Overview

This bill repeals the outdated Bills of Sale Acts 1878 and 1882 and introduces a new type of non-possessory security, called a "goods mortgage," allowing individuals to use their goods as collateral for loans or other obligations. It also sets out the rights and responsibilities of both lenders (mortgagees) and borrowers (mortgagors).

Description

The bill establishes a "goods mortgage," a written agreement allowing individuals to borrow against the value of their movable possessions without giving up physical possession. The bill details requirements for creating such mortgages, including: the goods must exist and be owned by the borrower; the agreement must be in writing and meet specific criteria; and the obligation secured cannot be for personal services or employment contracts, unless specific "high net worth" or "business credit" conditions are met. The bill creates a register for goods mortgages, prioritizing those registered first. It outlines the rights of mortgagees to take possession of the goods under certain conditions, and the protections afforded to mortgagors including mandatory notice periods before repossession, and a right to terminate the mortgage by returning the goods. Finally, the bill repeals the old Bills of Sale Acts and makes consequential amendments to other related legislation.

Government Spending

The bill does not include specific figures on government spending. However, the creation of a new register of goods mortgages will likely require some level of government expenditure for its establishment and maintenance. The exact cost is not specified in the bill.

Groups Affected

• Individuals: This bill directly affects individuals who may wish to use their goods as collateral for loans or other financial arrangements. It provides both new opportunities for borrowing and enhanced protections against unfair repossession.
• Lenders/Mortgagees: Lenders will be affected by the new legal framework for securing loans, including the requirement for registration and adherence to the specified procedures and protections for borrowers.
• Third Parties: Buyers of goods will be affected by the disclosure requirements for existing goods mortgages. This aims to prevent innocent purchasers from acquiring goods that are already subject to a mortgage.
• Courts: The courts will have a role in resolving disputes related to goods mortgages, including applications for access to premises and orders concerning repossession.

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