Mortgages—priority
Mortgages—priority

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

  • Mortgages—priority
  • Priority follows the order of registration
  • Alteration of priority
  • Alteration by the court
  • How is it best to deal with a series of charges?

Priority follows the order of registration

Registered charges on the same registered estate will rank between themselves in the order in which they were registered (unless there is an entry to the contrary on the individual register) rather than the order in which they were created.

By contrast, charges over unregistered land usually rank in the order in which they were created.

Alteration of priority

The Land Registration Rules 2003, SI 2003/1417 allow the priority of registered charges to be changed. The consent of any chargee who is adversely affected must be included in any application to change priority.

The borrower has no right to dictate the order in which charges rank and so chargees can alter priorities between themselves without the borrower’s consent.

Alteration by the court

The court may change the priority of registered charges in order to give effect to the true intention of the parties. In Lancashire Mortgage Corporation v Scottish & Newcastle:

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