RURAL HOUSING SCHEME

Otago Daily Times, Issue 24420, 4 October 1940, Page 11

RURAL HOUSING SCHEME

COUNTY COUNCILS’ LIABILITIES LEGAL OPINION OBTAINED fSpecial ro Daily Times) W AIM ATE, Oct. 3. A legal opinion on the rural housing scheme was placed before the Waimate County Council meeting from the county solicitors (Messrs Hamilton and Fitch). The opinion was obtained at the request of the Waimate branch of the Farmers’ Union. The solicitors’ letter pointed out that the loans would have to be secured by a special rate over the whole county, and any loss would fall upon the general body of ratepayers. The loans would take priority of all existing mortgages. The only way a mortgagee could be forced to nay overdue instalments would be by sale proceedings. In the case of Crown land, the council would have the right to sell only the lessee’s interest. The only source from which the council would receive money to administer the loans would be the h per cent, interest on the loans, the borrowers paying 3J per cent, and the council 3 per cent, to the State Advances Corporation. It had to be remembered that with a sinking fund the council’s share would be diminishing all the time. The council would have to bear the costs incidental to the raising of the loan from the State Advances Corporation. “Generally speaking we are of the opinion that the scheme is workable and that subject to the council exercising due caution in granting applications, the interests of ratepayers as a whole are not likely to be adversely affected,” the letter stated. “ I think our solicitors’ opinion largely conforms with our own,” said Mr W, Lindsay. "The whole county and not the individual farmer would be liable for loans. It’s exploiting the man in the country because he is still going to be liable for the houses in towns.”

Mr H. B. S. Johnstone agreed that the scheme was not just, but he did not agree that it could not accomplish what was intended. It transferred responsibility from the Government to county councils. Mr H. M. Whatman said if it undertook the scheme the council would need an, overseer or an architect. If undertaken on a large scale the J per cent, allowed would not be enough to cover operating costs. _ > It was decided to refer the solicitors' letter to the Waimate branch of the Farmers' Union.