The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:
There are situations where parties may consider amending security documents. Common examples include:
the parties want to make changes to the obligations being secured
the chargee wants to assign or novate its security following a transfer of the debt
the parties want to charge additional assets or change the nature of an existing charge (eg from a floating charge to a legal mortgage), and
the parties want to correct a mistake or document an amendment to what has been agreed
Parties may consider that amending a security document may be cheaper and easier than putting a new security document in place.
Depending on the type of amendment, there is a risk that a liquidator or administrator could argue that new security has been created risking the security being set aside (see Practice Note: Antecedent transaction claims by an office holder in liquidation or administration). It is often seen as safer to put a new security document in place and leave the existing security unamended.
The Companies Act 2006 only sets out the process for registration of new security and amendments involving the addition of negative pledges or amendments to priority. The provisions do not require registration of other types of amendments with the
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