On 3 December 2008, the Queensland Parliament urgently passed
the Property Law (Mortgagor Protection) Amendment Bill 2008 (Qld)
which amends the Queensland Property Law Act 1974.
Purpose of the Bill
The objective of the Bill is to protect the interests of
mortgagors whose properties are sold by mortgagees when exercising
their power of sale. In particular, the Bill is concerned with the
duty imposed upon mortgagees to ensure that the property is sold at
market value. This Bill has been passed due to the overwhelming
concerns engendered by the current global economic and financial
circumstances that are being felt especially by financial
institutions and struggling homeowners. In Parliament, Anna Bligh,
Premier of Queensland stated that the amendments are to protect
mortgagors from "mortgagee fire sales" where mortgagees
intentionally sell the repossessed property below the market value
to reclaim enough money to cover their own costs, but show no
regard to the interests of the mortgagor. The Queensland
Government, by strengthening the laws which relate to a
mortgagee's power of sale, are attempting to maximise the
mortgagor's ability to pay the debt and to limit the residual
debt of the mortgagor.
Currently, mortgagees who exercise a power of sale are required
to take reasonable care to ensure that the property is sold at
market value. Firstly, the Bill extends the duty of the mortgagee
so that it now caters for situations in which property is sold by a
receiver under a delegated power or by the mortgagee who is acting
as attorney for the mortgagor.
The Bill specifies the steps which need to be taken in order for
the mortgagor of a prescribed mortgage to satisfy the duty. Under
the amendments, unless they have a reasonable excuse, the mortgagee
or receiver must:
adequately advertise the sale;
obtain reliable evidence of the property's value;
maintain the property, including by making reasonable
sell the property by auction, unless it is appropriate to sell
it in another way; and
do anything else prescribed under a regulation.
The Bill also provides that mortgagees who fail to comply with
this duty will face fines of up to $20,000.00.
The amendments do not apply to a mortgagee or receiver if,
immediately prior to the commencement, the mortgagee was entitled
to exercise the power of sale.
The bottom line for all mortgagors and receivers is that they
must strictly comply with the steps set out in the amendments or
otherwise be liable for a significant penalty. In addition, these
new provisions apply to all mortgages, including those which exist
prior to the commencement of the new legislation, thus the extended
duty and legislated requirements for its fulfillment will apply to
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).