MANY CHANGES

Poverty Bay Herald, Volume LXIII, Issue 19124, 19 September 1936, Page 15

MANY CHANGES

MORTGAGE LEGISLATION AMENDMENTS TO BILL EXTENSION "015 SCOPE CLOSING- DATE ALTERED (Per Press Association.) WELLINGTON, (Ids day. In the House of .Representatives today, the following amendments were illtroctuced to the. Mortgagors and Lessees Rehabilitation Hill by the Hon. W. Nash. The term oi applicant has heeu extended to include a guarantor as well as mortgagor and lessee. This makes a guarantor an ordinary applicant who is entitled to an adjustment to the same extent as a mortgagor or lessee This alteration is advisable because flic definition of mortgagor has been, restriccd to a person who at present owns property as distinct from a person who signed a mortgage and then, transferred the, property. The latter is now included in the, definition of guarantor. It is made dear that if a sub-lessee is in occupation he is also covered by the bill. Another amendment makes it clear that a lessee under a lease containing an option, to purchase can bo dealt with as a mortgagor only when he has exercised the option,, except where a, lessee was subject to the relevant section iu the .Mortgagors and Tenants Relief Act, 1933. Lessees of the latter class arc deemed to have notified their intention to exercise the option and are, therefore, mortgagors for the purpose of the bill. A new sub-clause brings deferred payment licenses within the scope of the bill as agreements for sale and purchase. Consequent oil the new definition of mortgagor, the owner of an equity of redemption in any property is deemed to be the owner of the properly. TIME FOR APPEALS

A new clause has the effect of negativing several decisions by vvhch it has been held that when judgment has been obtained for moneys' owing under mortgage or lease, the liability of the debtor no" longer arises out of the mortgage or lease, but only out of the judgment. The effect of these, decisions was to disentitle debtors to relief, and the position in this respect is now altered accordingly. .Decisions of the court have also declared that a mortgagor is not entitled to relief after a mortgagee has exercised his power to sell. That position is also altered by an amendment to the bill whicli now gives mortgagors the right to obtain relief in the circumstances outlined.

There is a further provision that a lessee may.apply for relief in respect of his lease nowithstandihg the fact that the lease may have been determined, or may have expired. In order to avoid a. possibility of hardship to any party to proceedings before an adjustment commission, an additional soven days has been added to the time allowed for the, lodging of an appeal to the Court of Review against the decisions of the commission. Guarantors have been included in the definition of the term applicant iu the bill, which now enables a guarantor to make, application for the same adjustment that can he granted lo mortgagors and lessees.

One of the most important, amendments is that extending the final date by which applications for an adjustment must lie lodged from December 31 this year lo January 31 next year. PERSONAL LIABILITIES

A sub-clause in the original bill dealt with the requirements imposed on a mortgagor or lessee on whom a copy of an application had been served, and it provided that a mortgage or lease would automatically cease to be subject to the legislation if tin; mortgagor or lessee failed to file statements required by an adjustment commission within the specified period of 21 days. The commissions are now given discretion to order whether or not- a mortgage or lease should cease to be covered by the legislation. Attention has been paid in the amendments to the possibility that, although a mortgagor may take no interest whatever in the. adjustment of his liabilities, some other creditor, such as a second mortgagee, may be vitally concerned to have the matter dealt, with by an adjustment commission. Under a new subclause the commission may in such cases proceed with an adjustment and in the exercise of its powers, including its power to sell the property of a mortgagor to any of the mortgagees or creditors. Another amendment makes it clear that although the personal liability for moneys owing under a mortgage is discharged, a mortgagee does not thereby lose any of the rights against the land itself. The commission is now enabled, jfo raise moneys for any purpose that would increase tho value of an applicant's farm lands. PROTECTION FROM RATES An important provision is made regarding tho personal covenant. .If a mortgagee does not serve a- guarantor, who includes a mortgagor who is not now the owner of the property, before December 31, 1936, with notice that, he holds him liable as guarantor, and staling that tho guarantor can make application for an adjustment not later than January 31, 1937, the liability of the guarantor is entirely discharged. _ If the mortgagee does not serve this notice, the guarantor is liable under tho guarantee, and unless ho applies before January 31, 1937, for an adjustment of his liabilities ho will lose protection of any relief legislation. The discharge of a guarantor does not affect the mortgagee's rights against any land secured in his mortgage. An amendment extends the last dale on which applications for relief can be made from December 31, 1936, to January 31, the Court of Review having power to extend the dale still further to February 28. A new clause protects mortgagor, lessee and guarantor from action by a rating authority to sell or lease a property for arrears of rales, and the protection is extended to the mortgagee or lessor for a period until January 31, 1937, or the finish of the adjustment. Applicants In the court are still restrained from disposing of properly or of obtaining credit without disclosing the fact that they are applicants, but an additional offence, is provided if he docs not fulfil this obligation, and ho will be liable to the penalties to which he would be liable under the Chattels Transfer Act, 1924. RESTRICTION ON SALES

A commission will now have power to cancel or vary orders on milk cheques and similar assignments executed before or after the passing of the Act. Where the property which has been subject to an adjustment is occupied by a tenant who is a lessee of the mortgagee in possession, the court is empowered to order possession to be given to the mortgagee. The tenant will retain any protection he has under the Fair .Rents Act.

Many applications have already been made for the revaluation of rural Crown lands, and the bill has been amended to provide that, such applications! .for revaluation shall be deemed to be applications under the bill.

Provision has been embodied restrict' ing the sale of laud in respect, of which an adjustment has been made, and without special leave of the court no sale may bo made before January 1, 1941. In granting leave to sell a property, the court may require a mortgagor to pay into court such portion of the salo price as the court thinks equitable, having specially in view improvements made to the land since tho date of the adjustment, and this money'is to go to the creditors.

The previous legislation omitted to embrace family protection orders and orders for alimony where terms of a deed, etc.. were modified on the grounds that there was a hardship to the person making tho payment. The bill extends the date under which this provision operated to March 31, 1937, and brings these orders into line with similar orders. OPPOSITION PROTESTS The court is given power to vary pooling agreements made before the 1933 Act and still in existence in tho same way as it can vary orders. Tho court is also empowered to vary orders made under the, 1933 Act. A new provision is included by which (ho trustee or provisional trustee appointed under the 1935-36 Act is retained in office. Tho lit. Hon. J. G. Coates (Nat.. Kaipara) took exception to tho policy of tho Government in making changes } n various bodies in order to favour its friends. lie urged, in the interests of sounj.l administration, that there should be. no interference with the mortgage adjustment committees. Mr. Nash said that tin; whole test. was competence, and there would be no changes except on those, grounds. Tho Government must have, the- right to control those appointments. A division was called on. the siib-clnnse providing (hat members of the court would vacate office on the passing of tin' bill. Mr. Coates moved to have the sub-clause deleted, but it was retained bv 41 voles to 13.

'Mr. W. J. Poison (Nat,, Stratford) moved an amendment to delete the clause, which abolished' tho mortgage adjustment commissions.

Tho luncheon adjournment was taken at this stage. ,