Building Loans
(Jersey) Law 1950[1]
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[2]
Commencement [see endnotes]
1 Interpretation[3]
In this Law, unless the context
otherwise requires –
“company”
means a company incorporated under the law of Jersey;
“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;
“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 used or to be used wholly or principally
for human habitation and includes any outhouses and appurtenances belonging
thereto or usually enjoyed therewith;
“loan” means a
loan made in pursuance of this Law;
“Minister”
means the Minister for Housing;
“security interest”
means, as the case requires, a continuing security interest to which, as
referred to in Article 1A of the Security
Interests (Jersey) Law 1983, that Law applies or a security interest
within the meaning of the Security
Interests (Jersey) Law 2012, and “security agreement” has
a corresponding meaning.
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
Minister 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 Minister to make loans for purposes of housing
Subject to the provisions
of this Law, the Minister 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. [4]
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 and paid on the
days and in the manner required from time to time by the Minister.[5]
(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 Minister by Order made after consultation with the Minister
for Treasury and Resources.[6]
(3) [7]
(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.[8]
(5) Regulations
made under Article 17 may empower the Minister, 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.[9]
5 Security
for loans made under Article 3(g) and interest thereon[10]
(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 Minister on behalf of the States 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 any eventual right of dower) are charged on the
property.[11]
(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.[12]
(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 States.[13]
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 Minister, 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 Minister, 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 Minister, 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 Minister, 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 Minister, is the value of the company-owned
dwelling concerned.[14]
9 Minister
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 Minister shall satisfy
himself or herself 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 Minister shall satisfy himself or herself 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. [15]
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[16]
(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 Minister 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 Minister.
(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 Minister 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; and
“relevant
date” means 1st January 1995.
12 Insurance
of lots[17]
(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[18]
(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 Minister:
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 Minister 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 Minister;
(e) where the property is
let the rental shall not exceed such amount as may be determined by the
Minister, 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 Minister 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 Minister, and
his or her 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. [19]
(2) Where
any property on which a loan is secured is let and the maximum rental has been
determined by the Minister under paragraph (1)(e), the provisions of the Dwelling-Houses
(Rent Control) (Jersey) Law 1946, 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 States, shall not be sold or otherwise disposed of inter
vivos except with the consent of the Minister who 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 States, shall not, by act or omission on the owner’s
part, except with the consent in writing of the Minister, 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 States;
(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 Minister;
(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 Minister and then only for such further purposes and to such extent as
may be specified in that consent;
(g) the Minister and his or her 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
Minister.[20]
15 Powers
of Minister in event of breach of conditions
(1) In
the event of a breach of any of the conditions mentioned in Article 14,
the Minister 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 Minister 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 Minister shall, in his or her 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 Minister may retain the property under
his or her own management and shall not be liable to pay any sum to the former
owner.[21]
(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.[22]
(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 Minister on behalf of the States shall, without
prejudice to any other rights of the States under the security
agreement –
(a) in
the case of a security agreement that created a continuing security interest to
which, as referred to in Article 1A of the Security Interests
(Jersey) Law 1983, that Law applies –
(i) have
the power of sale given by Article 8 of the Security
Interests (Jersey) Law 1983, and
(ii) may
exercise that power in accordance with the provisions of that Article; or
(b) in
the case of a security agreement that created a security interest within the
meaning of the Security
Interests (Jersey) Law 2012, may exercise the powers of a secured
party under that Law.[23]
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 imprisonment for a term of 6 months and to a fine, 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. [24]
17 Regulations[25]
The
States may make Regulations for any purpose for which Regulations may be made
under this Law, for restricting the powers conferred on the Minister 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.
17A Shares in property previously vested in the Housing
Committee[26]
Where any shares in a company the ownership of which shares confers
an exclusive right to occupy a company-owned dwelling are, immediately prior to
the commencement of this Article, vested in the Housing Committee, on
commencement of this Article such shares shall be vested in the States.
18 Citation
This Law may be cited as the Building Loans (Jersey) Law 1950.