Determining priority in real property security

In addition to ensuring its personal property security has been validity created, a project lender will want to ensure its security ranks as it expects against any other competing security interests. Disputes as to priority arise less commonly than might be expected due to the use of documents such as deeds of priority and inter-creditor agreements. However, these are only of use if the creditors are aware of each other’s security interests and agree on whose interest should take priority. Where there is no contractual agreement, the general law as to priority will apply.

This guidance note answers the question “why is it important to determine priority between competing security interests”? It goes on to consider the rules which determine the priority of competing security interests in real property where the holders of those interests have not specifically agreed an order of priority among themselves by contract, such as the first in time rule for competing registered interests.

See Determining priority in real property security.