Notably, the bank in question wasn't bothered by restrictions on the property when granting the business loan. Nor did the bank ever have to find out.

Thing is, under law you are not allowed to falsify information on financial disclosures like this, regardless of whether the counterparty is OK with it or not. It may be that the state considers the integrity of the financial system a higher priority than individual deals, or it may be designed to prevent money laundering - more likely the latter, as there are a lot of ways to clean dirty money if everyone involved is willing to accept some imaginary claims as fact.