Which description best defines a 'legal charge' in the context of a mortgage?

• A. A transfer of ownership to the lender
• B. A security interest created by registration
• C. A lease from the owner to the lender
• D. A contractual promise to pay rent

Answer: (B)

A legal charge is a security interest created by registration. In a mortgage, the borrower’s land is charged to the lender, and this charge is registered on the title at the land registry. That registration gives the lender a legal interest in the property and the ability to enforce the security, typically by selling the property if the borrower defaults. This differs from transferring ownership to the lender, which would change ownership, from a lease, which creates a tenancy, or from merely promising to pay rent, which is not a security over the property.