Head 26: 3 Flashcards
(20 cards)
What is redemption?
s 18
This is the right to pay off the loan early. Sometimes this is contracted out of.
What is discharge?
s 17
This is the deed of extinction of the standard security.
What is restriction?
s 15
A deed of restriction limits the land to which the security applies. e.g. A builder has granted a standard security over a development and then sells off a plot. The lender will be willing to discharge the security for the first plot in return for some of the purchase price, but will want to keep the security intact for the rest of the land. So a restriction limits the territorial scope of a standard security to certain land.
What are charging orders?
Charging orders may be imposed on your properties - typically by local authorities (e.g. often on tenements). If the local authority has served a statutory notice for repairs and the owners don’t repair and the authority gets the repair done then they will register a charging order and that is in effect a security over the tenement or other property for the cost of the work. It means that you can’t sell your flat until you pay.
For constructive delivery in pledge there must be…
Intimation to the custodian (Inglis v Robertson & Baxter 1897)
NB intimation is not necessary in relation to bills of lading.
Consumer Credit Act 1974
This covers pledges where the debtor is an individual (pawnbroking)
Can a pledgee sell?
In principle, no - you need court authority to sell.
However there are two important exceptions:
⁃ 1) The contract may provide for a power of sale.
⁃ 2) Licensed pawnbrokers have a statutory power of sale [don’t need to know the provision]
Can a lien holder sell?
The creditor needs permission from court to sell, unless agreed in the contract.
Can there be a lien over land?
The conventionl view is that lien is only over corporeal moveables. However there are some cases over land - in principle there is no reason why you couldn’t.
McGraddie v McGraddie [2010]
Comment in this case that you couldn’t have a lien over land.
Wilmington Trust Co v Rolls Royce plc [2011]
Court there was a dictum stating that you can have a lien over land. (Apparently this judge had read Andrew Steven’s book).
What are examples of express hypothecs?
1) Ship mortgage registered under Merchant Shipping Act 1995.
2) Aircraft mortgage registered under Civil Aviation Act 1982 and Mortgaging of Aircraft Order 1972.
Current legislation on floating charges?
Companies Act 1985 and the Insolvency Act 1986 (not so important for property)
Who can grant a floating charge?
Certain corporate debtors only (companies, LLPs).
When are floating charges created?
s 859E - floating charges are created on delivery but…
⁃ [You have 21 days following delivery of the charge document from the debtor to the creditor to register in the Charges Register (part of the Companies Register) During these 21 days the charge is valid but it is not publicly available.]
How long have must you register floating charges in?
21 days in the Charges Register (Companies Act 2006 s 859A)
What is a floating charge?
A floating charge floats over the “Whole property and undertaking” i.e. whole patrimony of company. Covers all assets whether real or personal moveable or immoveable, corporeal or incorporeal.
When do floating charges attach?
Attachment (crystallisation) by either
⁃ (1) liquidation or
⁃ (2) receivership.
But nb Enterprise Act 2002 ss 248-255 greatly limit the power of floating charge holders to appoint receivers for charges created since 15 September 2003, as well as abolishing the preference of the Crown for tax.
What is the effect of attachment of floating charges?
Attachment makes charge equivalent to “fixed security” i.e. real. When acquiring charged assets, no discharge needed provided that charge unattached.
Most securities granted by companies must be…
Most securities granted by companies must be registered within 21 days in Charges Register: Companies Act 2006 s 859A.
This INCLUDES STANDARD SECURITIES (SO THEY MUST BE REGISTERED TWICE)
