Mortgages and Charges

The Companies Act 2014 introduced a new priority regime for charges, and a new set of processes for registration with effect from its date of commencement 1st June 2015.

Charges - New Priority Regime

Section 412 (3) provides that the priority will be determined by the date and time of receipt by the Registrar of a fully filed charge submission. The date of creation of the deed of charge no longer determines its priority.

Details of  mortgages or charges created by a company must be delivered to the CRO  within 21 days either of the creation of the charge or of notice to create the charge. Failure to register the charge within 21 days has the effect of making the charge void against a liquidator of the company and any creditor of the company.   If a company fails to comply with the requirement to deliver to the CRO the charge will be void against the liquidator and any creditor of the company

Section 409 introduces new filing procedures, including a new two-stage procedure. Section 409(9) provides that the Registrar will not accept deeds or supplemental documents.

Mandatory E-filing with ROS signatures - (see also Registering for ROS)

In order to establish certainty on the date and time for the purposes of priority, and visibility of charge submissions on the Register, e-filing with a ROS signature has been mandated by Order of the Minister in accordance with Section 897 of the Companies Act 2014. When charge submissions are e-filed and electronically signed, the date and time for the purposes of priority automatically established.

Forms C1, C1A and C1B and F8, F8A and F8B are now available for online submission with a ROS signature.

The ROS Cert or Sub-Cert must be in the name of the person signing the form, the company name is not sufficient for filing purposes.

Two separate individuals are required to sign, one on behalf of the company, and another on behalf of the charge holder. In this regard please ensure that they are both carefully entered in the Form/s as signatories. Please note that the full name must be stated and not a shortened version (eg first name initial, surname).

It is of particular importance that such individuals can be clearly identified when using the ROS signatures, hence the requirement for their ROS Certs or Sub-Certs to be in their own name and for this to match the name inputted as signatory on the Form.

When the same name is inputted on the Form/s for both signatures an error will occur. Also where the name on the ROS Cert does not generally match the name on the Form an error will occur. Both these errors will prevent the Form from being successfully submitted.

The e-filing procedures available are the one and two stage procedures;-

One Stage Procedure

Under the one stage procedure, and e-filed and ROS signed C1, filed within 21 days of creation, will receive priority from the e-filing date. Under the one stage procedure, signatures on behalf of both parties will be required on the C1. A different signatory is required for each party. The full name of each signatory must be provided on the C1. The name of the signatory must be verified by the ROS Cert or Sub-Cert. Once the second ROS Cert is applied, the C1 is submitted and the date and time for the purposes of priority is automatically established.

Two Stage Procedure

Under the two stage procedure, an e-filed and ROS signed C1A-notice of intention to create a charge, followed within 21 days by an e-filed and ROS signed C1B-confirmation of creation of the charge, will receive priority from the date and time of the e-filed C1A. Under the two stage procedure, both parties may sign the C1A, and the C1B, however the signing requirement is that if either party has not signed the first stage(C1A), then they must sign the second stage (C1B). A different signatory is required for each party. The full name of each signatory must be provided on the C1A and the C1B. The name of the signatory must be verified by the ROS Cert or Sub-Cert. When the C1B is ROS signed and submitted, the date and time for the purposes of priority is determined by the C1A filing.

Please see video below  for help on efiling a C1 eForm

http://youtu.be/x4zV0MNQjvA 

No extension of time for registration can be given by the CRO. Consequently, registration cannot be effected where applications have been received by the CRO outside the 21 day time limit, or where amendments or alterations have been made outside that time limit to particulars lodged within the time limit.

If a company has failed to comply with section 409, an application may be made under section 417 to the High Court for an order extending the time for registration. If an omission or miss-statement of any particular charge is noticed after registration, an application for an order rectifying the particulars can also be made to the Court.

When the CRO is satisfied that the statutory requirements have been met, a certificate of charge is issued. The certificate is conclusive evidence that the requirements of the Companies Act 2014 have been complied with. A filing fee of 40 euro is required for each application submitted. The prescribed forms for submission of particulars of a charge are:

In the case of a company incorporated in the State;

  • e-Form C1 - Application to register particulars of a charge in the State
  • e-Form C1A - Application to register particulars of a charge in the State (stage 1 of two stage procedure) (Form C1B has no fee).

e-Form C1, C1A and C1B - Particulars of a Charge created by a company incorporated in the State, must be filed electronically using www.core.ie. An electronically filed registration of charge has a filing fee of 40 euro.

External Companies

The procedures and forms outlined above refer to Irish registered companies. Foreign or external companies which establish a branch in the State are obliged to register with the CRO under Companies Act, 2014. Where a registered external company creates a charge over a property in the State, which charge requires to be registered with the CRO pursuant to Part 7 Companies Act 2014, the requisite particulars of the charge are required to be delivered to the Registrar of Companies. Such charges will be registered by the CRO and a certificate of registration will be issue to the presenter in due course.

If an external company fails to comply with the requirement to deliver to the CRO the charge will be void against the liquidator and any creditor of the company. A filing fee of 40 euro is required for each of the following forms submitted. The prescribed forms for the submission of particulars of a charge are:

  • Form e-F8 - Application to register particulars of a charge in the State
  • Form e-F8A - Application to register particulars of a charge in the State (stage one of a two stage procedure) ( Form e-F8B has no fee).

To file charges under the Companies Act 2014 you must :-

Judgment Mortgage

A creditor who has recovered judgment in the courts for a sum of money owed may convert the judgment into a mortgage affecting property owned by the debtor.

Section 413 Companies Act 2014 provides that, where a judgment is recovered against a company and such judgment is subsequently converted into a judgment mortgage affecting any property of the company, the Property Registration Authority will then inform the creditor of the creation of the charge.

The creditor must then submit Form C10 - Judgment Mortgage to the CRO within 21 days of notification from the Property Registration Authority. The Property Registration Authority should notify the company within 3 days of the creation.

Hence, a copy of the affidavit, duly certified, must be received by the CRO within 24 days of the date of creation. A judgment mortgage has a filing fee of 40 euro.

Form C10 must be accompanied by the relevant judgment mortgage document. A certified copy, as appropriate of Form 60, 60a or 60b set out in the Schedule of Forms to the Land Registration Rules 2012, (S.I. No.483 of 2012) as amended by the Land Registration Rules 2013 (S.I. No. 389 of 2013) or Form 16 set out in the Schedule to the Registration of Deeds (No.2) Rules 2009 (S.I. No.457 of 2009), used for the purposes of converting the judgment concerned into a judgment mortgage.

Digital Certificates

Mortgage/Charge Certificates issue as “digitally certified” documents. These Digital Certificates have replaced the paper Mortgage Certificates previously posted out to presenters. The Digital Certificates are emailed as a pdf document to the email address entered in the “Presenter Details” section of the eform submitted to register the charge. This facilitates immediate receipt of certification by the presenter as soon as the charge has been registered.

Satisfaction of a Charge        

A charge can be satisfied either fully or partially

Details of the satisfaction of a charge should be completed on the following forms:

  • Form C6 - Full Satisfaction
  • Form C7 - Partial Satisfaction

Both the full and partial satisfaction of charges, C6 and C7, have filing fees of 15 euro each.

Where the charge holder (chargee) / judgment creditor has signed the form, the satisfaction will be registered without notice being issued under Section 416(1) of the Companies Act 2014. If the C6/C7 is completed by the company only, then the CRO notifies the person(s) entitled to the charge that a memorandum of satisfaction has been received for registration. The person(s) entitled to the charge has (have) 21 days to lodge an objection to the registration of the memorandum of satisfaction. It is essential that letters objecting to the registration of satisfaction of a charge are addressed to Mortgages Section. If no objection is received the satisfaction is registered.

Change of Lender

The CRO register of charges records "the persons entitled to the charge" as one of the mandatory items specified in section 414(1)(f) Companies Act 2014.

In the event that there is a change in the identity of the lender under a registered charge during the lifetime of that charge, it is possible to have the details of the person entitled to the charge amended on the CRO register by submitting Form C17, CRO will then be in a position to amend the "Person Entitled" details on the register in respect of the charge concerned.

The form C17 can only be used in the instance set out above.

FAQ's on Mortgages

Is there any change to the procedure to register charges?

Yes , All C1, C1A and C1B charges must be filed online. It is not possible to submit a paper copy of an e-Form C1, C1A or C1B or equivalent. Please see www.core.ie regarding online filing.        

A charge may still be registered by filing a eForm C1 within 21 days of creation of the charge. There are changes to the eForm C1. It is no longer possible to tick a box to select the charge type, instead a brief description of the charge is required. The deed of mortgage/charge is no longer required to be filed. Details of a negative pledge clause, crystallization of a floating charge are not to be included in the short particulars of the charge.

Under section 409 of the Companies Act 2014, a new two-step procedure allocating priority is also available - An eForm C1a may be completed by giving notice of the intention to create a charge. Within 21 days of receipt of a correctly completed C1A, an eForm C1B must be filed confirming completion of charge.  If eForm C1B is not submitted within this timeframe, the eForm C1A will be rejected.

All C1, C1A and C1B charges must be filed online. It is not possible to submit a paper copy of a eForm C1, C1A/C1B or equivalent. Please see CORE regarding registration for online filing.

Can a Company use a ROS signature to file?

No. The ROS Cert or Sub-Cert must be in the name of the person signing the form, the company name is not sufficient for filing purposes. Where the name on the ROS cert does not generally match the name on the Form an error will occur. This will prevent the Form from being successfully submitted.

Can I as a Solicitor sign on behalf of both the lender and the company?

No. Two separate individuals are required to sign, one on behalf of the company, and another on behalf of the charge holder. In this regard please ensure that they are both carefully entered in the Form/s as signatories. Please note that the full name must be stated and not a shortened version ( eg first name initial, surname).

It is of particular importance that such individuals can be clearly identified when using ROS signatures, hence the requirement for their ROS Certs or Sub-Certs to be in their own name and for this to match the name inputted as signatory on the Form.

Where the same name is inputted on the Form/s for both signatures an error will occur. Also where the name on the ROS Cert does not generally match the name on the Form an error will occur. Both these errors will prevent the Form being successfully submitted.

Is there any extra time allowed to file the form?

No. Under the Act, there is no extra time to file a charge form. If the document is not received, within the 21 days as required, the form is rejected.

What is the priority order for charges?

The priority of charges created by a company will be determined by reference to the date of receipt by the Registrar of the prescribed particulars, that is to say, a charge the prescribed particulars in respect of which are received by the Registrar on a date that is earlier than that on which those in respect of another charge are received by the Registrar shall have priority over that other charge.

What if several charges are submitted on the same day for the same company and/or in respect of the same property?

Where the date of receipt by the Registrar of the prescribed particulars of the several charges is the same, priority is accorded to the charge received earliest in time on the date concerned by the Registrar.

Charge eForms C1, C1A, C1B must be completed online at CORE. Where ROS signatures are used and payment made by credit card/CRO account, the entire process can be completed straight away.

The Registrar cannot guarantee priority to a particular charge. Priority is attained from the date of receipt only.

Do I have to use a form now to file a Judgment Mortgage?

 Yes. Judgment Mortgages are now submitted using form C10. The form must be submitted by the creditor within 21 days of receipt from the Property Registration Authority (PRA) of notice of the registration there of a judgment mortgage. The date of receipt of the notice from the PRA is determined to be 3 days after the PRA issued the notice to the creditor.

How do I register a satisfaction of a charge?

The company would complete a form C6 for full satisfaction of a charge or C7 for partial satisfaction.  The form has changed in that a statement is made by a director and secretary of the company or by two directors regarding the satisfaction. Once this is received, a notice is issued to the chargee stating that unless an objection is received to the registration within 21 days, the satisfaction will be registered. Alternatively, the form C6 or C7 can be completed by the chargee. In such cases, no notification is necessary and the satisfaction is simply registered.

Is there a penalty for falsely stating that the charge has been satisfied?

If the satisfaction is submitted by the company and it is found that the persons signed the form knowing it to be false, then the officers in question are guilty of a category 2 offence. Also under section 416(6) Companies Act 2014, if the court considers that the making of the statement contributed to the company being unable to pay its debts, prevented or impeded the orderly winding up of the company or facilitated the defrauding of the creditors, may remove the limited liability as the court may specify for the debts and other liabilities of the company.

Is the Slavenburg filing still applicable under the new Act?

No. This practice is now discontinued. Under the Act, a charge created by a foreign company that has a place of business in the State, but which is not registered with the CRO as an external company which has established a branch, cannot be registered by the CRO, as the company concerned is noton the CRO register. No charges will be accepted on the Slavenburg file which was closed from 1st June 2015