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Reasons for amending a security document

There are situations where parties may consider amending security documents. Common examples include:

1. •

   the parties want to make changes to the obligations being secured

2. •

   the chargee wants to assign or novate its security following a transfer of the debt

3. •

   the parties want to charge additional assets or change the nature of an existing charge (eg from a floating charge to a legal mortgage), and/or

4. •

   the parties want to correct a mistake or document an amendment to what has been agreed

Parties may consider that amending a security document may be cheaper and easier than putting a new security document in place.

Key risks of amending security documents

New security?: Depending on the type of amendment, there is a risk that a liquidator or administrator could argue that new security has been created risking the security being set aside (see Practice Note: Introductory guide to antecedent transaction claims—considerations for lending transactions).

Registration at Companies House: The Companies Act