Mortgagee Sales

The mortgagor (property owner) does not meet their obligations under the terms of the mortgage.

Some examples are:

• Mortgage repayments, not being meet
• Rates, failing to pay local authority on due date
• Insurance, failing to hold current insurance on the property

These failures can result in the mortgagee (finance provider) exercising its power of sale under the terms of the mortgage. The property is then sold after completing a well-defined legal process, which enables the lending institution to recover the debt.

As the mortgagee is not the owner of the property, it offers the property for sale under different terms and conditions.

For Example:

• Mortgagee properties are sold with no vendor warranties, sometimes on an as is where is basis
• Chattels are not normally included in the sale
• Vacant possession is not guaranteed, the sale may be subject to existing tenancies   or holding over by the Mortgagor
• Existing leases or income not guaranteed
• The property may not be insured by the mortgagee after signing the sale and purchase agreement
• Mortgagees have the right under certain circumstances, to cancel the sale without penalty
• The purchaser is typically contractually bound to rely solely on their personal judgement and enquiries

You should:

• Obtain all relevant information from the listing agent
• Carry out your own diligence
• Discuss with your solicitor, prior to submitting an offer or bidding at auction
• Finally, if you are successful in purchasing – it is advised to replace all door locks upon taking possession of the property

Further questions relating to a mortgagee sale, contact Tristan Harcourt from Harcourts Grenadier Mortgagee Division on 0274 330 112 or email tristan.harcourt@harcourts.co.nz

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