Q&As

Does a debenture or legal charge need to be signed/executed by the lender as well as borrower? If the lender does not have a copy of either document bearing its signature, is the security still valid (assuming, of course, the borrower has executed as a deed)?

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Produced in partnership with James Hall of Hardwicke Chambers
Published on LexisPSL on 16/04/2021

The following Banking & Finance Q&A produced in partnership with James Hall of Hardwicke Chambers provides comprehensive and up to date legal information covering:

  • Does a debenture or legal charge need to be signed/executed by the lender as well as borrower? If the lender does not have a copy of either document bearing its signature, is the security still valid (assuming, of course, the borrower has executed as a deed)?
  • Where the proposed security is a legal charge over specific property
  • Where the proposed security is a debenture
  • Evidence of signature by the lender

Where the proposed security is a legal charge over specific property

In general terms, a legal charge can be granted by a borrower by deed executed by that borrower without the lender having to execute the charge deed. Indeed, most legal charges are only ever intended to be signed by the borrower (chargor/mortgagor) and not the lender (chargee/mortgagee). A charge is a disposition of an interest in land, and is not merely a contract for such a disposition, so its execution does not have to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989) (which requires both parties to any contract for a disposition of an interest in land to be signed by them or on their behalf and to be embodied in one document incorporating all terms agreed, or identical exchanged counterparts of such a document). See Helden v Strathmore at paras [26]–[29] in the judgment. Provided the legal charge complies with section 52 of the Law of Property Act 1925 (LPA 1925) (conveyances, which by LPA 1925, s 205(1)(ii) includes mortgages and charges) only take effect at law if made by deed), LPA 1925, s 53 (disposition of interest in land must be in signed writing, but that is satisfied by complying with LPA 1925, s 52 anyway) and the formalities for execution of deeds (LP(MP)A 1989,

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