Further Advance, Or Charge - Definition - Law Dictionary Home Dictionary Definition further-advance-or-charge

Definition :

Further advance, or charge, a second or subsequent loan of money to a mortgagor by a mortgagee, either upon the same security as the original loan was advanced upon, or an additional security, Equity considers the arrears of interest on a mortgagee security converted into principal, by agreement between the parties, as a further advance.

Although the tacking of a third or subsequent mortgage has been abolished by the Law of Property Act, 1925, s. 94, that s. has expressly preserved the right to tack a further advance by a prior mortgage so that the advance may rank in priority to subsequent mortgages, even if the further advance was made with notice of a subsequent mortgage or charge in cases where the mortgage imposes an obligation to make further advances. Where the mortgage is to secure a current account or any other further advances, notice of an intervening charge will postpone the further advance to that charge but (by way of exception) in this case notice will not be imputed to the mortgagee by the registration of the subsequent charge as a land charge or in a local deeds registry if it was not so registered at the date of the first advance or when the mortgagee last made a search, whichever last happened. A further advance may be tacked to the original security if the advance has been made without notice by registration or otherwise of an intervening mortgage, whether or not the original mortgage was expressed to secure further advances, and in any case tacking will be allowed if the subsequent mortgagees agree to it. See also EQUITY OF REDEMPTION.

S. 94 of the Law of Property Act, 1925, does not apply to charges registered under the Land Registration Act, 1925. Tacking is not allowed under any circumstances in the case of registered land (see s. 30, L.R. Act, 1930), except that where the proprietor of a registered charge is under obligation noted on the Register to make a further advance, a subsequent registered charge shall take effect subject to any further advance made pursuant to the obligation [S. 5, Law of Properties (Amend-ment) Act, 1926]. See ss. 30, 34 and 106, L.R. Act, 1925.

A second or later loan to a mortgagor by a mortgagee, either on some security as the original loan or an additional security. Black's Law Dictionary, 7th Edn., p. 684