Lenders are required to register initial notices for pre-existing securities before February 16, this year to enable them effect security against third parties competing for similar rights.
In a press statement, Esther Omulele of MMC Africa Law said the move has been necessitated after the Movable Property Security Rights Act was assented into law in 2017 requiring the registration of pre-existing security rights over assets to be done within nine months after the Act’s commencement date of May 2017.
She also advised all financiers holding security rights registered under the now repealed Chattels Transfer Act to register all initial notices through the e-citizen portal to secure their rights.
Omulele said: “Under section 92 (1) of the Act, prior security rights created and registered before the commencement of the Act would remain effective against third parties until the earlier of either the time the security right would have ceased to be effective under the prior applicable law or the expiry of 9 months after the new law came into effect.”
She urged lenders to move with speed to safeguard their security rights in respect of any facilities that may have been advanced to borrowers before the window period lapses on Friday this week.
She noted that those to undertake the registration, will be required to provide a copy of their national identity card or passport, certificates of incorporation or registration, KRA PIN of both the lender and debtor, postal and email address, phone numbers, description of whether debtors authority has been obtained or not, a copy of security instruments, right obtained through a court order or copy of the decree and an identifier of the secured collateral such as serial number or chassis number.
Omulele, however, clarified that a notice can be filed on behalf of another entity or person and that lawyers can also register initial notices on behalf of their clients. The Act now allows for the registration of security over a new class of assets such as intellectual property.