A security agreement is a legal contract outlining the terms under which a lender takes security over a borrower’s assets in a property development finance transaction. It specifies the secured obligations, the collateral involved (which may include property, receivables, shares, or other assets), and the rights of enforcement. In UK development finance, this agreement often forms part of a wider suite of finance documents and supports the lender’s ability to recover funds in case of default. It may accompany or incorporate fixed charges, floating charges, or legal mortgages, depending on the deal structure.
In practice, a security agreement helps coordinate the various protections a lender may require across a development project, ensuring that security interests are clearly documented and enforceable throughout the funding term. It typically operates within a broader framework of Securities and Collateral, working alongside other forms of security to strengthen the lender’s position. The agreement is often supported by a separate Security Document, which records the specific charges, mortgages, or assignments granted as collateral. It may also be relevant where a developer uses Cash-Out Bridge funding, as lenders will usually require comprehensive security arrangements before releasing capital.
View glossary entry