Case Study For Ms Jonas & Mr Chadwick - Mortgaged Loan Eastpac Bank & Buying Selling Property - Accounting Assignment Help

Assignment Task - 

Q-14 

In 2018, Ms Jonas became the registered proprietor of a residential property at 5 Orchard Road, Bacchus Marsh, after it was given to her by her father. Soon after acquiring the property, Ms Jonas mortgaged it to Eastpac Bank.

By July 2019, the monthly mortgage payment was $1,550.00. At that time, the property was let to a Mr Chadwick, at a monthly rent of $1,400, which Mr Chadwick agreed to pay directly into Ms Jonas’ mortgage account with Eastpac. Since there was a shortfall of more than $150 between the monthly rental paid and the amount payable on the mortgage, Ms Jonas’ mortgage account soon fell into arrears.

On 19 December 2019, the Bank caused a notice to be served upon Ms Jonas requiring her to remedy her default within 31 days.  On 24 January 2020, the Bank wrote to her requiring payment of all arrears by 31 January 2020.

Mr Chadwick continued to pay his monthly rent into Ms Jonas’ mortgage account.  On 4 February 2020, Eastpac served Notice upon Ms Jonas demanding payment of the sum owed under the mortgage.

An officer of the Bank, David Petty, telephoned Ms Jonas on 27 February 2020, and told her that if the arrears to the Bank were not paid, the property would be sold by Eastpac pursuant to its rights under the mortgage.

On 16 March 2020, the Bank wrote to Ms Jonas stating that it had taken possession of the property and was exercising its power of sale.

The tenant, Mr Chadwick, received a notice from the Bank’s agent, Mortgage and Estate Realisation Company (Mercantile), to vacate the premises dated 17 March 2020. He had telephoned Mercantile and said that he was interested in purchasing the property. He was told that Eastpac Bank had a policy that a tenant was permitted to make a single offer to purchase the property. If that offer was acceptable, the property would be sold to the tenant, but otherwise the property would be auctioned.

 Mr Chadwick obtained a sworn valuation of the property in the sum of $400,000 from a registered valuer. He made an offer to purchase the property at that price. In the interim, Eastpac and its agent obtained two other sworn valuations from Valuers and one estate agent appraisal which valued the property in the range $320,000 – $390,000.  On 17 April 2020, Mr Chadwick’s offer of $400,000 was accepted by Mercantile on behalf of Eastpac. Settlement of the sale occurred on 8 June 2020. The purchase of the property by Mr Chadwick was financed by a mortgage loan from the Bank of East Melbourne, a subsidiary of Eastpac Bank.

The transfer to Mr Chadwick was registered on title on 22 June 2020. On 30 June 2020, Ms Jonas commenced proceedings against Eastpac for breach of s.77(1) Transfer of Land Act 1958. After the settlement Ms Jonas obtained an appraisal from a Bacchus Marsh Estate Agency who provided in writing a value of the property in the range from $520,000 to $560,000.

The claim against Eastpac was it failed to conduct the mortgagee sale in good faith and with regard to the interests of the mortgagor, Ms Jonas, as required by s77(1) TLA. The particulars of the claim assert Eastpac failed to advertise the sale at all and it could not show appropriate reasons for selling "by private contract” rather than by public auction to ensure that the best price possible would be obtained.

 You are to accept the Bank did not arrange for the property to be advertised; that the Bank sold the property to Mr Chadwick, the tenant in possession, for the sum of $400,000; and that the property was not put to public auction.  Further, Eastpac gave the required Notices before selling as mortgagee in possession under s.77(1) TLA.

Required: After considering s.77(1) Transfer of Land Act 1958 and the case precedents you are asked to advise M/s Jonas whether you believe she is likely to be successful in a claim against Eastpac that  the bank failed to comply with s.77(1) TLA and as a result she suffered financial loss.

Q16

Explain the manner in which retail and or residential leases are relevant to conveyancing transactions and settlements in respect to (i) buying or selling a property; (ii) preparing documentation associated with property law transactions and (iii) file administration  in checking documents, registering with Land Registry and post-settlement procedures. (25lines)

 
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