The Land (Amendment) Act, 2004

This section replaces section 37(8) and (9) and says the Commissioner must approve certain sales of a right of occupancy without unexhausted improvement, subject to subsection (9).

This section amends the principal Act by repealing Part X and replacing it with a new Part X on mortgages.

This section says the Part applies to mortgages of land or interests in land, including certain mortgages specifically mentioned elsewhere, and defines “mortgaged land” broadly.

This section defines several terms used in the Part, including borrower, lender, matrimonial home, mortgagee, mortgagor, and third-party mortgage.

Certain occupiers and lessees may mortgage their land interests, subject to legal and instrument-based limits, and some unregistered mortgages do not give the mortgagee remedies.

A mortgage of a matrimonial home is valid only if the relevant application document is signed or assented to by the mortgagor and the spouse or spouses living in the home, and the mortgagee must take reasonable steps to check whether the applicant has a spouse or spouses.

Customary mortgages of land continue under the customary law for the land, but special steps apply if a mortgagee wants a remedy that could dispossess the mortgagor.

A mortgage counts only as security, not as a transfer of land rights; the mortgagee gets powers and remedies on default, subject to this Part.

Mortgages rank by the order they are registered or made, with special priority rules for informal, customary, and same-day mortgages.

A mortgagee may include terms for further advances or credit in a mortgage instrument, but those further advances do not get priority over later mortgages unless the register notes them or the later mortgagor agrees in writing.

A mortgagor with multiple mortgages from one mortgagee may pay off some mortgages without redeeming all, unless the mortgage instrument says otherwise.

A mortgagee must not change the interest rate under a mortgage unless notice of the change is given to the mortgagor.

The mortgagee must discharge a mortgage when the mortgagor has paid what is secured and asks for it; certain clauses trying to block that right are void.

The current mortgagor, and some other listed people, may ask the mortgagee in writing to transfer the mortgage to a named person, unless the mortgagee is in possession of the mortgaged land.

A mortgagor must not transfer, assign, lease, or sublease the right of occupancy without the mortgagee’s consent, and the Registrar must not register the transaction until written consent is produced.

This section implies standard covenants in a mortgage, requiring the mortgagor to pay sums due, maintain the land and buildings, insure against fire loss, and avoid certain transfers or leases without the mortgagee’s written consent.

A mortgagee may not foreclose the equity of redemption in mortgage land, and may not take possession of certain mortgaged land or collect its rents and profits just because of default.

If the mortgagor is in default, the mortgagee may use listed remedies over the mortgaged land.

When there is a mortgage default, the mortgagee must give the mortgagor written notice of the default.

A mortgagee may appoint a receiver of mortgaged land income, but must first notify the mortgagor and sign the appointment in writing.

A mortgagee may grant or deal with leases over mortgaged land, but must give the mortgagor notice first and follow the listed lease limits and priority rules.

A mortgagee may enter possession of mortgaged land after a section 127 notice, but must follow limits, manage proceeds as required, and certain occupiers must comply with a notice.

A mortgagee must withdraw from possession of mortgaged land if any listed trigger happens, and may not re-enter possession except by complying again with section 130.

A mortgagee may sell mortgaged land after 30 days from receiving the section 127 notice, but cannot exercise the power of sale over certain section 130 land unless a court possession order is obtained or possession is taken as prescribed.

A mortgagee selling mortgaged land must try to get the best reasonably obtainable price and cannot contract out of these rules.

A mortgagee who can exercise the power of sale may sell the mortgaged land in several ways, and if the sale is by public auction it must be publicly advertised.

People covered by this section are protected when buying mortgaged land from a mortgagee or receiver, and certain related claimants are also covered.

A mortgagee can sell the mortgaged land to himself only with court leave, and in a public auction he may bid and buy if his bid is the highest or meets the reserve price rule.

A mortgagee who sells under a power of sale must distribute the sale proceeds in a set priority order.

Before a land sale agreement is reached, the mortgagor or another person entitled to do so may discharge the mortgage by paying the secured money. If payment is made, the mortgagee must give the mortgagor a mortgage discharge and the related title documents.

In certain mortgage possession cases, the court may use section 140 powers if the mortgagor is likely to pay the debt or fix the default within a reasonable time.

Court proceedings about a mortgagee’s sale or possession powers must follow the Civil Procedure Act and be heard summarily; the court may adjourn, stay, suspend, or postpone possession-related orders, usually on conditions.

A mortgagor may apply to court to use section 142 powers if the mortgage was obtained by fraud, deceit, misrepresentation, an unlawful provision, or certain third-party undue influence.

On an application under section 141, the court may void a mortgage or order it to continue with court-ordered modifications.