Law of Property Act 1925: Difference between revisions

By contracting out of section 93 of the Act we can consolidate all [[security]] granted by a counterparty into a single [[security interest]]. Relevant if you have multiple [[charge]]s, [[mortgage]]s and security interests. You might not intend to, but you never know how a relationship can develop. If you don't disapply it, you could be left with parallel security interests, so you may lose out if there is an excess under one and a shortfall under the other (in that you may wind up as an unsecured creditor for that rump). There is no particular benefit to a client in resisting it, so if one should try to, ''[[hold the line]], [[Toto]]''.

A {{tag|prime broker}} generally won't be able to enforce {{tag|security}} until there has been an [[Event of Default]]. It is key to be able to sell charged assets to a third party. Without this amendment selling the charged assets would be practically difficult as the purchaser would need to investigate whether an [[Event of Default]] had occurred. The effect of this clause is that the power of sale arises as soon as the agreement is signed.

Section 136 [[Law of Property Act 1925]] sets out the formal requirements for an [[assignment]] to be a [[legal assignment]] and not merely an [[equitable assignment]]. The key advantage this brings is that the [[assignee]] can bring a court action to enforce the assigned right without joining the [[assignor]] in the proceedings. Other than that, though, there's little practical difference between the two.  The key formal requirements to comply with section 136 are that it must be or legal and not equitable right,  '''in writing''', an '''unconditional''' assignment of the '''whole''' right, ''expressed as a title transfer not a charge''', notified to obligor of the assigned right.