Benefits provided by a Security Trustee Arrangement

There is only one legal charge to be registered at the land registry which is both swift and simple. This reduces the paperwork and workload for all co-funding partners whilst affording them the same level of security and protection.

There is far less paperwork to co-ordinate and sign between all funders prior to completion, which makes the legal process more efficient and expedient. This prevents undue delays and stress among both the funders and borrower which can also be highly problematical when the loan is to fund a purchase and therefore involves a contractual commitment with a fixed deadline.

If a co-funder is unavailable due to illness, holidays or simply other commitments, matters can be dealt with on their behalf, with of course their prior written approval.

If a co-funder wishes to have their funding participation, in full or part, returned prior to the loan being repaid we can simply switch their position with another funder, subject to prior agreement. This can be effected swiftly without the need to involve the work and expense of changes to the legal documentation and registered legal charges. It also removes the uncertainty of the borrower’s cooperation which may or may not be forthcoming.

A security trustee arrangement also has the advantage of directing the borrower to deal with one entity when managing their relationship under the security documents and saves other funders the corresponding time and inconvenience.

The security trustee, through the trust structure, will owe certain additional obligations or duties to its beneficiaries, being the individual funders. Since the security trustee sits between the borrower and the funders, the security trustee provides an additional layer of protection for the funders that they would not get if they held the security directly.

The security trustee structure provides the co-funder with complete anonymity.

Whilst the above makes reference to UK lending, the same procedure applies to loans granted in Jersey.