Q&As

Does an intercreditor deed or deed of priority need to be filed at the Land Registry?

read titleRead full title
Produced in partnership with James Hall of Hardwicke Chambers
Published on LexisPSL on 13/12/2017

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 an intercreditor deed or deed of priority need to be filed at the Land Registry?
  • The general position on priority between registered charges
  • Circumstances in which it may be necessary to notify the Land Registry of the terms of an intercreditor deed or agreement
  • The process for filing an intercreditor deed or agreement, or details of its terms, at the Land Registry

Does an intercreditor deed or deed of priority need to be filed at the Land Registry?

Competing security interests arise when more than one creditor has taken security over the same asset or group of assets. Determining the order of priority between those security interests decides the order in which each of the secured creditors can claim on the secured property in an enforcement or insolvency scenario.

Where the proceeds of the security are not sufficient to pay all of the competing secured creditors in full, questions about priority are particularly critical because one or more of them may not recover all of the amounts they are owed if the company cannot pay from other assets. In such cases, being a higher-ranking creditor may mean the difference between a full recovery and no recovery at all.

It is therefore common for creditors to enter into a deed of priority or, where the competing security interests are in favour of lenders funding the same transaction and the position is complex, an intercreditor agreement. For information on intercreditor agreements and when an intercreditor agreement might be appropriate rather than a deed of priority, see Practice Note: Intercreditor agreement—key provisions.

In this Q&A, the term intercreditor agreement is used to describe any agreement that sets out two or more parties’ contractual agreement as to priority of their security interests in respect

Related documents:

Popular documents