Mortgagee sales and “best price”

Posted by Benefitz Admin on July 10 2012 in News

There have been record numbers of mortgagee sales in recent times. However, there has seemingly also been an increased appetite or facility by mortgagors to challenge mortgagees in terms of their “best price” obligations.

That is, there has been a rise in the number of cases recently brought under section 176 of the Property Law Act 2007. Under section 176, a mortgagee owes a duty of reasonable care to current and former mortgagors, covenantors, and subsequent mortgagees and encumbrancees to “obtain the best price reasonably obtainable”.

To discharge this obligation, process is paramount for mortgagees. For example, obtaining a registered valuation and marketing appraisals from reputable agents, undertaking an appropriate marketing campaign, and highlighting any material feature, such as, a resource consent that might run with the land.

If you would like further information on any of the above please do not hesitate to contact Richard Hatch, Property Partner.

Richard Hatch

Contact him on +64 9 300 8761 or richard.hatch@shieffangland.co.nz

This commentary gives a general overview of the topic covered and is not intended to be relied upon as legal advice.

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This paper gives a general overview of the topics covered and is not intended to be relied upon as legal advice.