MORTGAGES EXTENSION.

Hawera Star, Volume XLVIII, 15 November 1924, Page 7

MORTGAGES EXTENSION.

THIS YEAR’S ACT EXPLAINED /

A Hawera lawyer has kindly furnished us with the following memorandum as to the effect of the above» —

The Act repeals the Mortgages Extension Act, 1919, the Mortgages and Deposits Extension Act, 1921, and the Loan Companies Act, 1921, section 4. This memo, is not intended to be anything more than a-brief indication of the main provisions of the Act. (1) Tlie mortgages affected by the Act are defined and the provisions of the Act extend to agreements for sale of land. THe Act, however'; does not apply to mortgages and agreements executed after October 24, 1919. (2) The Act' creates jurisdiction to the Supreme Court to extend the date for payment of a mortgage. Tins order can be made only on the application of the mortgagor and the application must be filed before January 31, 1925. The longest extension that can be given is to a date not later than March 31, 1927. The court may take into consideration in such application the effect of the continuance of the mortgage upon the security, the inability of the mortgagor to redeem the property, the conduct of the mortgagor in respect of breaches of covenant, any hardship that will be inflicted on the mortgagee by oontinuance or upon the mortgagor by the mortagee calling up the mortgage. Tlie court may also by such extension make the pnncipal sum payable by instalments. (3) The powers of a mortgagee to call up his mortgage are limited by the Act in the following way: —Ontil March 31, 1925, a mortgagee may not call up the principal sum or exercise his power of sale. Until that date also, a mortgagee may not commence an action for -breach of covenant —other than the covenant as to payment of interest—without the special leave of the court. After March 31, 1925, a mortgagee may not exercise his powers of sale without giving three calendar months’ notice. Upon the expiration of that notice the Act cease's to apply to such mortgage. (4) The other provisions affecting mortgages are that where a mortgage has been a fleeted by the Mortgages Extension Act, and the term has not been extended by agreement the mortgagor shall be entitled to repay to the mortgagee upon giving three months’ notice, in writing. An alteration has been made in the rate of interest chargeable by mortgagees. Where the rate of interest provided by a mortgage or an agreement executed subsequently to the mortgage i slower than 6 per centum pe,r annum interest shall he paid at the rate of 6 per centum per annum.

Where the rate of interest, however, was increased by the Mortgages and Deposits Extension Act, 1921, to 6? per cent, per annum, the rate of interest shall, from the commencement of the Act, namely, October 24, 1924, be 6 per cent, per annum. This provision, of course, does not affect agreements in writing whereby the rate of interest was increased to more than € per cent. Trusfees are empowered to renew mortgage fo ( r terms not exceeding five years at such rate of interest as mortgagees think fit, notwithstanding that a higher rate may be obtainable for a new loan.

The foregoing, while not being in any wav exhaustive, gives some indication of tile effect of the Act.