Non-possessory charge (underpant)
Also known as registered charge, non-possessory pledge, tinglyst pant
A non-possessory charge is security where the debtor keeps and uses the asset, while the charge is perfected by registration (tinglysning).
Key facts
- Perfected by
- Registration (tinglysning)
In practice
The non-possessory charge is what is used in practice: the customer keeps the car, the machine or the property and can carry on working, while your security is registered.
Registration is the whole point. Without it, the security is not protected against other creditors — and then it is worth little when it matters.
Where it commonly goes wrong
- A charge is agreed, but never registered. That is an agreement, not a security interest.
- You register without checking what was already there. Priority decides everything — second place behind a mortgaged property is no security.