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Fixed charge: Difference between revisions
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''See also: [[Assignment by way of security]]'' | |||
A fixed charge is a type of [[charge]]. That is fixed. It doesn’t, so to say, ''[[floating charge|float]]''. | A fixed charge is a type of [[charge]]. That is fixed. It doesn’t, so to say, ''[[floating charge|float]]''. | ||
A [[fixed charge]] encumbers asset it secures from day one. To benefit from a fixed charge you need to have control over the assets - if the | A [[fixed charge]] encumbers asset it secures from day one. To benefit from a fixed charge you need to have control over the assets - if the debtor can deal with the secured assets as it pleases without your knowledge and control, your [[fixed charge]] may fail. On a good day it might get [[recharacterised]] as a floating charge — but don't bank on it and note that there are certain formal requirements to perfect a floating charge which you are likely not to have done, seeing as you were thinking what you had was a fixed charge. | ||
===Why take a fixed charge?=== | ===Why take a fixed charge?=== | ||
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*Plant | *Plant | ||
*immovable forces | *immovable forces | ||
Custody assets (where the charge holder is the Custodian) | *Custody assets (where the charge holder is the Custodian) | ||
In more recent times intangible legal rights: | |||
*[[Book debts]] | |||
*[[Receivables]] | |||
*[[Bank Account]]s | |||
===Important case law=== | |||
Just because you say you have a fixed charge doesn't mean you do. Practical, factual considerations will apply. There are two important recent cases: | |||
*{{casenote1|Re Spectrum Plus}} | |||
===Fixed charges are not so good for=== | ===Fixed charges are not so good for=== | ||
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*[[security]] | *[[security]] | ||
*[[mortgage]] | *[[mortgage]] | ||
*[[Assignment by way of security]] | |||