The principles of tacking are an important yet often misunderstood concept in the securitisation of debt. For lenders, confusion generally surrounds the priorities for real property and personal property security. However, with a proper understanding of the principles, lenders can mitigate some of the priority issues that arise with registered and unregistered mortgages.

Lenders typically secure loans by way of a mortgage over real property or as a security interest over a borrower’s or guarantor’s personal property, including personal, business or company assets.

This article provides a guide on the operation of mortgages and security interests and highlights key differences that Lender’s should consider.

Lenders to amend loan agreements to remove “unfair contract terms” to avoid risk of harsh penalties. 

The new “unfair contract terms” provisions came into play on and from 9 November 2023, and captures Lender’s loan agreements and term sheets.