Mortgages and Other Charges Registered Against Land

Any mortgages, or other loans, secured against registered land will appear in the Charges Register section of the Land Register.

First Mortgages

If the land was purchased with a mortgage, or if the property is subsequently re-mortgaged, this will be referred to in the Charges Register.

The purpose of registering a mortgage is to ensure that anybody who deals with the land, either by a conveyance or by granting a further loan secured against the property, will have notice that there is a mortgage which takes priority to subsequent legal interests.

The Charges Register section of the Land Register will give the date of the mortgage, state what is secured by the mortgage (but not the actual amount of money borrowed) and the date on which the mortgage was registered.

The Register will also give the full name and address of the mortgage company. If the mortgage company has an obligation under the terms of the mortgage to provide further advances this may also be mentioned in the Register.

The original mortgage deed, or a copy of it, may be retained by the Land Registry. An application may subsequently be made to obtain an official, certified copy of the mortgage deed. The creation of a first legal mortgage will now result in previously unregistered land being registered with the Land Registry.

Subsequent Charges

If a subsequent loan or second mortgage is secured against the property, this will be entered on the Land Register in the same way as a first mortgage. Again, the Register will give the date of the loan or mortgage, the date of registration and the name and address of the lender.

Sometimes a secured loan may have been taken out before a mortgage – for example, a loan may have been taken out to provide the deposit on the purchase price. It is likely that such a loan will take second place in legal priority to the main mortgage even if it pre-dates the mortgage.

Equitable Charges

A secured loan may sometimes be registered as an equitable charge instead of a legal charge. There are a number of reasons why this might happen. Some of the most likely reasons why an equitable mortgage might be created are:

• Another lender who already has a loan secured against the property has refused to give permission for a further loan to be secured against the property;
• There is a defect in the documentation which purported to create a legal charge or mortgage;
• The borrower does not own a legal estate in the land but only has an equitable interest such as an interest under a trust.

In any of the cases described above the lender will have an equitable charge rather than a legal charge. This will still give the lender rights in respect of the property and may be registered against the property on the Land Register.

A registration entry for an equitable charge will look slightly different to the entry relating to a legal charge.

Charging Orders

If a company or an individual obtains a judgment, in relation to a debt, against the owner of a property or land they may apply for a charging order to secure that judgment. Charging orders are granted in two stages:

• An interim charging order is granted, without a court hearing, based on an application made by a judgment creditor;
• A final order may be made after a hearing if a judge considers it appropriate to do so.

When an interim charging order is obtained, the company or individual in whose favour it is made is entitled to register it against the property. The Land Register will give the name and address of the creditor, state that they have the benefit of an interim charging order and give details of the court which made the order and the date on which it was granted.

The effect of registration is to prevent the owner selling or disposing of the property without paying the judgment debt. Registration takes place before the hearing to prevent the debtor selling the property before the charging order can be registered.

There is no longer any requirement to register the making of a final charging order – the creditor relies on the initial registration as proof that they have a secured debt. The costs of registering the charging order will be paid by the owner of the property if a final charging order is granted. Usually these costs will simply be added to the total debt secured on the property.