Overview

This bill introduces a new type of non-possessory security, called a "goods mortgage," allowing individuals to use their goods as collateral for loans. It also repeals the outdated Bills of Sale Acts 1878 and 1882.

Description

The bill establishes a framework for goods mortgages, defining qualifying goods (tangible, movable property excluding certain items like aircraft and currency), the requirements for creating a goods mortgage (written instrument, signed by the owner, not for excluded obligations), and registration procedures.

Creation of Goods Mortgages

Individuals owning qualifying goods can create a goods mortgage as security for an obligation, provided certain criteria are met regarding the goods' existence, ownership, and the nature of the obligation (not an obligation related to employment or personal services).

Registration and Third-Party Rights

The bill mandates a register of goods mortgages maintained by the Secretary of State. Priority is determined by registration time. The bill also outlines the owner's duty to disclose existing mortgages to purchasers or subsequent mortgagees.

Rights of Mortgagors and Mortgagees

The bill details the rights of both the mortgagor (the borrower) and mortgagee (the lender) concerning taking possession of the goods, including requirements for possession notices, and the mortgagor's right to terminate the mortgage. It sets out rules governing the mortgagee's power to sell the goods, including a five-day waiting period.

Repeals and Final Provisions

The bill repeals the Bills of Sale Acts 1878 and 1882, replacing them with the new goods mortgage system. It includes provisions for regulations and definitions.

Government Spending

The bill doesn't directly specify government spending figures. However, it will likely involve costs associated with establishing and maintaining the register of goods mortgages and associated administrative functions.

Groups Affected

• Individuals: Can use goods as collateral for loans (positive impact for those needing credit), but risk losing goods if obligations aren't met (negative impact if defaults occur).
• Lenders: Have a new mechanism to secure loans (positive impact), but with regulatory obligations (potential negative impact).
• Purchasers of goods: Need to be aware of the new goods mortgage system to avoid purchasing goods subject to unregistered mortgages (potential negative impact if unaware).
• The Secretary of State: Responsible for establishing and maintaining the register (significant administrative impact).

Powered by nyModel