Relief for Mortgagors and Tenants

Manawatu Times, Volume LV, Issue 6810, 17 March 1932, Page 7

Relief for Mortgagors and Tenants

Wider Powers in New Legislation Prime Minister Indicates Interest Reductions

Per Press . WELLINGTON, Last Night. ' Progress was reported in the House of Representatives this evening on the Industrial Conciliation and Arbitration Amendment Bill to enable the introduction by Governor-General’s message o: the Mortgagors and Tenants Relief Bi!. Speaking on the formal motion to rC' fer the Governor-General’s message to a committee of the House, Mr. J. A. Lee asked whether the measure was drafted similarly to the Industrial Conciliation and Arbitration Amendment Bill. Was there provision for compulsory conciliation and voluntary arbitration on the understanding that, failing an agreement, a mortgage should automatically lapse? He felt sure that it the parties could get together they would be able to settle all problems and remove hampering conditions. (Laughter.) He realised that all mortgagees were reasonable people, (Renewed laughter.) Mr. F. Langstone spoke in a similaf strain. He asked whether the first provision would enable the Government, by Order-in-Council, to cancel all mortgages which it considered were hampering industry. (Laughter.) Mr. Langstone went on to inquire whether the bill would impose flat-rate reductions in interest rates, and whether it would deal with the question of personal covenants. After other Labour members had spoken, Rt. Hon. G. W. Forbes outlined the bill. He said that it extended the provisions of the Act passed last year, which had been found to work comparatively smoothly, and which had given a fair amount of relief. Mr. W. J. Jordan: Has it been used much? Mr. Forbes: Yes; there has been a fair number of cases brought before the Court, and in addition settlements have been made outsido the Court on terms which were felt to be reasonable both by the mortgagee and the mortgagor. Continuing, Mr. Forbes said that his knowledge of those who had mortgages on farming lands led him to the belief that there had been very substantial remissions made in regard to interest and mortgages generally. In Canter bury there had been a great number of cases where it had been arranged that the proceeds of a farm should be divided up. The farmer had been allowed a certain amount with which to carry on, and the rest had gone to the mortgagee, stock and station agents, banks and anyone else interested in the farm. This course had enabled the work of farming to go on. In many cases there had been no profit coming from the farm, and the mortgagee hail had no interest at all. The Prime Minister said the bill before the House would apply to securities other than those on farm lands, including Crown mortgages. Power would bo given to the mortgagor to approach the Court, even though the mortgagee had taken no steps against him in reference to his holding. When a mortgagor appealed to the Court his case would bo referred to one of the adjustment commissions that had been set up. The commission would then make recommendations to tho Court regarding the case. Authority was also given to grant relief to lessors by way of remission or reduction of rent. This was a very much wider power than that provided under the existing legislation, and would apply to all leased premises. Mr. Walter Nash: Weekly premises? Mr. Forbes said there would have to be some permanency of tenure before the provisions of the bill applied. It would not apply to premises which were rented only for a week. There was also power for tho CouTt to review personal covenants.

Association. had their wages reduced to meet their commitments. Mr. R. McKcen said the Government had had an opportunity to do something definite, but was not making a straight-out reduction in interest. The Economy Committee had favoured a cut of 20 per cent, in interest rates and rent, but the Prime Minister had not referred to this. He thought the people would bo disappointed with the bill. Mr. W. Nash said lie was sorry to hear there was to be no general reduction in interest rates. Hon. J. G. Cobbc said that with the passing of the present bill it was believed that many mortgagors and mortgagees would be able to come to terms. Ho did not believe that a measure going as far as this bill had ever been introduced in Parliament in the history of Now Zealand. The Government’s object was not only to protect people in their homes and businesses, but also to keep the farmer on the land. The personal covenant was a very difficult question to deal with by legislation. No Act should be put into operation if it was likely to prejudice lending in, future. Mr. W. E. Barnard said he was anxious to know whether the bill made provision for a reduction in house rents. Replying further to Labour complaints that no provision had been made for a straight-out reduction in interest rates and rents, Mr. Forbes said that the bill before the House was not one in which anything could he put regarding statutory reductions of this kind. He had already told the House there would he no class in the community that would escape in connection with the general sacrifice. So far there had been no statutory reductioas at all. There, were other measures yet to come down in regard to reductions right through. Replying to Mr. R. .Semple, Mr. Forbes said that leases to renting houses would come under review in connection with the bill. The bill was read a first time.

Replying to an interjection, Mr. Forbes said that this provision would apply to land, but not to chattels. L was left to the Court to decide cases of hardship. The Court had power to reduce or Temit interest nr>n to extend the period of tho mortgage. Mr. Langstone: Is there any chance of reducing the principal? Mr. Forbes: There is no power to reduce the amount of the principle, but there is power to extend the period. It is not possible to cover every case under this bill. Continuing, Mr. Forbes said that it any attempt were made to anticipate the provisions of the bill prior to its corning into operation, the Government would take steps to deal with the position. Mr. A. S. Richards: Is any relief provided for chattel securities? Mr. Forbes: Chattel securities were dealt with under the previous Act. The only alteration in. that respect is to give them a longer time. The time has been altered from seven days to 34. Mr. Forbes added that farmers had to depend a great deal on the assistance they received from stock and station agents, and the Government did not consider that it would be wise to do anything to prevent the stock and station agents from continuing that assistance. * The leader of the Opposition (Mr. H. E. Holland) said it seemed to him that what the Government now proposed was an improvement on the existing legislation, but what disappointed him was the wide difference in the methods of dealing with the wages of working men and money lent by mortgagees and others. Ho considered that a statutory reduction in interest, rents and so forth was wanted. The Arbitration Court had had power to deal with wages, but tho Government was now taking it away. It was, however, making provision for that power to be used in connection with mortgages. The logical thing to do would be to reduce the fixed charges to enable those who had