Overview

This bill introduces a new type of loan security, the "goods mortgage," allowing individuals to borrow money using their movable possessions as collateral without giving up possession. It also repeals outdated Bills of Sale Acts.

Description

The bill creates a legal framework for goods mortgages, where individuals can use their personal property (excluding things like cars, ships, and aircraft) as collateral for loans. Key aspects include:

• Creation of Goods Mortgages: Individuals can create a goods mortgage through a written agreement, providing specific details about the goods and the loan. Certain types of obligations (e.g., those related to employment contracts or personal services) are excluded.
• Registration: A central register will be established to record goods mortgages, determining priority in case of multiple loans against the same assets. Registration is valid for 10 years, but is renewable.
• Rights of Mortgagors and Mortgagees: The bill sets out the rights and responsibilities of both the borrower (mortgagor) and the lender (mortgagee), including conditions for repossession, notice periods, and the mortgagor's right to terminate the agreement. Specific protections are included for those using the mortgage to secure consumer credit agreements.
• Repeal of Bills of Sale Acts: The bill repeals the Bills of Sale Acts 1878 and 1882, which are considered outdated and insufficient for modern lending practices.

Government Spending

The bill's impact on government spending is not explicitly stated in the provided text. The establishment of a central register will likely incur costs but no specific figures are given.

Groups Affected

Groups potentially affected and the impact are:

• Individuals borrowing money: This bill offers a new borrowing option, potentially improving access to credit, but also entails risks concerning the loss of the assets used as collateral.
• Lenders: The bill provides a clearer legal framework for secured lending against personal property, potentially reducing risk.
• Third parties: The bill aims to protect third-party purchasers of goods by requiring disclosure of existing goods mortgages.
• Government agencies: The government will have to manage the register of goods mortgages which will require administrative and staffing resources.

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