MORTGAGE RELIEF

Te Awamutu Courier, Volume 53, Issue 3830, 6 November 1936, Page 7

MORTGAGE RELIEF

RATES A FIRST CHARGE ON THE LAND. SECURITY UNIMPAIRED. The effect of the Mortgagors and Lessees Rehabilitation Act recently passed by Parliament on debts for overdue rates is referred to by the Justice Department in a letter received by the New Zealand Counties’ Association. The association inquired whether a local authority should take steps to obtain judgment for any overdue rates during the currency of a stay order in order to preserve its rights. The department has replied as follows: “There was no statutory prohibition to the taking of steps to obtain a judgment for overdue rates; in fact, many local authorities had recourse to this step to prevent their debts becoming statute barred. The Act precluded proceeding to execution during the period ot a stay order. “The whole position has been changed by the new legislation, the Mortgagors and Lessees Rehabilitation Act. Under this Act the stay order system has been abolished. The security for rates has been unimpair ed as they remain a first charge on the land. The new Act, during the period of protection, does not allow court proceedings to be cpmmenced, but against this it is expressly provided that time does not run for the purpose ot statutory limitation for this period. Rates are deemed to be an ‘adjustable security,’ but as the customary order of priority has not been disturbed they will rank in priority to all mortgagees and are likely to be secure in every case.” SOLDIER SETTLERS’ RATES. In reply to a remit passed by the executive of the association urging that in the budgetary account of soldier settlers county rates be made a first charge after living expenses, the Department of Lands states that it appreciates the desirability ot assisting local bodies in the collection ot rates, but it is not prepared to go so far as to adopt a general rule that county rates should be made a first charge after living expenses. “The general practice where soldier settlers’ accounts are under departmental budgetary control is to arrange for living and farming expenses as first charges on farm revenue,' fhe department adds, “and for any revenue surplus at the end of each season to be distributed on a pro rata basis among the creditors (including local bodies) having legitimate charges against land and stock. This method of distribution is considered to be equitable in that the net farming revenue is distributed among all creditors who have legitimate claims. The department could not agree to an arrangement which might involve payment of rates from capital moneys." LIABILITY FOR RATES. The executive also passed a remit asking the Government to consider seriously the question of the Crown accepting liability for rates as mortgagee in the same manner as a private mortgagee, and to this the Prime Minister, Rt. Hon. M. J. Savage, has replied as follows: “The question of the Crown accepting liability for rates as mortgagee was discussed by me with my colleague the Hon. W. Nash prior to his departure from New Zealand for England. Full consideration was given to the representations made by your association and by various individual counties, but t has been decided that the circumstances do not, at the present at all events, justify the Government in acceding to the request that it should, as mortgagee of privately owned property, accept any greater liability for rates than is imposed on it under the existing law.”