Part 12Mortgages, encumbrances, and discharges

Part 12—Mortgages, encumbrances, and discharges 128—Mortgage of land (1) If land is to be charged or made security in favour of a person, a mortgage must be executed by the registered proprietor and the person. (2) A mortgage lodged for registration in the Lands Titles Registration Office must be in the appropriate form. (3) Certification required under section 273(1) in relation to a mortgage lodged for registration in the Lands Titles Registration Office must be provided by the mortgagee. (4) If certification under section 273(1) is provided by a mortgagee in relation to a mortgage lodged for registration in the Lands Titles Registration Office, the mortgage will be taken, for the purposes of this section, to have been executed by the mortgagee. (5) The Registrar‑General may register a mortgage lodged for registration in the Lands Titles Registration Office that is executed solely by the mortgagee— (a) if the Registrar‑General is satisfied that a mortgage on the same terms as the mortgage lodged for registration (the corresponding mortgage) has been executed by the mortgagor as required under subsection (1) and retained by the mortgagee; and (b) in a case where the mortgagee is not an ADI—if certification required under section 273(1) in relation to the mortgage has been provided— (i) by a legal practitioner or a registered conveyancer; or (ii) if the Registrar‑General has given written approval for another person to provide the certification—by that person. (6) If the Registrar‑General registers a mortgage that is executed solely by the mortgagee, the corresponding mortgage— (a) must be retained by the mortgagee until he or she ceases to be mortgagee; and (b) if the mortgage is transferred under section 150—must be given to the transferee. (7) If a mortgage is transferred under section 150, the corresponding mortgage must be retained by the transferee until he or she ceases to be mortgagee. (8) This section only applies to land intended to be charged or made security under this Act by the registration of a mortgage. (9) To avoid doubt, the execution of an instrument under this section is not required to be witnessed. 128A—Obligations of mortgagee (1) A person must not enter into a mortgage as mortgagee without first verifying the authority of the intended mortgagor to enter into the mortgage in accordance with the verification of authority guidelines. (2) A mortgagee must retain a copy of any document used for the purpose of fulfilling his or her obligations under subsection (1) for the period prescribed by the regulations. (3) This section does not apply in relation to a mortgage that is not intended to be lodged for registration in the Lands Titles Registration Office. 128B—Encumbrance of land (1) If land is to be charged with, or made security for, the payment of an annuity, rent-charge or sum of money in favour of a person, an encumbrance in the appropriate form must be executed by the registered proprietor and the person. (2) This section only applies to land intended to be charged or made security under this Act by the registration of an encumbrance. 129—Contents of mortgage or encumbrance (1) Every mortgage or encumbrance to which section 128 or 128B applies must, for description of the land intended to be dealt with, refer to the certificate of the land, or give such other description as may be necessary to identify the same, and contain an accurate statement of the estate or interest intended to be mortgaged or encumbered. (2) Where, in any such mortgage or encumbrance— (a) the rate of interest, the manner of repayment of the principal sum and interest or any other term that, in the opinion of the Registrar-General, relates to the substance of the transaction is determined by reference to some other document; or (b) the mortgagor or encumbrancer is required to— (i) build in accordance with any plans and specifications which are in existence at the date of the mortgage or encumbrance; or (ii) do or refrain from doing any other act or thing by reference to some other document and the requirement is not, in the opinion of the Registrar-General, adequately set forth in the instrument lodged for registration, the Registrar-General may require that a copy of the plans and specifications or the document concerned be attached to the mortgage or encumbrance or be deposited in the General Registry Office or in any other public registry in the State. 129A—Standard terms and conditions of mortgage or encumbrance (1) A person may deposit for filing in the Lands Titles Registration Office a document containing terms and conditions for incorporation as standard terms and conditions in mortgages or encumbrances under this section. (2) A mortgage or encumbrance may provide that standard terms and conditions, as contained in a document deposited in the Lands Titles Registration Office under subsection (1)— (a) are incorporated in the mortgage or encumbrance; or (b) are incorporated in the mortgage or encumbrance subject to exclusions or amendments specified in the mortgage or encumbrance, and, in that event, the mortgage or encumbrance has effect as if those terms and conditions were (subject to any exclusions or amendment specified in the mortgage or encumbrance) contained in the mortgage. (3) Where a mortgage or encumbrance makes provision for incorporation of standard terms and conditions (either with or without exclusions or amendments), the mortgagee or encumbrancee must, before execution of the mortgage or encumbrance by the mortgagor or encumbrancer, provide him or her with a copy of the standard terms and conditions. (4) Non-compliance with subsection (3) does not affect the validity or effect of a mortgage or encumbrance. 130—Covenant to be implied in every mortgage In every mortgage and encumbrance there shall be implied a covenant by the mortgagor or encumbrancer with the mortgagee or encumbrancee that he will repair and keep in repair all buildings and other improvements erected and made upon the mortgaged or encumbered land, and that the mortgagee or encumbrancee may, at all convenient times, until the mortgage or encumbrance be redeemed, be at liberty, with or without surveyors or others to enter into and upon such land to view and inspect the state of repair of such buildings and improvements. 130A—Implied covenant in encumbrance In every encumbrance executed after the twenty-third of December, 1893, unless it is therein otherwise provided, there shall be implied a covenant by the encumbrancer with the encumbrancee that he will pay the annuity, rent-charge or other sum of money thereby secured at the times and in the manner therein mentioned. 131—Subsequent mortgagees or encumbrancees, may redeem prior mortgages etc In case the money secured by any mortgage or encumbrance shall be due, and the mortgagee or encumbrancee shall require payment of the same, it shall be lawful for any other mortgagee or encumbrancee of the same land to tender and pay to the mortgagee or encumbrancee requiring such payment, the money due upon his security, and the mortgagee or encumbrancee making such payment shall be entitled to a transfer of the estate and interest of the mortgagee or encumbrancee requiring such payment. 132—Nature of mortgage and encumbrance, and procedure in case of default Every mortgage and encumbrance under this Act shall have effect as a security, but shall not operate as a transfer of the land thereby charged and in case default be made in the payment of the principal sum, interest, annuity, or rent-charge, or any part thereof thereby secured, or in the observance of any covenant therein expressed or implied, and such default be continued for the space of one month, or for such other period of time as may therein for that purpose be expressly limited the mortgagee or encumbrancee may give to the mortgagor or encumbrancer notice in writing to pay the money then due or owing on such mortgage or encumbrance, or to observe the covenants therein expressed or implied, as the case may be, and that sale will be effected if such default be continued, or may leave such notice on the mortgaged or encumbered land, or at the usual or last known place of abode in South Australia of the mortgagor or encumbrancer. 133—Power of sale If such default be continued for the further space of one month from the date of such notice, or for such other period as may in such instrument be for that purpose limited, the mortgagee or encumbrancee is hereby authorised and empowered to sell the land so mortgaged or encumbered, or any part thereof, and all the estate and interest therein of the mortgagor or encumbrancer, and either altogether or in lots, by public auction or by private contract, or by both such modes of sale, and subject to such conditions as he may think fit, and to buy in and resell the same without being liable for any loss occasioned hereby, and to make and execute all such instruments as shall be necessary for carrying the sale thereof into effect. 134—Mortgagee's receipt to discharge purchaser All sales contracts, matters, and things authorised by the last preceding section shall be as valid and effectual as if the mortgagor or encumbrancer had made, done, or executed the same, and the receipt or receipts in writing of the mortgagee or encumbrancee shall be a sufficient discharge to the purchaser of the land, or any portion thereof, for so much of his purchase-money as may be thereby expressed to be received; and no such purchaser shall be answerable for the loss, misapplication, or non-application, or be obliged to see to the application of the purchase-money by him paid, nor shall he be concerned to inquire as to the fact of any default, or notice having been made or given, as aforesaid. 135—Appropriation of proceeds The purchase-money to arise from the sale of any such land shall be applied: First—In payment of the expenses occasioned by such sale: Secondly—In payment of the moneys which may then be due or owing to the mortgagee or encumbrancee: Thirdly—In payment of subsequent mortgages or encumbrances, if any, in the order of priority; and the surplus, if any, shall be paid to the mortgagor or encumbrancer, as the case may be. 135A—Mode of payment of encumbrance (1) All moneys which by reason of any sale by an encumbrancee or otherwise shall become applicable to the payment of an encumbrance shall be applied firstly in payment of the moneys then actually due to the encumbrancee, and if the encumbrance shall not then be satisfied the surplus shall be paid to the Public Trustee who shall invest the same upon Government securities or upon loan to the Treasurer and shall hold such surplus and the investments and income thereof upon trust to satisfy the accruing payments of the annuity, rent-charge, or other sum of money secured by the encumbrance and subject thereto for the person entitled to such moneys after payment of the encumbrance. (2) This section shall take effect as though inserted in this Act on the passing thereof. 136—Transfer upon sale by mortgagee or encumbrancee (1) Upon the registration of a transfer by a mortgagee or encumbrancee exercising the power of sale conferred by this Act the estate or interest of the mortgagor or encumbrancer passes to the transferee— (a) freed and discharged from the mortgage or encumbrance and from all estates, interests and rights to which the mortgage or encumbrance has priority, but— (b) subject to all estates, interests and rights that have priority to the mortgage or encumbrance. (2) The registration of a transfer by a mortgagee or encumbrancee exercising the power of sale conferred by this Act is not prevented by a caveat or an instrument that has effect as a caveat where the caveat or the instrument relates to an estate, interest or right to which the mortgage or encumbrance has priority and, upon registration of the transfer— (a) any such caveat; and (b) the registration of any such instrument that has effect as a caveat, shall be deemed to have been cancelled. (3) This section shall be deemed to have had effect from the commencement of this Act. 137—Power of mortgagee to enter, take possession, distrain, let, or bring action for recovery of land The mortgagee or encumbrancee, upon default in payment of the principal sum, interest, annuity, or rent-charge, secured by any mortgage or encumbrance, or any part thereof, may enter into possession of the mortgaged or encumbered land and receive the rents and profits thereof, or may distrain upon the occupier or tenant of the land under the power hereinafter contained, or may from time to time let the said land for any term not exceeding one year, or may bring an action for recovery of the land either before or after entering into the receipt of the rents and profits, or making any distress as aforesaid, and either before or after any sale of the land shall be effected under the power of sale given or implied in his mortgage or encumbrance. 138—Power of mortgagee to distrain on tenant or occupier for arrears not exceeding the amount of rent due Besides his remedy against the mortgagor or encumbrancer, every mortgagee or encumbrancee shall be entitled after the principal sum, interest, annuity, or rent-charge shall have been in arrear for twenty-one days, and after seven days shall have elapsed from the date of application for the payment thereof to the occupier or tenant, to enter upon the mortgaged or encumbered land, and distrain upon the goods and chattels of such occupier or tenant for such arrears to an amount not exceeding the rent then due from such occupier or tenant to the mortgagor or encumbrancer, and to dispose of the goods and chattels so distrained upon in like manner as landlords may do in ordinary distresses for rent, and out of the proceeds to retain the moneys distrained for, and all costs and expenses occasioned by such distress and sale; and any amount paid by the occupier or tenant to the mortgagee or encumbrancee, or realised by distress as aforesaid, shall be deemed pro tanto a satisfaction of the said rent. 139—Duty of mortgagee of leasehold entering into possession of rent and profits to account Any mortgagee or encumbrancee of leasehold land, or any person claiming any such land as a purchaser or otherwise, from or under such mortgagee or encumbrancee, shall, after entering into possession of the land, or receiving the rents and profits thereof, during such possession, or receipt, and to the extent of any rents and profits which may be received by him, become and be subject and liable to the lessor of the land, or the person for the time being entitled to the lessor's estate or interest therein, or entitled to receive the rent reserved to such lessor to the same extent as the lessee was subject and liable prior to such mortgagee, encumbrancee, or other person entering into the possession of the land, or the rents or profits thereof. 140—Application by mortgagee to Registrar-General for foreclosure (1) When default has been made for six months in the payment of the principal or interest secured by any mortgage, the mortgagee may make application, in writing, to the Registrar-General for an order for foreclosure. (2) Such application shall state that such default has been made as aforesaid, and that the land mortgaged has been offered for sale at public auction by a licensed auctioneer, after notice given to the mortgagor, as in this Act or by the mortgage provided; that the amount of the highest bid at such sale was not sufficient to satisfy the money secured by such mortgage, together with the expenses occasioned by the attempted sale; and that notice in writing of the intention of the mortgagee to make such application has been served on the mortgagor, by being given to him or by being left on the mortgaged land, or by the same being sent through the post office by a registered letter directed to him at his address appearing in the Register Book; and also that a like notice of such intention has been served on every person appearing by the Register Book to have any estate or interest in the mortgaged land, subsequently to such mortgage, by being given to him or sent through the post office by a registered letter directed to him at his address appearing in the Register Book; and such application shall be accompanied by a certificate of the licensed auctioneer by whom such land was put up for sale, and such other proof of the matters stated by the applicant as the Registrar-General may require; and the statements made in such application shall be verified by declaration. 141—Procedure on foreclosure application The Registrar-General shall cause notice to be published in the Government Gazette, offering the land for sale; and shall in such case limit and appoint a time, not less than one month from the date of the publication in such Gazette, upon or after which the Registrar-General may issue to the applicant an order for foreclosure, unless in the interval a sufficient amount has been realised by the sale of the land to satisfy the principal and interest moneys due, and all expenses occasioned by the attempted sale and by the proceedings for foreclosure. 142—Effect of order for foreclosure Every such order for foreclosure shall be under the hand of the Registrar-General, and be entered in the Register Book, and shall when so entered have the effect of vesting in the mortgagee all the estate and interest of the mortgagor in the land mentioned in such order, free from all right and equity of redemption on the part of the mortgagor, or of any person claiming through or under him subsequently to the mortgage so foreclosed, and upon such entry the mortgagee shall be deemed the registered proprietor of the said estate and interest. 142A—Provision for case where mortgagee or encumbrancee refuses to join in proceedings on default (1) Where two or more persons are registered as mortgagees or encumbrancees under the same mortgage or encumbrance, and such default has been made in payment of any money due under the mortgage or encumbrance or in the performance of any covenant in the said mortgage or encumbrance expressed or implied as entitles the mortgagees or encumbrancees to exercise any of their rights or remedies under this Act or under the mortgage or encumbrance, and any such mortgagee or encumbrancee fails or refuses to join in giving any notice, making any application or doing any other act or thing for the purpose of enforcing any of the said rights or remedies, the Court may, on the application by originating summons of any other mortgagee or encumbrancee and on any terms and conditions which it thinks just— (a) appoint any one of such mortgagees or encumbrancees or any other person to exercise on behalf of the mortgagees or encumbrancees such of the said rights or remedies as the Court thinks proper; (b) give any directions as to the mode of exercising the said rights or remedies and as to any other matters incidental thereto. (2) Any document executed by any person so appointed shall, for the purposes of this Act, but subject to the terms of the order, have the like effect as if executed by the mortgagees or encumbrancees. 143—Discharge of mortgages and encumbrances (1) A mortgage or encumbrance may be wholly or partially discharged by instrument in the appropriate form and executed by the mortgagee or encumbrancee. (2) Where 2 or more mortgagees or encumbrancees are entitled jointly, the discharge may be executed by 1 on behalf of all of them. 144—Partial discharge of mortgage or encumbrance on grant of easement Where— (a) an easement is granted over land that is subject to a mortgage or an encumbrance; and (b) the mortgagee or encumbrancee has endorsed his or her consent to the easement on the instrument granting the easement, the mortgage or encumbrance is partially discharged so that it is subject to the easement. 145—Entry of satisfaction of annuity Upon the proof of the death of the annuitant, or of the occurrence of the event or circumstance upon which, in accordance with the provisions of any encumbrance, the annuity or sum of money thereby secured shall cease to be payable, and that all arrears of the said annuity or money have been paid, satisfied, or discharged, the Registrar‑General shall make an entry in the Register Book noting that such annuity or sum of money is satisfied and discharged, and shall cancel the encumbrance; and upon such entry being made in the Register Book, the land comprised in the encumbrance shall cease to be subject to or liable for such annuity or sum of money. 146—Discharge of mortgage by Minister in certain cases (1) Where all moneys secured by a mortgage have been paid by the mortgagor and the mortgagee— (a) is dead; or (b) cannot be found; or (c) is incapable of executing a discharge of the mortgage; or (d) has, in the opinion of the Minister, refused to execute a discharge of the mortgage without sufficient reason, the Minister may execute a discharge of the mortgage. (1a) The Minister must not execute a discharge of mortgage pursuant to subsection (1)(d) unless— (a) the Registrar-General has sent by registered post to the mortgagee at their last known address a notice stating that the Minister proposes to discharge the mortgage pursuant to subsection (1)(d) at the expiration of the prescribed period unless the mortgagee establishes to the satisfaction of the Minister that the mortgagee is justified in refusing to execute a discharge of the mortgage; and (b) the prescribed period has elapsed since the notice was sent. (1b) The prescribed period is— (a) in a case where the notice is addressed to the mortgagee within Australia—one month; (b) in any other case—two months. (2) The Minister may receive moneys on behalf of a mortgagee, or the estate of a mortgagee, who— (a) is dead; or (b) cannot be found; or (c) is incapable of executing a discharge of the mortgage; or (d) has, in the opinion of the Minister, refused to accept payment under the mortgage without sufficient reason, and any moneys so received shall, for the purposes of this section, and the mortgage, be deemed to have been paid to the mortgagee. (3) Any moneys received by the Minister under subsection (2) of this section shall be held by him upon trust for the mortgagee or other person entitled thereto. (4) Subject to subsection (5) of this section, a discharge of mortgage executed under this section shall have the same effect as a discharge executed by the mortgagee. (5) A discharge of mortgage executed under this section shall not operate as a discharge of the personal covenants of the mortgage. 147—Cancellation of registration of mortgage by Registrar‑General (1) The Registrar‑General may cancel the registration of a mortgage if— (a) the person by or on whose behalf the mortgage was signed or executed as mortgagor (the purported mortgagor) is not the registered proprietor of land subject to the mortgage; and (b) the mortgagee— (i) failed to comply with a requirement under this Act or the Electronic Conveyancing National Law (South Australia) to verify the purported mortgagor's identity or authority to enter into the mortgage; or (ii) if the mortgage was transferred to the mortgagee—failed to comply with a requirement under this Act to establish that the transferor complied with an obligation imposed on the transferor, as mortgagee, to verify the purported mortgagor's identity or authority to enter into the mortgage. (2) The Registrar-General may cancel the registration of a mortgage that is executed solely by the mortgagee if the mortgagee is unable to produce, at the request of the Registrar‑General, the corresponding mortgage required to be retained by the mortgagee under section 128. 148A—Entry in Register Book where rights of mortgagee barred by Statute (1) If the Registrar-General is satisfied that the mortgagor of any land is in possession thereof and that the rights of the mortgagee to bring an action for the money secured by the mortgage are barred by the Limitation of Actions Act 1936, the Registrar‑General, with the concurrence of a legal practitioner, may make an entry in the Register Book noting that the rights of the mortgagee are barred by Statute. (2) Upon the making of an entry in the Register Book pursuant to this section the mortgage shall be deemed to be discharged. 150—Transfer of mortgage, lease and encumbrance A registered mortgage, lease or encumbrance may be transferred by execution of a transfer in the appropriate form. 151—Effect of such transfer Upon such transfer or other instrument being registered, the estate or interest of the transferor, as set forth in the instrument transferred, with all rights, powers, and privileges thereto belonging or appertaining, including the right to sue upon and recover in his own name any debt, sum of money, annuity, or damages, under such transferred instrument, shall pass to the transferee, and such transferee shall, while he remains the registered proprietor of such estate or interest, be subject to and liable for all and every the same requirements and liabilities to which he would have been subject and liable if named in the transferred instrument originally as mortgagee, lessee, or encumbrancee. 152—Covenants implied in transfer of lease In every transfer of a lease there shall be implied a covenant by the transferee with the transferor, thenceforth to pay the rent by the lease reserved, and to perform and observe all the covenants in the lease contained or by this Act declared to be implied therein on the part of the lessee to be performed and observed, and to indemnify and keep harmless the transferor against all actions, claims, and expenses in respect of the non-payment of such rent, or the breach or non-observance of such covenants or any of them. 152A—Obligation of transferee if mortgage transferred (1) A person must not execute a transfer of a mortgage, as transferee, without first taking reasonable steps to establish that the transferor complied with any obligation imposed under this Act on the transferor, as mortgagee, to verify the mortgagor's identity or authority to enter into the mortgage. (2) A transferee must retain a copy of any document used for the purpose of fulfilling his or her obligations under subsection (1) for the period prescribed by the regulations.