BLIGH HOSES DOWN ‘FIRE SALES’ WITH GREATER PROTECTION FOR HOME-OWNERS

The Bligh Government will fast-track new legislation this week to protect struggling Queensland home-owners from mortgagee fire sales.

Under the new laws, financial institutions that intentionally sell repossessed properties at below the market value - leaving home owners with little or no equity - could face fines of up to $20,000.

Premier Anna Bligh said mortgage stress was becoming an increasing reality for Queensland families and she was committed to delivering this protection before Christmas.

“More and more Queenslanders are doing it really tough,” Ms Bligh said.

“The current financial climate is squeezing household budgets to the limit, many to a point where they cannot pay their mortgage.

“The latest data from Fitch Ratings shows an increase in mortgage stress across Australia, with Helensvale on the Gold Coast the most mortgage stressed suburb in the country.

“Applications made to Queensland courts for repossession of real estate has increased dramatically in recent months, jumping from 374 from March-June to 606 in the last four months – and while it’s not possible to say what the circumstances were in each of these cases, the figures are sobering.

“The only thing worse than the prospect of losing your home is the concern that your financial institution could sell your property quickly and at below market value just to cover outstanding debts – leaving you with nothing.

“Swift action is needed and my Government will deliver the protection these vulnerable Queenslanders need by Christmas,” she said.

Attorney-General Kerry Shine said the Property Law Act 1974 would be amended to extend the obligation to sell at market value to situations where properties are sold under a power of attorney or by receivers.

“Mortgagees in Queensland who exercise a power to sell property are currently required to comply with section 85 of the Act that requires they ‘take reasonable care to ensure that the property is sold at market value,” Mr Shine said.

“These new laws will extend this protection and introduce tough, new requirements under this section, including:

1. a requirement to adequately advertise the sale; and

2. obtaining reliable evidence of the property’s value; and

3. maintaining the property, including making any reasonable repairs; and

4. selling the property by auction, unless it is appropriate to sell it in another way.

“Any mortgagee or receiver that fails to follow these requirements will face fines of up to $20,000.

“These steps are designed to ensure mortgagees don’t seek a quick and easy solution when a repossession occurs and rush through with a sale under market value.

“This is about offering greater protection to all Queenslanders who may be affected by the current economic crisis and giving them some peace of mind that should they find themselves in difficulty making repayments, the lender can not simply barge in and sell their property for what ever figure they can get,” he said.

Media: Chris Taylor (Attorney-General’s office) 0419 710 874