When a mortgagor is a corporation, section 420A of the Corporations Act 2001 (Cth) also applies. Now the Queensland Parliament has amended section 85 of the Property Law Act to apply section 420A to mortgagors of Queensland land who are individuals so that receivers of companies holding Queensland mortgages must sell at market value for all mortgagors, both corporate and individual.
The Property Law (Mortgagor Protection) Amendment Act 2008 also now requires that, unless they have a reasonable excuse, mortgagees or receivers selling property secured by consumer credit mortgages must:
- adequately advertise the sale; and
- obtain reliable evidence of the property’s value; and
- maintain the property, including by undertaking any reasonable repairs; and
- sell the property at auction unless it is appropriate to sell it in another way; and
- do anything else prescribed by regulation (there is nothing prescribed at this stage).
Failure to comply with the above can result in a maximum penalty of $20,000.
The amendment does not apply to mortgagee or receiver sales if they were entitled to exercise of power of sale before the Act commenced but otherwise applies to both existing and new mortgages.