HOUSE PURCHASE DEPARTMENT:
ADMINISTRATION & POLICY
(continued)
Bank Committee: July 18th 1927
The General Manager reported with reference to the case of the application of Mrs Wright, the widow of H R Wright, deceased, (a mortgagor to the Bank in respect of property situate at 49, Shaftmoor Lane) to temporarily let the house. The House Purchase Sub-Committee at their last meeting had decided not to accede to such request, but the General Manager had subsequently been approached by Mrs Wright's father who stated that she could not for financial reasons live in the house at present, but that it was the intention of Mrs Wright, her mother and himself to occupy the premises in 6, or at the most 12, months' time. After discussion, it was:
2770 RESOLVED:- That the Town Clerk be instructed to report to a Special Meeting of the House Purchase Sub-Committee to be held on the 25th instant his considered opinion on the question of the Bank's power to prohibit the letting of property mortgaged to them, and that such Sub-Committee be empowered to take such action with regard to the case of Mrs Wright as they may consider desirable.
Bank Committee: December 19th 1927
2881 The following report of the General Purposes Sub-Committee was presented:
Applications for Advances on Leasehold Properties where the Lease has less than 50 years to run.
At the present time there is a definite instruction to the effect that advances shall not be made on leasehold property where the lease has less than 50 years to run. As a matter of policy, your Committee have had under consideration this restriction, and are of opinion that a hard and fast rule should not apply. They feel that there are cases, where the lease has less than 50 years to run, which ought to be considered and decided by the House Purchase Sub-Committee, and not automatically rejected as at present. It is difficult to justify rejection where the Valuer is able to report that an advance could safely be made for a shorter term than 50. Solicitors continue to make representations on this matter and your Sub-Committee feel there is a good case for consideration. They therefore recommend that the previous instruction be rescinded and that the House Purchase Sub-Committee be empowered to grant advances on leasehold property having less than 50 years unexpired where they are satisfied from the Valuer's report that there would be no undue risk to the Bank in making an advance for an appropriate period of years.
2886 RESOLVED:- That the instruction contained in Minute No 2241 be rescinded and that the House Purchase Sub-Committee be empowered to approve advances on leasehold property having less than 50 years unexpired in cases where they are satisfied from the Valuer's report that there would be no undue risk to the Bank in making an advance for an appropriate period of years, all such cases to be submitted to the Bank Committee for confirmation before any advance is made.
2899 The following report of the House Purchase Sub-Committee was presented:
Mortgagors in arrear.
Your Sub-Committee have had before them a full report by the General Manager of all cases where Mortgagors are in arrear with their payments to an extent equal to three monthly instalments. They found that in certain cases mortgagors take no notice of communications addressed to them and make little or no effort to fulfil their obligations, and your Sub-Committee feel that the practice of appointing a Receiver in the first instance is not the most effective way of dealing with such cases. The Town Clerk has been consulted on the matter and points out that a Receiver, when appointed, is the agent of the Mortgagor for the purpose of collecting rents and profits, and that the entering of a mortgagee into possession, or the appointment of a Receiver, is not a necessary preliminary to a sale by the mortgagee. In cases where the Committee are of opinion that the circumstances justify the property being sold and the mortgage paid off, action should be taken without the previous appointment of a Receiver.
The list of arrear cases which your Sub-Committee have had before them totals 178, and after carefully considering the circumstances of each case, the following decisions were arrived at
|
(a) |
Cases where no action need be taken |
79 |
|
(b) |
Cases to be referred to Estates Department |
9 |
|
(c) |
Cases to be
referred to Public Works Department |
1 |
|
(d) |
Cases where a Receiver should be appointed |
5 |
|
(e) |
Cases where houses should be sold, the Bank being already in possession |
3 |
|
(f) |
Cases where proceedings should be taken |
81 |
|
|
|
178 |
[NOTE: cases in categories (b) and (c) refer to advances made where the above Departments have agreed to indemnify the Bank to a certain amount.]
On presentation of the foregoing report the Chairman of the House Purchase Sub-Committee notified the Committee of several cases where payments in respect of arrears had been made and cases where new circumstances justified further re-consideration by the Sub-Committee.
After consideration it was:
2900 RESOLVED:- That in the undermentioned cases the Town Clerk be authorised and instructed to institute such proceedings as may be necessary for the recovery of the amounts owing to the Bank and to obtain possession of the properties, also that the Town Clerk be authorised to prepare and affix the Corporate Seal to any necessary documents in connection with the matter:
Non-Corporation Houses.
F H Pountney - 1383, Stratford Road, Hall Green.
J G Tringham - 57, Bunbury Road, Kings Norton.
W J Strong - 246, Orphanage Road, Erdington.
W H Beesley - 127, Woodthorpe Road, Kings Heath.
P S Emerson - 235, Northfield Road, Kings Norton.
V C Raynor - 110, Willows Road, Cannon Hill.
A Dale - 39, Tessall Road, Northfield.
H Cook - 25, Deakin Road, Erdington.
F Gregory - 193, Wheelwright Road, Erdington.
Corporation House.
H Merriman - 69, Bramley Road, Acocks Green.
2901 RESOLVED:- That, subject to the procedure recommended by the Joint Conference on Housing with regard to Mortgagors in default being
complied with, the Town Clerk be authorised and instructed in the undermentioned cases to institute such proceedings as may be necessary
for the recovery of the amounts owing to the Bank and to obtain possession of the properties; also that the Town Clerk be authorised
to prepare and affix the Corporate Seal to any necessary documents in connection with the matter.
The Town Clerk presented the following report with reference to property in mortgage to the Bank No 13 Redthorn Grove, Stechford:
December 17th 1927
House Purchase. No 13, Redthorn Grove, Stechford.
I have to remind the Sub-Committee that in this case the advance was made in respect of a non-Corporation house and that some time ago Mr Wilde was appointed Receiver, the mortgagor being in arrear with his payments.
It appears that Mr Ford has a second mortgage upon the property and has arranged for the mortgagor, Mr Newbold, to hire another house from him (Ford), a tenant being placed in the house which is in mortgage to the Bank.
This tenant informs me that he has signed an agreement for a three years' tenancy and has agreed to pay 22/- a week rent, as well as rates and to do inside repairs. As Mr Wilde has already been appointed Receiver I have requested him to collect the rent from the tenant.
It is of course open to the Corporation to refuse to recognise the tenancy as it has been created contrary to the terms of the mortgage, but I have already received instructions from the Chairman that this course should not be taken and I propose, therefore, to endeavour to obtain the written agreement from the mortgagor and if I fail to do so to arrange for the tenant to enter into a new agreement with the Corporation on the terms already indicated, a course which, I understand, he is prepared to take.
It appears that the mortgagor's account with the Bank, if not already in credit, will be in credit in a short time in view of the substantial rent to be paid. The question then arises as to whether the surplus in the hands of the Receiver, after the payment of the interest and instalments due to the Bank, should be handed over to the Bank for the further reduction of the principal outstanding or to the mortgagor. In this case the mortgagor has broken the terms of his mortgage by letting the property without obtaining the consent of the Corporation and I feel that it is possible that he has taken this course at the instigation of the second mortgagee. I therefore think that if any surplus money were handed over to the mortgagor it would possibly accrue to the advantage of the second mortgagee rather than the mortgagor. I have already asked Mr Wilde, pending further instructions, to hand over the whole of the money received to the Bank and I suggest that your Committee should not, for the time being, vary those instructions as, apart from any other consideration, it may well be that the second mortgagee will take over the mortgage as the only solution of the difficulty in which he has placed himself.
I understand from Mr Hilton that this is not the only case where a mortgagor has let a house in mortgage to the Bank without the consent of the Corporation and that he feels that in some of these cases it is possible that the house may have been acquired in the first instance with the object of making the profit through the subsequent letting of the premises.
I think it would be wise to ascertain from time to time the cases where mortgagors are not residing in their houses and in those cases your Committee should consider the possibility and desirability of appointing a Receiver.
Each of these cases will, of course, require investigation in order that it may be determined whether the Corporation has any power to appoint a Receiver. I have already reported with reference to this aspect of the question (to the meeting held on the 25th July 1927) when I expressed the view that a letting for a short period would not constitute a breach of the terms of the mortgage.
I have to ask for the Committee's instructions with regard to the above-mentioned house - No 13, Redthorn Grove - and for their general instructions with regard to the other cases referred to.
2909 RESOLVED:- That the report of the Town Clerk be approved, and that the General Manager be instructed to the House Purchase Sub-Committee any case where the Mortgagor is not residing in the house and the account is 3 months in arrear, with a view to the appointment of a Receiver.
Bank Committee: January 16th 1928
2930 The following report of the General Purposes Sub-Committee was presented:
Limitation of Bank Funds to be utilised for House Purchase Advances.
Your Sub-Committee have given careful consideration to the question of the per-centage of bank funds which may be utilised for advances on house purchase. The existing arrangement is that the sum outstanding on mortgage shall not exceed one-third of the amount standing to the credit of depositors. At present this percentage is approximately one-fifth and therefore within the limit laid down.
Your Sub-Committee feel that the limitation of one-third is too high, and that the time has arrived when it would be desirable to fix the limitation at a lower figure and one-fourth is therefore recommended.
Your Sub-Committee are of opinion that the amounts repaid month by month will, in all probability meet normal monthly requirements. In order, however, to safeguard the interests of long standing depositors, who may at a later stage wish to purchase a house, it is considered that approximately the last £100,000 of the percentage of one-fourth (above referred to) should be reserved for these depositors, and your Sub-Committee recommend accordingly.
2931 RESOLVED:- That the instruction contained in Minute No 447 be rescinded and that no advances for the purpose of house purchase shall be granted when the balance due in respect of advances already made represents one-fourth of the amount standing to the credit of depositors; also that it be an understanding that the last £100,000 of the one-fourth referred to be allocated for advances to long-standing depositors who may desire to purchase a house.
January 14th 1928
re Redthorn Grove Houses, Stechford. Alfred Ford.
With reference to the question of road-making charges in respect of Redthorn Grove; Mr Ford has now executed a legal document in which he formally acknowledges his liability to make up and maintain this road and indemnifies each of the Borrowers and the Corporation from all charges in respect thereof, thus putting the matter in the same position as if covenants to that effect has been included in the Conveyance to the respective Borrowers in conformity with the verbal statement that Mr Ford made to the Municipal Bank's Valuer.
I, accordingly, ask that the above Minute be rescinded and that I be authorised to affix the Corporate Seal to the aforementioned document.
2924 RESOLVED:- That the Town Clerk's report be approved; that Minute No 2912 be rescinded and that the Town Clerk be authorised to affix the Corporate Seal to the Deed of Indemnity executed by Mr Ford.
Report of the Town Clerk: January 24th 1928
Minute No 2924
re Redthorn Grove Houses Stechford. Alfred Ford.
As instructed by the above Minute, I have affixed the Corporate Seal to the Deed of Indemnity executed by Mr Ford.
I, accordingly, ask that the above Minute be discharged.
Bank Committee: February 20th 1928
2996 RESOLVED:- That in respect of House Purchase applications where the properties are liable for charges in respect of Private Street Works or road improvements, the Vendor be required to give a written indemnity to the Purchaser in respect of such charges before advances on the properties in question are sanctioned.
Bank Committee: April 16th 1928
The Town Clerk presented the following report as to the payment of ground rent on properties mortgaged to the Bank:
Bank Mortgages. Payment of Ground Rent.
Your Committee will remember that the proposal has been put forward that the Corporation should obtain Parliamentary powers to enable the Municipal Bank to pay ground rents of properties mortgaged to the Bank and to debit the amounts paid to the account of the depositor.
I have given consideration to this matter and now suggest that the form of mortgage might be amended to enable the Municipal Bank to make these payments in lieu of seeking further Parliamentary powers. I submit herewith a note of the amendments I suggest for this purpose, and if your Committee approve, I shall be glad to have their instructions to incorporate them in future mortgages.
There is one point to which I wish to draw attention in connection with this matter. Under Rule 90 - Depositor in arrear - the Corporation have power to take possession of mortgaged property in the case of any depositor being in arrear with such an amount as represents the total of three monthly instalments of principal. I think that for the purpose of calculating this amount any arrears of ground rent which may be debited to the account of a depositor under the proposed arrangement should be disregarded. I do not think that from a practical point of view this will give rise to any difficulties.
3062 RESOLVED:- That the foregoing report of the Town Clerk be approved, and that he be authorised to amend the form of mortgage in accordance with the draft submitted with the foregoing report, in order to enable Municipal Bank to pay the ground rents of mortgaged properties, and to debit the amount paid to the account of the depositor.
|
Birmingham Municipal Bank. Suggested Amendments to Mortgage Leasehold Premises. Clause 3 (a) add "rent" after "insurance
premiums". Add new Clause 7, renumbering present No 7 as No 8 - "7. The Corporation shall be entitled to pay the rent
reserved "by the said lease hereby mortgaged and all payments of "rent so made
and all costs, charges and expenses incurred by "the Corporation in connection therewith may be charged to "the account of the borrower
who shall repay the same to the "Corporation on demand" |
Bank Committee: May 21st 1928
Charges in respect of Private Street Works and Road Improvements.
At their meeting held on the 20th February last, your Committee instructed by Minute No 2996 that where properties are liable for charges in respect of Private Street Works, the Vendor should be required to give a written undertaking to indemnify the purchaser in respect of such charges before the advance is granted. Your Sub-Committee point out, however, that several cases have arisen where the vendor has declined to give such an indemnity, and after further considering the circumstances, your Sub-Committee are of opinion that it would be desirable for the instruction to be modified, so as to allow advances being granted in cases where the road making charges have taken into account by the Bank's Valuer in arriving at his valuation. Your Sub-Committee accordingly recommend that the instruction of your Committee in the matter be amended accordingly.
[Agreed by Bank Committee Resolution 3107]