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38 1976

BUILDING SOCIETIES ACT, 1976

PART VI

Loans

Amounts and purposes of loans.

77. —(1) Whenever the Minister considers it expedient, in the interests of the orderly and proper regulation of building society business and having regard to the demand for loans for house purchase, he may, subject to the consent of the Minister for Finance and after consultation with the Registrar, make regulations in relation to the purposes and amounts of loans by societies.

(2) Without prejudice to the generality of subsection (1), regulations under this section may provide for all or any one or more of the following—

(a) the maximum amount of a loan that a society may make;

(b) the purposes for which loans may or may not be made by a society; and

(c) the maximum amount that a society may lend to a body corporate and the total amount of such loans.

(3) Regulations under this section may be expressed to apply to all societies or to all loans or to a specified class or classes of societies and loans (denoted by reference to such matters as the Minister, with the consent of the Minister for Finance, considers appropriate), and may provide for limits by reference to amounts or to percentages or otherwise and for the application of specified limits to a specified class or specified classes of societies and loans (denoted by reference to such matters as the Minister, with such consent, considers appropriate).

(4) A society shall not make a loan to a body corporate within a period of two years after the society's incorporation or after the granting to it under section 19 of permission to advertise, whichever is the later.

Security for loans.

78. —(1) A loan made by a society shall not exceed the valuation in accordance with section 79 on the freehold or leasehold estate offered as security for the loan.

(2) In determining the amount of a loan a society may take into account the value of any additional security, other than freehold or leasehold estate, which is available in respect of the loan.

(3) The Registrar may give a direction in relation to the classes of security (other than freehold or leasehold estate) which may be taken into account by a society in determining the amount of a loan, and for this purpose may direct the conditions or arrangements which shall apply to the taking into account of a specified class or classes of additional security.

(4) Where a loan is sought for the purpose of defraying the purchase price of an estate and security (other than freehold or leasehold estate) is taken into account in determining the amount of the loan, the amount of the loan shall not exceed that purchase price and shall not exceed by more than 25 per cent the maximum amount which the society would consider it proper to advance on the security of the estate if no other security were taken by the society.

Valuation of security for loans.

79. —(1) It shall be the duty of every director of a society to satisfy himself that the arrangements for assessing the adequacy of the security to be taken in respect of loans to be made by the society are such as may reasonably be expected to ensure that—

(a) the adequacy of the security to be taken will be assessed either by the directors or by a director or other officer who is not disentitled by this section to make the assessment, and

(b) there will be available to every person who has to assess the adequacy of the security to be so taken a written report prepared and signed by a competent person (who shall not be an officer of the society) experienced in matters relevant to the determination of the value of the security, and

(c) the report relates to the value of any freehold or leasehold estate in the security and to any other matter likely to affect the value of the security.

(2) A report by a person who has a financial interest in the disposal of an estate in relation to which a loan is to be made by a society shall not be accepted by the person or persons assessing the adequacy of the security as a report for the purposes of subsection (1) (b).

(3) A person assessing the adequacy of the security for a loan by a society shall not be a person who has a financial interest in the disposal of the estate in relation to which the loan is to be made or a person who is entitled to receive any commission for introducing the parties to the transaction involving that disposition.

Loan on second mortgage.

80. —A society shall not make a loan on the security of any freehold or leasehold estate which is subject to a prior mortgage unless the prior mortgage is in favour of the society making the loan.

Prohibition of balloting for loans.

81. —A society shall not cause or permit applicants for loans to ballot for precedence or in any way permit the making of a loan depend on any chance or lot.

Sale of mortgaged property.

82. —(1) Where an estate mortgaged to a society is sold in exercise of a power given by the mortgage, the society shall pay to the mortgagor a sum equal to the value of the interest in the estate at the disposal of the society, after deducting the amount of the loan then remaining unpaid and any sum due for interest and all costs incurred by the society in the recovery and disposal of the estate.

(2) (a) In exercising any power of sale under a mortgage a society shall ensure as far as is reasonably practicable that the estate is sold at the best price reasonably obtainable.

(b) To the extent that any agreement relieves (or may have the effect of relieving) a society or any person from the obligation imposed by paragraph (a), the agreement shall be void.

(3) (a) Where an estate is sold under subsection (1), the society shall, within 21 days after the completion of the sale, send a notice by registered post to the mortgagor at his last known address, containing particulars of the sale in such form as the Registrar may require.

(b) Nothing in this section shall affect the operation of any rule of law relating to the duty of a mortgagee to account to a mortgagor.

(4) In this section “mortgagor” means a person to whom a loan is made by a society, and includes the successor in title of such person.

Records of loans.

83. —(1) Every society shall cause records to be kept showing in relation to every loan the amount of the loan, the purpose for which it was made, the value placed on the freehold or leasehold estate, the name of the person by whom the report under section 79 (1) was made and particulars of any additional security taken by the society.

(2) The records required by subsection (1) shall include such other information relative to loans made by the society as the Registrar may from time to time direct.

Discharge of mortgage.

84. —(1) Where in relation to unregistered land within the meaning of the Registration of Title Act, 1964 , all moneys intended to be secured by a mortgage or a further charge given to a society have been fully paid or discharged, the society may endorse on or annex to the mortgage or further charge either a reconveyance of the mortgaged property to the then owner of the equity of redemption (or to such persons and to such uses as he may direct) or a receipt under the seal of the society.

(2) A receipt under this section shall operate to vacate the mortgage or further charge and shall, without any reconveyance or re-surrender, vest the estate of and in the property comprised in the mortgage or further charge in the person for the time being entitled to the equity of redemption.

(3) (a) Where a mortgage or further charge given to a society has been registered in the Registry of Deeds established by the Registration of Deeds Act, 1707, the Registrar under that Act shall, on production of a receipt under subsection (1), make an entry opposite the entry of the mortgage or charge to the effect that the mortgage or charge is satisfied, and shall grant a certificate (either on the mortgage or charge or separately) to the like effect.

(b) The power conferred on the Minister for Justice by section 35 of the Registry of Deeds (Ireland) Act, 1832, as adapted by the Registry of Deeds (Ireland) Act, 1832 (Adaptation) Order, 1956 (S.I. 281 of 1956), to fix fees shall include power to fix fees to be paid for making the entry and granting the certificate under this subsection, and any moneys received under this subsection shall be paid into the Exchequer.

(4) A certificate under subsection (3) shall be received in evidence in all courts and proceedings without any further proof, and an entry under that subsection shall have the effect of clearing the register or record of the relevant mortgage.

(5) Where in relation to registered land within the meaning of the Registration of Title Act, 1964 , all moneys intended to be secured by a mortgage given to a society have been fully paid or discharged, the society may issue to the registered owner of the estate a receipt under the seal of the society, which shall, for the purposes of section 65 of that Act, be sufficient proof of the satisfaction of the mortgage.