Building Loans
(Jersey) Law 1950
A LAW to authorize the lending of
money for enabling persons to acquire dwelling-houses and shares in companies
which own dwellings and to construct, convert or repair dwelling-houses[1]
Commencement
[see endnotes]
1 Interpretation
In this Law, unless the context
otherwise requires –
“Committee” means the Housing Committee;
“company” means a company incorporated under
the law of Jersey;[2]
“company-owned dwelling” means a building or
a self contained part of a building used or to be used wholly or principally
for human habitation and any outhouses, appurtenances and any other rights and
interests belonging thereto or usually enjoyed therewith, which is in the
ownership of a company;[3]
“Fund” has the meaning assigned by Article 2;
“house” means a building or a lot within the meaning of the Loi (1991) sur la copropriété des
immeubles bâtis[4] used or to be used wholly or principally for human habitation and
includes any outhouses and appurtenances belonging thereto or usually enjoyed
therewith;[5]
“loan” means a loan made in pursuance of
this Law;
“security agreement” and “security interest” have the same meanings,
respectively, as in the Security Interests
(Jersey) Law 1983.[6]
2 Establishment
of Dwelling-Houses Loan Fund
(1) For
the purposes of this Law, there shall be established a fund, to be called the
“Dwelling-Houses Loan Fund” (in this Law referred to as the “Fund”), into which the States may pay, and
from which the States may withdraw, such sums as they shall from time to time
determine.
(2) All
monies lent in pursuance of this Law and all expenses incurred in carrying this
Law into effect shall be paid out of the Fund, and all monies received in
respect of the repayment of the principal of loans and of the interest thereon,
and all other monies receivable in pursuance of this Law, shall be paid into
the Fund.
(3) The
Committee shall, not later than 1st March in each year, present to the States a
report showing the financial position of the Fund at the end of the preceding
year.
3 Power
of Committee to make loans for purposes of housing
Subject to the provisions of this Law,
the Committee may lend money to any person for the purpose of –
(a) acquiring
a house together with any land appertaining thereto;
(b) acquiring
land and constructing a house thereon;
(c) constructing
a house;
(d) acquiring
a building and converting it into a house;
(e) converting
a building into a house;
(f) reconstructing,
altering, enlarging, repairing or improving a house;
(g) acquiring
shares in a company the ownership of which shares confers an exclusive right to
occupy a company-owned dwelling. [7]
4 Loan
to be secured by hypothec, to bear interest and to be repaid by instalments
(1) Except
as provided by Article 5, every loan shall be secured by a simple
conventional hypothec charged on the property in relation to which the loan is
made and shall bear interest at the prescribed rate calculated annually on the
amount of the principal of the loan for the time being remaining unpaid on the
first day of January.[8]
(2) For
the purposes of paragraph (1), the prescribed rate of interest shall be 10%
per annum or such higher or lower rate as shall have been fixed for the time
being by the Committee by Order made after consultation with the Finance and
Economics Committee. [9]
(3) The
Subordinate Legislation (Jersey)
Law 1960,[10] shall apply to Orders made under paragraph (2).[11]
(4) The
principal of the loan shall be repaid, together with the interest thereon by
weekly, monthly or quarterly instalments of such amounts that the whole shall
be repaid within such period, not exceeding 40 years from the date of the
contract of creation of the simple conventional hypothec to secure the loan, as
may be agreed upon:
Provided that the whole of the
outstanding principal of the loan, or any part thereof, may at any time be
repaid without notice.[12]
(5) Regulations
made under Article 17 may empower the Committee, notwithstanding the
foregoing provisions of this Article, to reduce the rate of interest on any
loan for any year by reference to such circumstances as may be prescribed by
the Regulations, and, in the case of any such reduction, the periodical
instalments payable in that year in respect of the loan shall be reduced
accordingly.[13]
5 Security
for loans made under Article 3(g) and interest thereon[14]
(1) Every
loan made for the purpose specified in Article 3(g) shall be secured by a
security interest in the shares in relation to which the loan is made in such
form as the States may by Regulations prescribe.
(2) The
provisions of Article 4 in relation to the rate of interest on a loan
shall apply mutatis mutandis to a loan made for
the purpose specified in Article 3(g).
6 Miscellaneous
provisions relating to contracts for securing loans
(1) Every
contract of creation of a simple conventional hypothec to secure a loan shall
state that the loan is made subject to such of the conditions mentioned in Article 14
as are applicable but it shall not be necessary to set out such conditions in
the contract.
(2) Every
authority given by the Committee to pass a contract of creation of a simple
conventional hypothec to secure a loan shall be deemed to include an authority
to pass a contract of extinction of the hypothec on the repayment of the
principal of the loan, together with the interest thereon.
7 Property
to be owned in perpetuity and to be free from charges
(1) Subject
to paragraph (2) and save as may otherwise be provided by Regulations made
under Article 17 no loan shall be made where the property on which the
loan is to be secured is not in the sole ownership in perpetuity of the person
to whom the loan is to be made, or where any rentes
or hypothecs, whether legal, judicial or conventional (excluding the eventual
right of dower of the wife, if any, of that person) are charged on the
property. [15]
(2) No
loan shall be made for the purpose specified in Article 3(g) where the
shares in relation to which the loan is to be made are not or will not be in
the sole ownership of the person to whom the loan is to be made or where the
shares are subject to or charged with any security or other interest.[16]
(3) Nothing
in paragraph (2) shall prevent the securing of the loan by vesting the
shares in relation to which the loan is made in the Committee.[17]
8 Limitation
on amount of loan
The amount of the principal of any
loan shall not exceed –
(a) where
the loan is required for the purpose specified in Article 3(a), the amount
which, in the opinion of the Committee, is the value of the property on which
the loan is to be secured;
(b) where
the loan is required for a purpose specified in Article 3(b) (c) or (d),
the amount which, in the opinion of the Committee, will be the value of the said
property when the works of construction or conversion have been carried out;
(c) where
the loan is required for the purpose specified in Article 3(e), 75% of the
amount which, in the opinion of the Committee, will be the value of the said property
when the works of conversion have been carried out;
(d) where
the loan is required for any of the purposes specified in Article 3(f), 65%
of the amount which, in the opinion of the Committee, will be the value of the said
property when the works of reconstruction, alteration, enlargement, repair or
improvement have been carried out;
(e) where
the loan is required for the purpose specified in Article 3(g), the amount
which, in the opinion of the Committee, is the value of the company-owned
dwelling concerned.[18]
9 Committee
to be satisfied that house or dwelling will be fit for human habitation
Before lending money for the
purpose specified in Article 3(a) or (g), the Committee shall satisfy
itself that the house or company-owned dwelling, as the case may be, to be acquired is, or will be made, in all respects fit for human
habitation, and, before lending money for any other purpose specified in that Article,
the Committee shall satisfy itself that the house to be constructed,
reconstructed, altered, enlarged, repaired or improved or into which the
building is to be converted, as the case may be, will, when the works of
construction, reconstruction, alteration, enlargement, repair, improvement or
conversion have been completed, be in all respects so fit. [19]
10 Power
to advance loans by instalments
Any loan may be advanced by
instalments from time to time as the works of construction, conversion,
reconstruction, alteration, enlargement, repair or improvement, as the case may
be, progress.
11 Insurance
of property[20]
(1) This
Article applies to loans made for any of the purposes of Article 3(a) to (f)
which are secured on a property other than a lot.
(2) Subject
to paragraph (3), in the case of a loan to which this Article applies
which was made before the relevant date, until such time as the principal of
the loan together with the interest thereon has been repaid, the property on
which the loan is secured shall be kept insured against fire by the Committee
in the name of the States, as holders of the hypothec, and the name of owner,
and the premiums payable in respect of the insurance shall be refunded by the
owner on demand therefor being made by or on behalf of the Committee.
(3) In
the case of a loan to which this Article applies which was made before the
relevant date, the owner of the property on which the loan is secured may agree
with the Committee that he or she will insure the property on which the loan is
secured, and in the event of such agreement, it shall be the responsibility of
the owner, with effect from such date as may have been agreed and until the
principal of the loan together with the interest thereon has been repaid, to
keep the property insured against fire in the name of the States as holders of
the hypothec and in his or her own name.
(4) In
the case of a loan to which this Article applies which is made after the
relevant date, the owner of the property on which the loan is secured shall,
until such time as the principal of the loan together with the interest thereon
has been repaid, keep the property insured against fire in the name of the
States as holders of the hypothec, and in his or her own name.
(5) In this Article –
“lot”
means a lot within the meaning of Article 1
of the Loi (1991) sur la copropriété
des immeubles bâtis;[21] and
“relevant date” means
1st January 1995.
12 Insurance
of lots[22]
(1) This
Article applies to a loan which is secured on a lot.
(2) In
the case of a loan to which this Article applies, until such time as the
principal of the loan together with the interest thereon has been repaid, the
property comprising the lot shall be kept
insured against fire by the association des
copropriétaires in relation to that property and the interest of
the States, as holders of the hypothec, shall be endorsed on the policy.
(3) In
this Article –
“Lot” has the same meaning as in Article 11; and
“association des copropriétaire” means an
association constituted under Article 5 of
the Loi
(1991) sur la copropriété des immeubles bâtis.
13 Insurance
of company-owned dwellings[23]
(1) This
Article applies to loans made for the purpose of Article 3(g).
(2) In
the case of a loan to which this Article applies, until such time as the
principal of the loan, together with the interest thereon, has been repaid, the
company-owned dwelling which the person to whom the loan was made is entitled
to occupy shall be insured against fire by the company which owns the dwelling
and the interest of the States, as holders of the security interest in the
shares in relation to which the loan was made, shall be endorsed on the policy.
14 Conditions
to be observed until loan repaid
(1) Except
where a loan is made for the purpose specified in Article 3(g), until such
time as the principal of a loan, together with the interest thereon, has been
repaid, the following conditions shall be observed with respect to the property
on which the loan is secured, namely –
(a) the
property shall not be sold or otherwise disposed of inter
vivos except with the consent in writing of the Committee:
Provided that no such consent
shall be given for the sale or disposal of the property to a person to whom, by
virtue of the provisions of any Regulations made under Article 17, a loan
may not be made;
(b) the
owner shall not, by any act or omission on his or her part, except with the
consent in writing of the Committee and subject to any conditions attached to
such consent, suffer any rente or hypothec,
other than a legal hypothec, to become charged on the property;
(c) every
sum due in respect of principal and interest of the loan and the insurance of
the property shall be punctually paid;
(d) except
where the loan was made for a purpose specified in Article 3(e) or (f),
the owner shall both occupy and reside in the house and shall not let or
otherwise part with the possession of the property to any other person except
with the consent in writing of the Committee;
(e) where
the property is let the rental shall not exceed such amount as may be
determined by the Committee, and no fine, premium or other like sum shall be
demanded or taken in addition to the rental;
(f) all
reasonable steps shall be taken to secure the maintenance of the house so as to
be in all respects fit for human habitation;
(g) the
house shall not be used for purposes other than those of a private
dwelling-house except with the consent in writing of the Committee and then
only for such further purposes and to such extent as may be specified in that
consent;
(h) a
lessee or tenant shall not assign, sub-let or otherwise part with the
possession of the property except to the owner;
(i) where
the area of the land on which the loan is secured exceeds one vergée,
the land shall be kept clean and in a good state of cultivation and fertility,
and in good condition, and all reasonable steps shall be taken to secure the
maintenance of the buildings thereon to the extent necessary for the proper
cultivation and working of the land;
(j) the
Committee, and its agents or servants, shall be permitted to enter the property
at all reasonable times for the purpose of ascertaining whether the foregoing
conditions are being complied with;
(k) the
owner shall not suffer a lessee or tenant to commit a breach of any of the
conditions mentioned in sub-paragraphs (g), (h), (i) or (j), and the said conditions shall, so long as they are required
to be observed, be deemed to be part of the terms of any lease, agreement for a
lease or tenancy of the house and shall be enforceable accordingly. [24]
(2) Where
any property on which a loan is secured is let and the maximum rental has been
determined by the Committee under paragraph (1)(e), the provisions of the Dwelling-Houses (Rent Control) (Jersey)
Law 1946,[25] shall not apply to the property.
(3) Where
a loan is made for the purpose specified in Article 3(g), until such time
as the principal of the loan, together with the interest thereon has been
repaid, the following conditions, which shall be included in the security
agreement establishing the security interest on which the loan is secured,
shall be observed with respect to the shares on which the loan is
secured –
(a) the
shares, if title to them is not vested in the Committee, shall not be sold or
otherwise disposed of inter vivos except with
the consent of the Committee which shall not grant such consent where the person
to whom the shares would be transferred is, by virtue of any Regulations made
under Article 17, a person to whom a loan may not be made;
(b) the
owner of the shares, if title to them is not vested in the Committee, shall
not, by act or omission on his or her part, except with the consent in writing
of the Committee, and subject to any conditions attached to such consent,
suffer any security interest or other interest to become charged on the shares
other than that held by the Committee;
(c) every
sum due in respect of principal and interest of the loan and the insurance of
the dwelling shall be punctually paid;
(d) the
owner of the shares shall both occupy and reside in the dwelling and shall not part
with possession of the same except with the consent in writing of the Committee;
(e) all
reasonable steps shall be taken to secure the maintenance of the dwelling and
any common parts of the building in which the dwelling is situated, to the
extent to which the owner of the shares is responsible therefor;
(f) the
dwelling shall not be used for any purposes other than those of a private
dwelling except with the consent in writing of the Committee and then only for
such further purposes and to such extent as may be specified in that consent;
(g) the
Committee and its agents or servants shall be permitted to enter the dwelling
at all reasonable times for the purpose of ascertaining whether the foregoing
conditions and any other conditions of the security agreement are being
complied with;
(h) if
and to the extent that ownership of the shares acquired with or with the aid of
a loan confers on the owner of those shares any rights including rights to vote
at any meeting of the company those rights shall not be exercised without the
prior consent in writing of the Committee.[26]
15 Powers
of Committee in event of breach of conditions
(1) In
the event of a breach of any of the conditions mentioned in Article 14,
the Committee may apply to the Inferior Number of the Royal Court for an order
vesting in the public the ownership of the property in respect of which the
breach has been committed:
Provided that the Court shall not
make such an order unless the Committee has served on the owner of the property
a notice requiring him or her to remedy the breach and he or she has, within
one month after the delivery of the notice, failed to comply therewith.
(2) An
order made under paragraph (1) shall include an order for the registration
thereof in the Public Registry of Contracts and an order so registered shall
have like effect to a contract passed before the Royal Court and shall
constitute a valid title to the property to which it relates and to the rights
appertaining thereto, and such title shall bear the date of the order of the
Court.
(3) Where
any property is vested in the public by virtue of an order made under paragraph (1),
it shall be so vested free of all rentes and
hypothecs, other than legal hypothecs, bearing a date subsequent to that of the
contract of creation of the simple conventional hypothec securing the loan.
(4) An
order registered in pursuance of paragraph (2) shall not be renounced for
want of insertion in the register of a décret
if it bears a date prior to that of the insertion on which a
“tenant” is confirmed in the tenure of the real estate en décret.
(5) Where
any property is vested in the public by virtue of an order made under paragraph (1),
the Committee shall, in its discretion, cause it either –
(a) to be
sold to a person who has made an application for a loan; or
(b) to be
put up for sale by public auction,
and shall, out of the proceeds of
the sale, retain any sums due on account of the principal and interest of the
loan, and all costs, charges and expenses properly incurred in connection with
the vesting of the property and the sale thereof, and shall pay the balance to
the Viscount for the benefit of the former owner:
Provided that where the owner is
unable to sell the property for a sum sufficient to pay, out of the proceeds of
the sale, the principal and interest of the loan then due, and the costs,
charges and expenses properly incurred in connection with the vesting of the
property and the sale thereof, the Committee may retain the property under its
own management and shall not be liable to pay any sum to the former owner.[27]
(6) Where
any money is paid to the Viscount in accordance with the provisions of paragraph (5),
he or she shall immediately cause a notice to be published in 2 newspapers
circulating in Jersey, one being a publication in French and the other a
publication in English, stating that he or she holds the money on behalf of the
former owner (naming the owner) and that any person having a claim against the
former owner should take proceedings for the protection of his or her interests
within the period of 6 weeks from the date of the first publication of the
notice, and if, within that period no such proceedings have been instituted, or
there has not been lodged with the Viscount notice of an intention to institute
such proceedings, supported by an affidavit, the Viscount shall pay the money
to the former owner.
(7) Any
notice under the proviso to paragraph (1) may be served
either –
(a) by
delivering it to the person on whom it is to be served;
(b) by
leaving it at the usual place of abode of that person;
(c) by
sending it in a prepaid registered letter addressed to that person at his or
her usual place of abode; or
(d) if it
is not practicable after reasonable enquiry to ascertain the usual place of
abode of that person, by delivering it to some person on the property to which
the notice relates or, if there is no person on the property to whom it can be
delivered, by affixing it, or a copy of it, to some conspicuous part of the
property.[28]
(8) In
the event of a breach of any of the conditions mentioned in Article 14(3)
or any other provision of the security agreement which is by virtue thereof
made an event of default, the Committee shall without prejudice to any other
rights of the Committee under the security agreement, have the power of sale
given by Article 8 of the Security
Interests (Jersey) Law 1983,[29] and may exercise that power in accordance with the provisions of
that Article.[30]
16 False
statements and information
If any person, for any of the
purposes of this Law, knowingly makes any statement or furnishes any
information which is false in a material particular, he or she shall be liable
to a fine not exceeding £1,000 or to imprisonment for a term not
exceeding 6 months or to both such fine and such imprisonment, and, where a
loan, or a reduction in the rate of interest on a loan, has been obtained by
means of such false statement or false information, the provisions of Article 15
(with the exception of the proviso to paragraph (1) thereof) shall have
effect in relation to the property on which the loan is secured as if a breach
of a condition mentioned in Article 14 had been committed. [31]
17 Regulations[32]
The States
may make Regulations for any purpose for which Regulations may be made under
this Law, for restricting the powers conferred on the Committee by this Law or
regulating the exercise of such powers, for prescribing the forms of contract
to be passed for the purposes of this Law, for providing that in such cases as
may be prescribed by the Regulations the costs incurred in connection with the
passing of contracts of creation of a simple conventional hypothec to secure a
loan or the costs of creating a security
interest to secure a loan shall be paid out of the Fund
and generally for the purpose of carrying this Law into effect.
18 Citation
This Law may be cited as the Building Loans (Jersey) Law 1950.