A legal charge is a legal interest in a property that is granted to a lender as security for a loan. It gives the lender the right to take possession of the property if the borrower fails to repay the loan according to the terms of the mortgage agreement.
Legal charges are commonly used in the context of mortgages, where the property being purchased is used as collateral for the loan. The legal charge is registered at the Land Registry, and remains in place until the mortgage has been fully repaid.
Legal charges are an important consideration for both borrowers and lenders, as they provide protection for the lender in the event that the borrower defaults on the mortgage. For the borrower, it is important to understand the terms of the legal charge and the implications of defaulting on the mortgage, as the lender may be able to repossess the property in order to recover the loan.
You can have a first charge, second charge and even a third charge on a property, where you borrow against the same property but from different lenders.
