Securities provide a crucial means by which clients may ensure that:
- their interest in a transaction are protected by ensuring that assets are available to satisfy a payment to the client;
- the client maintains priority over other creditors in the event of an insolvency event; and
- the client minimises legal costs that could be incurred in protracted and complex litigation.
The most common forms of security are mortgages and charges against real property of the other party in the transaction or a guarantor. These security interest may be registered against the title of such property. The client may also register a caveat over the title of that property to ensure that notice of the security interest is given and the property cannot be disposed of without the knowledge of the client. It is also possible to obtain a security interest over personal property of another entity, but clients must be mindful of requirements to register such security interests (if applicable) on the Personal Property Securities Register (“PPSR”) to avoid losing priority in certain circumstances.
Another common form of security obtained in commercial transactions is by way of a bank guarantee. Although this is not a security in the legal sense, it provides the equivalent to the client by ensuring that a source of payment is guaranteed. It is important to note that other forms of guarantees represent only the ability to commence recovery proceedings against the guarantor and may not necessary amount to a secure source of payment to the client.
Rowe Bristol Lawyers is experienced at (among other things):
- advising clients as to whether obtaining security is necessary in the circumstances and the form and quantum of security that is advisable;
- drafting agreements in relation to various forms of security;
- advising in relation to securities over personal property and registering such security on the PPSR; and
- advising clients as to enforcement of securities and representing clients in such proceedings.
If you require legal advice in relation to obtaining and/or enforcing securities, please contact us to arrange a meeting so that we may consider your specific circumstances.
The above information is provided as general information only and should not be relied upon as legal advice. The accuracy of this information may have changed from the date when it was published.