IRELAND Law and Practice Contributed by: Diarmuid Mawe, Craig Kenny, Katelin Toomey and William Fogarty, Maples Group
has not occurred, but the secured assets are in jeopardy. Registering Security Interests Before certain security interests created by a company can be valid and have priority over subsequent security interests, they must be registered in the CRO within strict time periods, or the charge may be rendered void against the liquidator and any creditor of the company, and priority will be lost. Where a certificate of charge has been issued by the Registrar, it is conclusive evidence that the charge has been registered. The priority of charges runs from the date of filing, and not from the date of creation of the charge. Priority of Charges The rules on the priority of charges take effect subject to the rules on priority contained in any other enactment governing the priority of such charges. Consequently, the priority of charges created by companies over real estate will be determined in accordance with the order in which they are registered in the Land Registry or the Registry of Deeds, as the case may be. Enforcement and Realisation of Security The timeframe for the successful enforcement and realisation of security on property in Ireland can vary greatly. If the borrower is co-operative, the enforcement process can proceed smoothly, especially where possession is voluntarily sur - rendered. If the borrower is not co-operative, however, the process can take time and may involve court applications, particularly if the validity of the security is challenged or if posses - sion is not voluntarily surrendered. If a receiver is appointed over the assets of a company, cer - tain statutory filing and advertising requirements must be adhered to.
The situation can be more complex where secu - rity is over a principal private residence, and certain conditions set out in the 2009 Act will have to be complied with when enforcing the security. Where the consent of the borrower is not forthcoming, a court order will be required prior to a lender possessing or selling a property. These requirements can cause delays in a lender enforcing its security. An Irish company (or its directors, creditors and shareholders holding at least 10% of the com - pany’s paid-up voting share capital) may peti - tion the High Court to appoint an examiner in circumstances where that company is unable (or is likely to be unable) to pay its debts but where there is a reasonable prospect of the survival of the company. During the period that an exam - iner is enquiring into the affairs of a company, a moratorium prevents secured creditors from enforcing their security without the consent of the court. The government has not sought to restrict a lender’s ability to foreclose as a result of the COVID-19 pandemic. 3.7 Subordinating Existing Debt to Newly Created Debt As set out in 3.6 Formalities When a Borrower Is in Default , a real estate lender must register the charge/mortgage with the CRO to perfect security. Once the security is perfected, newly created debt cannot obtain priority over existing debt, other than by agreement. The priority of debt can also be structured through the following:
• contractual subordination; • structural subordination; or • intercreditor arrangements.
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