THE EMERGENCY LAWS

New Zealand Herald, Volume LXIX, Issue 21253, 5 August 1932, Page 15

THE EMERGENCY LAWS

RENT AND INTEREST CASES LEGAL ADVICE TO READERS l MANY QUESTIONS ANSWERED Correspondents continue to send to the HF.nAi.D letters of inquiry regarding the application to their own particular cases of the provisions as to. rent and interest reduction contained in the National Expenditure Adjustment Act. All such inquiries are periodically submitted for consideration to an Auckland barrister, who forwards to-day a number of replies as foll6ws:— "British."—(l) Yes, you are to a reduction in your interest, assuming, of course, that your mortgage was signed before April 1, 1932. As you do not give me the exact date when your mortgage was signed I cannot be absolutely definite as to the amount. If the mortgage was signed before January 1, 1930, you are absolutely entitled to a reduction to £5 4s per cent. If it was signed after that date, but before April 1, 1932, then you are probably entitled to the same reduction, but the exact amount of the reduction will then depend upon the ruling rate on January 1, 1930. (2) Yes, you will be liable for the tax here, but you may be able to obtain a refund in England. "Puzzled Old Subscriber."—You do not give me enough details for me to advise you definitely as to the length of notice to which you are entitled. It will be sufficient, however, if you remember that you are in any case entitled to receive one month's notice under the Mortgagors' Relief Act before your mortgagee can exercise his power of sale. If you get such a notice you must make up your mind promptly whether you wish to apply for lelief, as after the month has expired you will have lost your protection. (Note. — By section 68 of the Property Law Act, in cases where a mortgagee has accepted interest under an overdue mortgage after its due date, he must give the mortgagor three months' notice of his intention to call up the principal sum before he can compel payment thereof, provided all the other covenants of the mortgage have meanwhile been properly performed by the mortgagor. In your case, however, there has apparently been a default in payment of interest, so that this clause —which may have been in your mind—will not protect you.) "Harassed."—l am afraid I cannot help you. All I can suggest is that when the cases are due to be heard you attend before the magistrate and put the matter before him. He may then disallow the additional 'costs if he thinks they should have been avoided. Mortgagor and Mortgagee "Undecided" writes.—"l lent the sum of £450 on mortgage on a property in May, .1930, for a term of three years at 6j per cent. (1) Do' I to accept a 20 per cent reduction in interest or do I come under the chattels clause ? (2) What notice am I' required to give to call up the money when due ?" Answer.—(l) Yes, you come within the Act and must reduce to £5 4s per cent. The "chattels clause" does not refer to mortgages secured on land, but to bills of sale and hire-purchase agreements. (2) the mortgage falls due -ydjj need give no notice in order to call up the "principal sum, which will become* payable without any notice on the due date. Ifthe mortgagor does not repay then', you will have to give a month's notice under the Mortgagors' Relief Act before you can exercise your power of sale. "Trained Nurse" writes:—"Some .time ago I borrowed £BOO at 8 pel 1 .cent reducible, to '7 per cent if paid within 21 days of due date. Are both rates now reducible aiiid, if so, will you please let me know exactly what I should now pay ?" Answer.—Both rates reduce as from April 1, 1932. The new rates will be £6 8s per cent, redgcible to £5 12s per cent if paid within the 21 days. You will pay, per quarter, £l2 16s, reducible to £ll 4s for prompt payment. "W'.D.R."—The fact that your first mortgagee has already made a voluntary concession will not be allowed to prejudice him. You are entitled to a 20 per cent reduction on 8 per cent—that is, your interest will now reduce to £6 8s per cent. Leases and Tenancies "Lessee ' writes.—"At the beginning of 1931 I leased a piece of land for a term of three years. I offered £4O per annum for the section, but .the owner required £44, which I agreed to pay. The land is valued for rating purposes at £750. (1) Can this be termed the unimproved value ? (2) Assuming that the property would have been leased for £44 per annum (the present rent) in January, 1930, can I now claim a reduction to £37 10s (5 per cent on unimproved value) ? (3) Does the fact that I offered £4O per annum debar me from claiming a reduction below that amount?" Answer. —You are clearly within the Act and entitled to a reduction. (1) I cannot say whether this is the "unimproved value" or not—but very probably it is the capital value. (2) On the assumption that the rent chargeable on January 1, 1930, under a similar contract would have been £44, I consider you are entitled to a "full 20 per cent reduction to £35 10s per annum. If the landlord wishes to raise the point about the 5 per cent on the unimproved value, it is for him to raise it and to prove what his unimproved value is. In the meantime, deduct the full 20 per cent. (3) Your offer does not affect your position. "Inquirer,"—l cannot tell at all from, your letter. To advise you adequately I should know the date of your lease, the rent-you are now paying under it, the unimproved value of the sections, and the rental at January 1, 1930 (as near as you can estimate it). If .you will give me this information, I will advise you further. "Forestry."—You will probably not be entitled to much reduction, though you are within t{ie Act. The principle in cases such as yours is that you are entitled to reduce to four-fifths of the rent that would have been obtainable for the property on January 1, 1930. Find out what rent would have been obtainable on that date, and take four-fifths of it. If the residue exceeds the present *ent, you are entitled to no reduction, but if such residue is less that you aro now paying, then you can reduc© to that lovel. If» y however, you have no lease (you aio not clear on this point) tho matter is really one for agreement between you and tho department; see in this connection the answer to "Square Deal" below. "Square Deal." —'lhe fact that the landlord is not getting a reasonable return does not matter. As a matter of pure law the only question to be considered is "what rent would have been obtainable for the property on- January 1, 1930?" When this hypothetical rent has been assessed, reduce it by 20 per cent, and the residue is the amount to which your rent should now reduce. If. however, you Jnave no lease (as appears to be your position) the matter becomes not so much one of law as one of ordinary business prudence. You must agree with your landlord; for if you do not, he can determine your tenancy by notice, and you will have to find another house at a rental determined by the ordinary laws of supply ajid demand. You will see thus that the matter is pre-eminently one for agreement between you.