Rights In Security Flashcards
What are the three categories of security
Real security- creditor holds a real right in addition to his personal right so two real rights exist in the same thing
Personal security - creditor holds personal right against guarantor of debtor in addition to that he holds against debtor
Functional security- creditor retains full ownership until debt is paid off
How is security over heritage enforced
Calling up notice procedure
Mortgage Rights Act 2001
Home owner and debtor protection Scotland act 2010
What are the two main types of security over moveables
Pledge:
Created through delivery to creditor
Lien: created through operation of law where creditor is in possession of goods
Special lien: specific debt
General lien: all sums owed, only available to lawyers, bankers etc
What’s the other security over moveables
Landlords hypothec
Created through operation of law since landlord has civil possession of the goods
Occurs when there’s a default in commercial rent
How are securities over moveables enforced
Apply to court for power of sale
How is a floating charge created
It’s created in writing and registered in the companies register
(Note that floating charge is an “elastic” security that floats over everything in their patrimony and can only be used by companies and LLPs)
How is a floating charge enforced
On default a creditor may appoint an administrator
If company put into liquidation, charge attaches
How is a security terminated
Discharge of debt - note registered security requires this to be registered
Property no longer exists
Renunciation by creditor
Enforcement by creditor
Confusion
How is security over heritage created
Created in writing and registered. Form A (loan plus security) Form. B (security only)
Is a special lien voluntary
No
