A form of security interest, typically a legal mortgage (www.practicallaw.com/6-107-6755), taken over tangible movable property (known as chattels (www.practicallaw.com/5-382-5591)). Legal title to the chattel (or chattels) is transferred to the mortgagee (typically the lender) on the condition that such title will be transferred back to the mortgagor (who may be the borrower or a third party) on repayment of the debt. Assets that are commonly secured in this way include:
Industrial items, like plant or machinery, that are not suitable for possessory forms of security (such as pledges (www.practicallaw.com/2-107-7016)).
Valuable vehicles, artwork and precious metals.
Ships and aircraft.
For more information on the types of security that may be taken over chattels, see Practice note, Taking security over chattels (www.practicallaw.com/4-200-4396).
For a document creating a mortgage over chattels, see Standard document, Mortgage of chattels (www.practicallaw.com/7-500-3226).