Overview

The Secured Lending Reform Bill aims to improve the rights of borrowers (mortgagors) facing repossession while protecting the interests of lenders (mortgagees). It strengthens borrower protections by increasing court oversight of repossession processes and providing opportunities to address financial difficulties.

Description

This bill makes several key changes to secured lending laws:

• Limits on Receiver Powers: Restricts the powers of a receiver appointed by a lender, requiring court approval before taking actions like repossessing property or selling it.
• Abolition of Peaceable Re-entry: Eliminates the right of a lender to retake a property without court intervention.
• Enhanced Court Protection for Borrowers: Requires courts to ensure borrowers have a full opportunity to present defenses or counterclaims before a possession order is issued. The court must assess the merits of these arguments.
• Increased Court Powers: Expands the court's authority to grant stays, suspensions, or postponements of possession proceedings and to adjust mortgage terms such as interest rates and payment schedules if deemed fair.
• Repeal of Redundant Provision: Removes a section from the Agricultural Tenancies Act 1995 that is deemed unnecessary given the new provisions.

Government Spending

The bill doesn't directly specify government spending. The costs will likely relate to increased administrative burdens on courts and government agencies responsible for overseeing the implementation of regulations. No figures are provided in the bill text.

Groups Affected

• Borrowers (Mortgagors): Gain increased protection against repossession and have greater opportunities to resolve financial difficulties through court intervention and renegotiation of loan terms.
• Lenders (Mortgagees): Face restrictions on their ability to quickly repossess properties, requiring more court involvement and potentially delaying recovery of funds.
• Receivers: Their powers are significantly limited, requiring them to obtain court approval for actions previously permitted.
• Courts: Will experience increased workload due to the greater involvement required in repossession cases.

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