UK Accounting Glossary
The word tacking denotes annexing, and as applied to mortgages. It signifies the annexation of a subsequent to some prior charge so as to squeeze out a mesne charge. This happens when a third of subsequent mortgagee of land, by getting a conveyance to himself of the legal estate of the first mortgagee, is enabled to obtain, for his own security, priority over the second mortgage; or where a first legal mortgagee, by taking a further mortgage for a further advance upon the same property. Defeats the equitable claims of a mesne encumbrance, ie, a person who has lent money on the property after the first but before the further mortgage. The party is then said to tack his mortgage to the first mortgage. This is permitted if the person who claims to tack his originally advanced his money without notice of the encumbrance or encumbrances over which he claims priority, notwithstanding that he might have had notice of the same before getting in the legal estate. For the person so claiming to tack is held to have equity equal to that of the mesne encumbrance over whom he claims priority; and having got in the legal estate, he obtains priority on the principle that where equities are equal, the law shall prevail; and mere priority of time is not regarded where there is any other ground of difference.
The law of tacking is express in following rules which are principally taken from the celebrated case of Brace v Duches of Marlborough
What is Sub-mortgage
When a mortgagee borrows money upon the security for any part of the security held by himself to secure the loan made by himself, he effects what is called a sub-mortgage. For example, an equitable mortgagee by deposit may deposit with any third person by way of securing an advance made by the latter to himself all or any of the title deeds deposited with him by the original mortgagor.
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Definitions for Tacking Mortgages are sourced/syndicated and enhanced from:
This glossary post was last updated: 18th March 2020.