After Acquired Property: Chargee's Position

The question of whether a lender can enforce a fixed charge security in respect of after acquired property has been addressed in the case of Anglo Irish Bank Corporation Limited ("Anglo") v Kilquane Limited ("Kilquane") and the Property Registration Authority (the "PRAI") [2013] IEHC 659. An after acquired property clause ("AAP Clause") can be found in most standard form security agreements. An AAP Clause is one which purports to create a charge over any property which a borrower may acquire subsequent to entering a deed of charge (or mortgage).

A charge containing an AAP Clause seeks to create security over property which is unascertainable at the time the deed is entered into, but which takes effect once the borrower acquires the additional property. A legal charge can only be created over an asset which is clearly identifiable in the security document and the chargor must hold legal title to the property at the time the charge is created.