A Charge is a legal mechanism that grants a lender rights over a borrower’s asset to secure repayment under a property development finance agreement. In the UK, charges can be legal or equitable, fixed or floating. A legal charge typically gives the lender stronger rights, including priority in insolvency and the ability to take possession or force sale. Commonly applied to land, property, or development rights, charges are a core part of most secured finance structures. They must be correctly documented and registered with Companies House and, where applicable, the Land Registry to be enforceable.
In practical development lending, a Charge forms part of the wider framework of Securities and Collateral, providing the lender with a defined route to recover outstanding debt if the borrower defaults. The scope and ranking of a charge can significantly influence funding terms, particularly where multiple lenders or layers of security exist. While closely related to a Security Interest, a charge represents a specific method of securing rights over an asset and is commonly documented alongside wider security arrangements. Within a development finance structure, charges are most frequently associated with Senior Debt 1st Charge facilities, where priority over the development asset is a fundamental lending requirement.
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