New and Updated Director’s Secured Loan Agreements
We have made some changes to our Director’s Secured Loan Agreement template to make it easier to use. The Agreement no longer provides for a legal charge to be granted over the director’s property as we felt that companies might struggle with the Land Registry procedures for registering a legal charge. Instead, an equitable charge is granted. This is a weaker form of security but the Land Registry formalities are simpler. We have also provided detailed guidance on the Land Registry applications that need to be made (see below).
New Director’s Secured Loan Agreement (Joint Property)
We have added a new Director’s Secured Loan Agreement to cater for the common situation where the director owns his or her property jointly with someone else, for example a partner or other family member. This Agreement distinguishes between the director (to whom the loan is made) and the property owners (who grant the equitable charge).
New Guidance on Land Registry applications
The equitable charge granted by the director (or by the director and the co-owner of the property) needs to be protected by a Notice and a Restriction on the director’s registered title. Our new Guidance explains the investigations that should be carried out at the Land Registry before the Loan Agreement is entered into. It also gives detailed instructions on applying for the Notice and Restriction to be entered on the registered title.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.