29OException if mortgage to be discharged

29O Exception if mortgage to be discharged

(1) Section 29M does not apply to the sale of land under a terms contract if the contract provides that—

(a) any mortgage affecting the land sold is
to be discharged as to that land before the purchaser becomes or on the purchaser becoming entitled under the contract to possession or to the receipt of the rents and profits; and

(b) the deposit and all other money payable under the contract (other than any money payable in excess of the amount required to discharge the mortgage) are to be paid to a legal practitioner, conveyancer or a licensed estate agent to be applied in or towards discharging the mortgage.

(2) If a terms contract provides for the matters in subsection (1) and the mortgage is not discharged within 90 days of the making of the contract and the purchaser is not in default under the contract—

(a) the contract is voidable by the purchaser at any time before the mortgage is discharged; and

(b) if the contract is avoided, the purchaser is entitled to recover all money paid under the contract.

S. 29P inserted by No. 6/2008 s. 33.