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Buachaill
Buachaill, Barrister
Category: Law
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Experience:  Barrister 17 years experience
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If I take a second charge on a property against a private loan,

Resolved Question:

If I take a second charge on a property against a private loan, does the borrower have to inform the first mortgage provider?
Submitted: 1 year ago.
Category: Law
Expert:  Buachaill replied 1 year ago.
1. In these circumstances, there is no obligation on the borrower to inform the first chargeholder unless there is a term in their mortgage that the taking of a second charge has to be notified to the first mortgage provider. So the borrower should check the terms of the mortgage agreement see if there is this notification requirement. There is no universal practice. However, such notification clauses are sometimes there. The reason why they are not universally present is the fact that the first mortgage holder always finds out once the second charge is registered in the Land Registry against the property. So the borrower is worried about informing his mortgage provider, be aware that it makes no difference, as the first Mortgage provider cannot prevent a second charge being registered and anyway, the first mortgage holder will find out anyway.
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