There are changes in the law of charges and debentures. The aim is to simplify the registration of charges and to make the priority rules clearer.
The main changes are as follows:
- Under Irish law to date, “charge” has included a mortgage. This is now modified. Under the new law, it is expressly stated that a charge does not include a mortgage or a charge over an interest in cash. (Section 408)
- In relation to a company a “charge” does still mean a mortgage or a charge that is created over an interest in any property of the company. This includes a judgment mortgage.
- From now on there will be a “one stage procedure” (similar to the law as we know it) and a “two stage procedure” for registering charges.
- With the two stage procedure an initial notice can be given to the CRO which states that the company intends to create a charge. This is then followed up with the detailed notification of the creation of the charge which takes place, as before, within 21 days of the creation of the charge. The idea is that banks might be more willing to advance money if they can be certain of an enhanced security priority.
- The rule that priority dates from the creation of the charge is being changed. The new rule is that whoever gets the charge in to the CRO for registration first, is first in time.
- A number of registration rules have not been carried over.