Demand Debenture (Charge)

Summary

This precedent is a form of Demand Debenture which a mortgage lender may want the borrower to deliver as part of the lending documents created at the time the loan is advanced. The document is further evidence of a promise by the borrower/debtor to repay the mortgagee/chargee/lender at some future time on certain terms. This document contains practical guidance and drafting notes. Borrowers who have granted mortgages/charges against their real property may sometimes be asked to execute a Demand Debenture too by the lender/mortgagee/creditor. The Debenture is an additional promise by one party, the debtor, to repay the lender/creditor. It acts as both a claim over the real property and also has a floating claim over personal property. Therefore, it nicely serves the needs of a lender to have a claim over both the real and personal property (if required) of a borrower. The Demand Debenture gives the lender one more option with respect to the borrower's debts. A Demand Debenture may also ...