# Company Acquiring a Property Already Subject to a Charge

## 1. The Situation

A property that already has a registered charge is sold to a company with the charge-holder's consent. The acquiring company must ensure the charge is properly recorded in its own name as per Section 77.

## 2. Required Action

The acquiring company has two duties:

1. Vacate the earlier charge registered against the seller.

2. Register a new charge in its own name with the ROC.

This prevents the public register from showing a stale charge against the old owner while leaving the new owner's encumbrance invisible.

## 3. Why This Matters

Without this step, prospective lenders or buyers searching the ROC records for the new acquirer's charges would see a clean slate — even though the property is genuinely encumbered. The mechanism preserves the integrity of the constructive-notice doctrine under Section 80.

Worked example

### Example 1

Example: XYZ Ltd buys a factory from ABC Ltd. The factory has an existing registered charge in favour of Bank B, who consents to the transfer. XYZ Ltd must (a) ensure the original charge against ABC Ltd is vacated, and (b) file a fresh CHG-1 registering the charge against XYZ Ltd in favour of Bank B.

⚠️ Common exam mistakes

Assuming the original registration 'travels' with the property to the new owner — it does not. The new owner must re-register.
Ignoring the requirement of charge-holder's consent for transfer of charged property.
Failing to vacate the older charge entry, leaving the public register misleading.

Reference:

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Company Acquiring Property Already Subject to a Charge

Worked example

⚠️ Common exam mistakes