Contributed By Winston & Strawn London LLP
Security is usually released by a deed of release upon discharge of the secured liabilities, or on permitted disposal of a charged asset.
When security granted by an English-registered company or limited liability partnership is released, the security provider will usually require the release to be recorded at Companies House. However, a failure to do so does not affect the effectiveness of the release. When a legal mortgage over registered real estate is released, the lender must also execute and file the appropriate Land Registry or Land Charges Department form.
When an asset subject to a floating charge is sold, a release of the charge is usually not necessary. However, the buyer may request a letter of non-crystallisation from the charge holder. This is to ensure the buyer takes the asset free from any fixed charges.
Any security arrangements which have been notified to other parties will require notice of the release and re-assignment.