12EHousing loans by trustees

12E Housing loans by trustees (1) If a trustee lends money on a real security in accordance with the provisions of this Act, or had made such a loan in accordance with the provisions of this Act as in force immediately before the commencement of section 4 of the **Trustee and Trustee Companies (Amendment) Act 1995**, the trustee is not chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property on which the loan is secured if— (a) the trustee was not expressly forbidden by the instrument (if any) creating the trust to lend money on a real security; and (b) the loan was a housing loan; and (c) the loan is secured by a contract of insurance in the prescribed form entered into with an authorised insurer. (2) The Minister may by notice published in the Government Gazette— (a) declare a corporation that is lawfully carrying on the business of insuring mortgages in Victoria to be an authorised insurer for the purposes of this section; (b) revoke a declaration made under paragraph (a). (3) The Minister may by notice published in the Government Gazette— (a) specify terms and conditions to which an authorised insurer is authorised to enter into contracts of insurance for the purpose of this section; or (b) vary or revoke any such terms and conditions. (4) An authorised insurer who fails to comply with any terms or conditions subject to which it is authorised to enter into contracts of insurance for the purpose of this section shall be guilty of an offence against this Act. 1. 50 penalty units. (5) For the purposes of this section— (a) a declaration in force under section 8A(2) of this Act as in force immediately before the commencement of section 4 of the **Trustee and Trustee Companies (Amendment) Act 1995** is deemed to be a declaration under subsection (2) of this section; and (b) terms and conditions applying under section 8A(3) of this Act as so in force are deemed to be terms and conditions applying under subsection (3) of this section— and may be revoked or varied under this section. (6) In this section— ***authorised insurer*** means a corporation that has been declared to be an authorised insurer under subsection (2); ***dwelling-house*** includes— (a) any building that consists, or any buildings that consist, in whole or in substantial part, of residential accommodation, whether constituting a single unit of accommodation or two or more such units; and (b) any residential accommodation of a kind commonly known as a flat or home unit; (c) appurtenances, outbuildings, fences and permanent provision for lighting, water supply, drainage and sewerage provided in connection with the dwelling-house; ***housing loan*** means a loan— (a) made for any one or more of the following purposes, that is to say, of enabling the borrower— (i) To acquire a prescribed interest in land and construct, or complete the construction of, a dwelling-house on the land; (ii) To construct a dwelling-house, or complete the construction of a dwelling-house, on land in which the borrower has a prescribed interest; (iii) To acquire a prescribed interest in land on which there is a dwelling-house; (iv) To alter, improve or extend a dwelling-house constructed on land in which the borrower has a prescribed interest; (v) To meet expenses or in respect of the provision or improvement of roads, kerbing, guttering or footpaths in connection with land in which the borrower has a prescribed interest; or (vi) To discharge a mortgage, charge or other encumbrance over land in which the borrower has a prescribed interest, being land on which a dwelling-house is being constructed; and (b) the repayment of which is secured by security over the interest of the borrower in the land— and, where the lender requires the borrower to meet the cost of the premium in respect of a contract of insurance entered into in respect of the loan, includes moneys advanced by the lender to enable the borrower to meet that cost, being moneys the repayment of which is secured by a security over the interest of the borrower in the land; ***prescribed interest in land*** means— (a) an estate in fee simple; (b) an interest as lessee under a lease in perpetuity from the Crown in right of the Commonwealth or the State of Victoria; or (c) an interest as lessee under a lease for a term of years from the Crown in right of the Commonwealth or the State of Victoria or from the owner of an estate in fee simple if the authorised insurer is satisfied that the term, covenants and conditions of the lease give reasonable security of tenure to the lessee for a substantial period. S. 12F inserted by No. 104/1995 s. 4.