Rights in Security

Question 1

What are rights in securities commonly known as?

Answer 1

mortgages

Question 2

What type of right are rights in securities?

Answer 2

Subordinate real rights

Question 3

Definition of a security?

Answer 3

Any right which a creditor may hold for ensuring payment or satisfaction of his debt and which is in addition to his right of action and execution

Question 4

What is a personal security?

Answer 4

Not relevant for property law

• when person guarentees debt will b paid (guarantor)

Question 5

What are the two other types of security?

Answer 5

Real security
and
functional security

Question 6

What is a real security?

Answer 6

• Creditor holds real right n addition to person right

- so coupled with ownership = 2 real rights in same thing (e.g. house)

Question 7

What is a functional security?

Answer 7

Creditor retains ownership until debt is paid off in full

Question 8

How do you make a security real?

Answer 8

• Publicity principle

- must be registered

Question 9

Enforcement?

Answer 9

Sale with surplus returned to debtor

Question 10

What obligation is put on the selling creditor?

CFR(S)A 1970 s25

Answer 10

Must sell for best price possible

CFR(S)A 1970 s25

Question 11

What act is all about standard securities?

Answer 11

Conveyancing and Feudal Reform (Scotland ) Act 1970

Question 12

In what 5 ways can a security be extinguished?

Answer 12

• Discharge of debt
• Property no longer exists
• Renunciation
• After enforcement
• Confusion

Question 13

What are the types of voluntary security?

Answer 13

• Pledge
• Floating charges
• Standard Securities

Question 14

What are the type of involuntary securities?

Answer 14

1) Tacit securities
2) Judicial securities
3) those by public bodies

Question 15

What are tacit securities?

Answer 15

Lien and landlords hypothetic

Question 16

What are judicial securities?

Answer 16

Diligences

Question 17

Pledge can be held in what type of thing?

Answer 17

Corporeal moveables

Question 18

How is a pledge created?

Answer 18

by delivery of the good in terms of an agreement for the property to secure an obligation owed

Question 19

Is a pledge normally in writing?

Answer 19

No

Question 20

What counts as delivery?

Answer 20

Creditor having and retaining possession

Question 21

How do you enforce a pledge?

Answer 21

Creditor applies to sheriff

• Licensed pawnbrokers can sell if debt not paid in 6 months
• where debt not exceeding £75 and no sale then property is forfeited to the pawnbroker

Question 22

Who does floating charges relate to?

Answer 22

Only companies

Question 23

Are floating charges normally in writing?

Answer 23

Yes

Question 24

When must floating charges be registered?

Answer 24

In 21 days

Question 25

What is the nature of floating charges?

Answer 25

They float over the companies assets including whatever comes in but excluding whatever leaves.

Question 26

What are standard securities?

Answer 26

Securities over heritable property

Question 27

What act governs them?

Answer 27

Conveyance and Feudal Reform (S) Act 1970

Question 28

What does s1(2)(b) dictate about their formation?

Answer 28

- must be in writing

Question 29

How do they become real?

Answer 29

Must be registered

Question 30

What does such 3 say are the standard conditions of standard securities?

Answer 30

- be assigned - prior tempore portior jure (first come first served) applies sch 3

Question 31

Sch 3 Obligations on the debtor

Answer 31

- maintain and secure property - not to demolish part or all of building - have insurance - need consent to let property

Question 32

Sch 3 obligations on the creditor?

Answer 32

- regulates enforcement and redemption procedures

Question 33

Enforcement of standard securities?

Answer 33

- Principal remedy is sale - calling up notice needed (s19 CFR(S)Z 1970) - person leaves = done - doesn't leave = court action of Order for removal

Question 34

Do standard securities need to be in writing?

Answer 34

Yes

Question 35

What two forms can they be writing in?

Answer 35

- Form A (loan plus security) | - Form B (security only

Question 36

What is a lien?

Answer 36

real right to retain property until the discharge of obligations

Question 37

What is a special lien?

Answer 37

Retention until performance of specific obligation/ specific debt

Question 38

What is a general lien?

Answer 38

Law permits retention for more than one obligation : all sums owed

Question 39

What is essential to lien's?

Answer 39

Possession

Question 40

Lien's mainly concern corporeal property

Answer 40

Wilmington Trust Company v Rolls Royce

Question 41

But can also concern land

Answer 41

Binning v Brotherstones

Question 42

Enforcement of a lien?

Answer 42

Court Authority to sell unless debtor consents

Question 43

Landlords hypothec applies when?

Answer 43

When there is a default in commercial rent payments

Question 44

Enforcement of landlords hypothec?

Answer 44

Apply to court for power of sale