Section 881 | Charge by way of ex facie absolute disposition, etc

(1)For the avoidance of doubt, it is hereby declared that, in the case of a charge created by way of an ex facie absolute disposition or assignation qualified by a back letter or other agreement, or by a standard security qualified by an agreement, compliance with section 878(1) does not of itself render the charge unavailable as security for indebtedness incurred after the date of compliance.

(2)Where the amount secured by a charge so created is purported to be increased by a further back letter or agreement, a further charge is held to have been created by the ex facie absolute disposition or assignation or (as the case may be) by the standard security, as qualified by the further back letter or agreement.

(3)In that case, the provisions of this Chapter apply to the further charge as if—

(a)references in this Chapter (other than in this section) to a charge were references to the further charge, and

(b)references to the date of the creation of a charge were references to the date on which the further back letter or agreement was executed.