Anglo Irish Bank Corporation all premises security

Conveyancing 04/11/2016

The Conveyancing Committee has been asked for guidance in relation to a form of 鈥榓ll premises鈥 security entered into between Anglo Irish Bank Corporation plc (now Irish Bank Resolution Corporation [in Special Liquidation]) (IBRC) and natural persons. The mortgage deed registered in the Registry of Deeds in such cases purports to secure 鈥渁ll lands, hereditaments and premises鈥 vested in the borrower(s), in addition to the specific property referred to in the schedule to the deed. It attempts to create a form of floating charge over all of the natural person鈥檚 assets, notwithstanding that a floating charge cannot be effectively created over the assets of a natural person (except for chattel mortgages under the Agricultural Credit Acts).

The committee has considered the implications where this non-specific form of security appears on a search for a property not specified in the mortgage deed. It is aware of one case where the special liquidator issued a letter confirming that IBRC had no further interest in the mortgage and that all moneys on foot of it had been paid. The committee sought the view of the Property Registration Authority (PRA) as to whether such a letter from the special liquidator was sufficient for a first registration application or whether a formal deed of release was required.

The PRA position is that:

  • It can only register a charge where property is specifically charged/mortgaged, and a floating charge is not a registrable burden until crystallisation has occurred,
  • As a floating charge cannot be created over the assets of a natural person, such a purported 鈥榝loating charge鈥 is not a registrable burden under the title registration system.

The committee is therefore of the view that, where this non-specific form of security appears on a search for a property not specified in the mortgage deed, an explanation that it 鈥渄oes not affect the property in sale because a floating charge cannot be created over the assets of a natural person鈥 is acceptable.

In respect of a sale by a company, an explanation that 鈥渋t does not affect the property in sale because the floating charge has not crystallised鈥 (which must be vouched by a letter from the special liquidator) is acceptable.