Possessory pledge (håndpant)
Also known as pledge with dispossession, håndpant, pant med rådighedsberøvelse
A possessory pledge is security where the pledgee holds the pledged asset — the security lies precisely in the debtor not having the asset.
In practice
The possessory pledge is the oldest and simplest form of security: the pledgee holds the asset. There is no doubt about who controls it, and no registration is required.
In modern commercial relationships it is rarely practical — the customer needs their machinery, after all. That is why the non-possessory pledge (underpant) is far more widespread.
Where it commonly goes wrong
- The pledged asset is handed back “just for a moment”. The dispossession is then broken, and the security may be lost.
- You take a pledge over something the debtor needs in order to earn. The security then guarantees that they cannot pay.