29SContravention of mortgage requirements

29S Contravention of mortgage requirements

(1) If land is mortgaged in contravention of section 29P, 29Q or 29R—

(a) the terms contract is voidable by the purchaser at any time before the completion of the contract; and

(b) the vendor is guilty of an offence and liable to a penalty of not more than 60 penalty units, in the case of a natural person or 300 penalty units, in the case of a body corporate; and

(c) if the mortgagee had actual or constructive notice of the interest of the purchaser under the terms contract—

(i) the mortgagee is not entitled to exercise the mortgagee's remedies under the mortgage; and

(ii) the mortgagee must execute a proper discharge of the mortgage in respect of the land sold and obtain registration of that discharge; and

(iii) any amount paid by the mortgagee to the vendor may be recovered by the mortgagee from the vendor.

(2) If land under the operation of the Transfer of Land Act 1958 is mortgaged in contravention of section 29P, 29Q or 29R—

(a) on the registration of a transfer in accordance with the section 77 of the Transfer of Land Act 1958—

(i) the title of the purchaser from the mortgagee is not impeachable on the ground that the power of sale was exercised in contravention of this section; and

(ii) for the purposes of Part III of the Transfer of Land Act 1958, the purchaser from the mortgagee is deemed to have dealt with the registered proprietor of the land; and

(b) the purchaser under the terms contract has a remedy in damages against the mortgagee for exercising the power of sale if the mortgagee had actual or constructive notice of the interest of the purchaser; and

(c) Division 9 of Part IV of the Transfer of Land Act 1958 applies, except so far as it is inconsistent with the express provisions of this section.

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