Security interest

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Security can take many forms, depending on your legal system. We here are principally concerned with the common law. That is, the proper one. The overweening piece of statute here is the Law of Property Act 1925. There are legal security interests - which involve transfer of the legal title to the secured property — a good example is a fully registered mortgage, and equitable security interests, where legal title is not transferred but the security holder acquires enough of a beneficial interest to take the asset out of the direct insolvency estate of the debtor. Good examples here are charges and assignments by way of security — by their nature are always equitable.

Legal security interests can (and often do) revert to equitable security interests if they fail for formal or procedural reasons.


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