Form and effect of charges

(1) A proprietor may, by an instrument in the prescribed form, charge his land, lease or charge to secure the payment of an existing, a future or contingent debt or other money or money’s worth or the fulfilment of a condition, and the instrument shall contain a special acknowledgement that the chargor understands the effect of section 75, and the acknowledgement shall be signed by the chargor, or where the chargor is a corporation, by one of the persons attesting the affixation of the common seal. (2) A date for the repayment of the money secured by a charge may be specified in the charge instrument, and where no such date is specified, or repayment is not demanded by the chargee on the date specified the money shall be deemed to be repayable three months after the service of a demand in writing by the chargee. (3) The charge shall be completed by its registration as an encumbrance and registration of the person in whose favour it is created as its proprietor and by filing the instrument. (4) A charge shall not operate as a transfer but shall have effect as a security only. (5) There shall be included in an instrument of charge securing the fulfilment of a condition or the payment of an annuity or other periodical payment not of the nature of interest on a capital sum, such provisions as the parties think fit for disposing, subject to section 79, of the money which may arise on the exercise by the chargee of his power of sale, either by setting aside the proceeds of sale or part thereof and investing it to make future periodical payments, or by payment to the chargee of such proceeds or part thereof to the extent of the estimated capital value of the chargee’s interest, or otherwise. 49