Assignments by way of security
Assignments by way of security

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Assignments by way of security
  • What is an assignment by way of security?
  • Which assets are assignments by way of security used for?
  • Assignments by way of security—legal, statutory or equitable?
  • How to create a statutory or 'legal' assignment under the Law of Property Act 1925, s 136
  • Statutory assignments—meaning of the term 'absolute'
  • Statutory assignments—can they be taken over future assets?
  • Statutory assignments—financial collateral arrangements and execution requirement
  • Statutory assignments—what is their effect?
  • Equitable assignments
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers?

Assignments by way of security can take different forms and it is important to understand how they are created and their effect. Security over choses in action such as debts and other contractual rights is often taken by way of an equitable or statutory assignment by way of security.

This Practice Note explains:

  1. what assignments by way of security are

  2. which types of assets they are used for

  3. whether they take legal, statutory or equitable form and the advantages of the statutory form

  4. why it is important to serve notice of an assignment by way of security

What is an assignment by way of security?

Assignments by way of security are a type of mortgage. They involve:

  1. an assignment (ie transfer) of rights by the assignor to the assignee

subject to:

  1. an obligation to reassign those rights back to the assignor upon the

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