A MEASURE OF RELIEF

Wanganui Chronicle, Volume LXXXIII, Issue 19989, 4 November 1927, Page 7

A MEASURE OF RELIEF

MORTGAGEES’ INDEMNITY NEW BILL BEAD A FIRST TIME (Per Pres* Association.) WELLINGTON, Nov. 3. By Governor-General’s Message, the Mortgagee Indemnity (Workers’ Charges) Bill was introduced in the House of Representatives to-night. The Hon. F. J. Rolleston (Minister of Justice) made the following explanation: “This Bill deals with a matter which has for many years been the subject of grievance with mortgagors of both town and country properties. When the Workers’ Compensation Act came into force in 1900, it contained a provision that in certain cases, a worker’s claim for compensation should be a charge on the land of the employer, and that this charge should take precedence of any mortgages. Mortgagees’ security would therefore be affected by the existence of such a charge, and in order to protect themselves against this charge, it has been the practice for mortgagees to insist that their mortgagors should take out an insurance policy indemnifying them against any such charge taking priority of their mortgage. “The premiums payable for this insurance, called mortgagee indemnity insurance, vary from a minimum of 5/to amaximum of £2, according to the amount of the mortgage. Where a mortgagor has his workers insured against accident, as nearly everyone has nowadays, it is obvious that there is no risk to the mortgagee under this particular clause, and even if there were no insurance, the risk of the mortgagee suffering any injury would be very small. “Since the year 1900, the number of cases in which the charge has been placed on the land ahead of a mortgage has been very small—l have heard of only one. Consequently, mortgagors have felt aggrieved at having to pay this annual charge, and the question of some relief being granted has been raised several times in the House.

‘ ‘ This Bill provides a cheap and inexpensive method of meeting the position and of protecting the mortgagee. Under the Stamp Act every mortgage has to be stamped with 2s 6d stamp duty when it is executed and also with a similar duty when it is released. It is proposed by this Bill that in regard to mortgages hereafter executed, the mortgagor, on presenting 'his mortgage for stamping, shall pay also a mortgagees indemnity fee of Is, which will be handed over to the Registrar-General of Lands and will form part of the Land Insurance Fund. This fund, wihich at the present time amounts to about £Bl,OOO, wiD then be available for indemnifying the mortgagee against any claims under the Workers’ Compensation Act.

“In regard to mortgages executed prior to the passing of the indemnity is given and in this case the mortgagor will pay an additional Is when he presents the discharge of his mortgage for stamping. The result is therefore, that by payments of Is every mortgagor in the country will have his mortgage insured against this liability for as long as his mortgage is in force. It is estimated that the annual sum whch will be about £4OOO. In addition to this annual sum, the amount at the credit of the fund is available.” Mr H. E. Holland (Leader of the Opposition) said this was another instalment of Socialistic legislation.

Mr Rolleston said it was an instalment of very useful legislation and the Bill was read a first time.