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LAND TITLE ACT 1994 - SECT 189A
Limit on amounts recoverable by mortgagee
189A Limit on amounts recoverable by mortgagee
(1) This section applies if— (a) a person (the
"mortgagee" ) is recorded in the freehold land register as a mortgagee of a
lot, or an interest in a lot, under an instrument of mortgage; and
(b) the
execution of the instrument of mortgage involved, or was associated with,
fraud against a person (the
"defrauded person" ) who is or was a registered proprietor of the lot; and
Examples— 1 A person engages in fraud by executing the instrument of
mortgage, pretending to be the registered proprietor.
2 A person executes the
instrument of mortgage as registered proprietor, having first engaged in fraud
by executing an instrument of transfer, pretending to be the registered
proprietor.
(c) the mortgagee is entitled to— (i) if the lot or interest
is sold—any proceeds of the sale; or
(ii) payment of an amount under the
mortgage, if the mortgage is otherwise discharged; and
(d) if the position of
the defrauded person in relation to the lot or interest is not otherwise
rectified, the defrauded person will be entitled to compensation under
section 188 for deprivation of the lot or interest.
(2) Subsections (3) and
(4) — (a) apply to limit the interest and costs components of the proceeds
of sale or an amount that the mortgagee is entitled to under the mortgage; and
(b) apply despite anything to the contrary in the instrument of mortgage
(including any associated document).
(3) The rate of interest to be applied
for calculating the interest component for any particular day for which the
instrument of mortgage was in effect must not exceed— (a) if the rate of
interest provided for under the instrument of mortgage for the day is less
than or equal to the official cash rate for the day plus 2%—the rate of
interest provided for under the instrument; or
(b) if the rate of interest
provided for under the instrument of mortgage for the day is greater than the
official cash rate for the day plus 2%—the total of the following— (i) the
official cash rate for the day;
(ii) 2%.
(4) The costs component must be
limited to the costs incurred by the mortgagee in directly protecting the
mortgagee’s interest as mortgagee of the lot or the interest in a lot, to
the extent the costs were reasonably incurred. Examples of costs incurred in
directly protecting the mortgagee’s interest— insurance premiums, rates,
land taxes
Examples of costs not incurred in directly protecting the mortgagee’s
interest— costs of entry into possession, costs of exercising power of sale
(5) In this section—
"costs component" means costs incurred by the mortgagee in relation to the
mortgage.
"official cash rate" , for a day, means the Reserve Bank of Australia’s
official cash rate for the day.
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