From 1 July 2009, the Residential Tenancies and Rooming Accommodation Act 2008 is in force.
For mortgagees exercising rights, the requirements of section 317 (if the mortgaged property is subject to a residential tenancy) and section 384 (if the mortgaged property is subject to a rooming accommodation agreement) must be observed. These sections apply when:
-
the premises are subject to a mortgage; and
-
after the premises become subject to the mortgage, a residential tenancy agreement or rooming accommodation agreement is entered into for the premises; and
-
the mortgagee has not consented to the tenancy or rooming accommodation agreement; and
-
the mortgagee, or another person appointed under the mortgage, has become entitled to obtain possession of the premises.
The new provisions stipulate the amount of notice that must be given to occupants of mortgaged properties under residential tenancies and rooming accommodation agreements.
The new notice period is 2 months in the case of a residential tenancy. If the mortgaged property is subject to a rooming accommodation agreement, the notice period is at least 30 days. There is also a mandatory form (
Form 19) which must be used by mortgagees giving notice.
A failure to follow these new procedures may create difficulties for mortgagees attempting to take possession and thereafter exercise their powers of sale. We have seen many recent instances where borrowers are prepared to litigate even the most technical points to delay and frustrate recovery of loans and the mortgagee sale process.
Should you require any further information or clarification, please call one of our team below.
The material contained in this publication is no more than general comment. Readers should not act on the basis of the material without taking professional advice relating to their particular circumstances.
