Secure Your Finance with Our Templates of Tri Party Agreement
If you’re looking for templates for tri party agreement, look no more, for you’re already in the right place. Our mission is to help people who are in need of a triparty agreement and don’t want to waste a lot of time writing one. Our templates are designed to be very customizable, to accommodate as many people as possible. Our templates are also free, anyone can download, edit, and print our templates whenever they want to.
Not only that, in this article we’re going to learn more about the agreement. The knowledge will certainly be useful in the future.
Tri-Party Agreement and Its Benefits
So, what is a tri party agreement? At the simplest form, it’s a business deal between three separate parties. For example, in the mortgage industry, a tri-party often takes place during the construction phase of a new home or even condominium complex, to finally secure the bridge loans for the construction itself. Bridge loan is a short-term loan used until an entity secures permanent financing or removes an existing debt or obligation.
The agreement itself is very important, as it can get rid of many securities and contingencies between the three parties in the event of default. Without the agreement the three parties would be in a lot of trouble.
The agreement become very necessary when money is being loaned for a property that has not yet been built or erected. The agreement gets rid of any conflict claims on the property should the borrower default or die during the construction.
The process is pretty simple, to make sure that the work is according to the schedule and the quality is up to the standard, the borrower would not want to pay the builder until work is done without problems. But the builder doesn’t want to risk working without getting the money, since they’re already owing money to subcontractors, such as plumbers and electricians. The solution is, the builder can claim a construction lien on the property, that is the right to forfeiture in the event they’re not getting paid. Meanwhile the bank also maintains a claim on the property if the borrower defaults on the loan.
So, the three parties involved are the borrower, the lender, and the builder. Anyway, to make it even easier, feel free to use our templates of tri party agreement below.