A charge over accounts is a form of security whereby the lender takes a fixed or floating charge over one or more bank accounts held by the borrower, typically relating to the development project. In UK property development finance, this is often used to control drawdowns, hold proceeds from sales, or secure the use of loan funds for approved purposes. The charge allows the lender to restrict access to funds and, in default, to freeze or recover amounts in those accounts. This helps ensure financial discipline and enhances recovery mechanisms during enforcement.
Within the wider framework of Securities and Collateral, a charge over accounts gives lenders practical oversight of project cashflows throughout the development lifecycle. It is commonly applied to designated accounts used for land acquisition, construction funding, sales receipts or interest reserves, allowing the lender to monitor how funds are received and applied. This security can also interact with payment waterfalls and distribution controls where proceeds are allocated according to agreed priorities. In some funding structures, account controls may influence the calculation and distribution of returns linked to Percentage of Gross Revenue, particularly where sales income is paid directly into charged accounts before being released for approved uses.
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