Page moves to protect property owners’ equity
Shadow Minister for Small Business and Ballina MP Don Page has introduced private members legislation into Parliament designed to protect a property owners’ equity when they are sold up by financiers because they can’t make their mortgage repayments.
Mr Page said his legislation will impose a higher duty of care on the mortgagee in possession (financier), to ensure the property is sold for not less than its market value.
“The temptation for financiers in NSW is to sell assets with a view to ensuring their own debt is covered, with little regard to any remaining equity held by the borrower,” he told Parliament.
“Under this new legislation the mortgagee must take all reasonable care to ensure the property is sold for not less than its market value. This will help protect the borrowers’ equity interest in the property.
“This legislation is very timely because of the high level of exposure many home and business owners have especially if interest rates increase in the future.
“It will assist both homeowners and small businesses, protect the equity they’ve built up in their home or business.
“At the moment in NSW a mortgagee in possession only has to act in good faith and not recklessly or wilfully. However, under Commonwealth law the duty of care is higher, requiring them to act to obtain market value.
“In practice this means the property would have to be properly advertised for an appropriate period of time, described properly and prospective buyers with higher bids would need to be pursued.
“Queensland and the Northern Territory have legislation which requires the higher duty of care and it is time NSW property owners had their equity interest protected in a similar way.”
The legislation will now sit on the table until February next year when NSW Parliament resumes.
