsidiary of the First American Corporation.
The issuer of the PANTHEON Bond is GRAMERCY INSURANCE COMPANY of Texas USA. Gramercy is a specialist credit and financial risk insurer and provides credit risk protection to a number of Government entities, banks and financial institutions. It has a rating of B+ (positive) AM Best.
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