Discharge of collateral security

The following Property practice note provides comprehensive and up to date legal information covering:

  • Discharge of collateral security
  • Release of a surety
  • Further charge by principal mortgagor
  • Separate mortgage from surety—principal mortgagor redeems
  • Separate mortgage from surety—surety redeems
  • No separate mortgage from surety—surety redeems
  • Life policies

Discharge of collateral security

Release of a surety

The mere fact that a creditor accepts further security from the principal debtor does not release a surety. A release of the collateral security will release the surety.

Further charge by principal mortgagor

A further charge by a mortgagor is discharged by a statutory receipt endorsed on the principal mortgage referring to the further charge or to the aggregate amount of the mortgage money secured by both deeds.

Separate mortgage from surety—principal mortgagor redeems

Where there is:

  1. a principal debtor, and

  2. a surety, and

  3. payment is made by the principal debtor

both mortgages should be discharged by statutory receipt.

Separate mortgage from surety—surety redeems

Where payment is made by the surety he is entitled to a discharge of his own mortgage and a transfer of the mortgage of the principal debtor.

No separate mortgage from surety—surety redeems

However, where there are not separate mortgages eg:

  1. where the principal debtor does not

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