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You are here: BAILII >> Databases >> United Kingdom Statutory Instruments >> The Building Societies (Isle of Man) Order 1987 No. 1498 URL: http://www.bailii.org/uk/legis/num_reg/1987/uksi_19871498_en_1.html |
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Statutory Instruments
BUILDING SOCIETIES
Made
20th August 1987
Laid before Parliament
27th August 1987
Coming into force
15th November 1987
The Building Societies Commission, with the consent of the Treasury, in exercise of the powers conferred on it by section 14 of the Building Societies Act 1986(1), and of all other powers enabling it in that behalf, hereby makes the following Order:
1. This Order may be cited as the Building Societies (Isle of Man) Order 1987 and shall come into force on 15th November 1987.
2.-(1) In this Order-
"the Act" means the Building Societies Act 1986;
"relevant form of security" means the form to which paragraph 1 of Schedule 1 to this Order refers;
"relevant provision" means a provision of the Act which applies or has effect in relation to advances secured on land;
"society" means a building society;
"specified territory" means the Isle of Man; and
"territory advance" means an advance which, by virtue of this Order, a society may make.
(2) For the purposes of this Order, a provision of the Act which applies or has effect in relation to advances fully secured on land shall be treated as one which applies or has effect in relation to advances secured on land.
3.-(1) Subject to paragraph (2) below, the specified territory is designated as a territory as respects which advances under section 14 of the Act (power to make advances secured on land overseas) may be made secured on land.
(2) Schedule 1 to this Order shall have effect in respect of-
(a)the forms of security on land which may be taken for such advances,
(b)the circumstances in which such forms of security may be taken,
(c)the conditions subject to which such forms of security may be taken, and
(d)the classification of territory advances (and accordingly of the mortgage debts) as class 1 advances or class 2 advances for the purposes of the requirements of Part III of the Act for the structure of commercial assets,
in relation to the specified territory, and a society shall not have power to make advances secured on land in the specified territory except in accordance with Schedule 1 to this Order.
4. The power conferred by this Order is not available to a society which does not for the time being have a qualifying asset holding, but the cessation of its availability does not require the disposal of any property or rights.
5. The power conferred by this Order shall not require adoption by a society in order to be exercisable by it.
6. Nothing in this Order is to be taken as precluding a society from taking other security for an advance classified as specified in article 3(2)(d) above, but the value of the other security shall be disregarded for the purpose of that classification.
7. Subject to Schedule 2 to this Order, the relevant provisions shall apply or, as the case may be, have effect in relation to territory advances as they apply or have effect in relation to other advances secured on land and in any relevant provision-
(a)any reference to a mortgage shall be construed as including a reference to the relevant form of security, and
(b)any reference to a mortgage debt shall be construed accordingly.
In witness whereof the common seal of the Building Societies Commission is hereinto fixed, and is authenticated by me, a person authorised under paragraph 14 of Schedule 1 to the Building Societies Act 1986, on 13th August 1987.
L.S.
D. B. Severn
Secretary to the Commission
We consent to this Order.
Peter Lloyd
David Lightbown
Two of the Lords Commissioners of Her Majesty's Treasury
20th August 1987
Articles 2 and 3
1. The form of security which may be taken for an advance under section 14 of the Act in relation to the specified territory is the form (known there as a bond and security)-
(a)acknowledging a mortgage debt and obliging the borrower to pay it, and
(b)securing payment of that mortgage debt on land in the Isle of Man,
in respect of which the following provisions of this Schedule are satisfied.
2. Circumstances in which the relevant form of security may be taken for an advance-
(a)do not, subject to Article 6 above, include circumstances in which payment of the mortgage debt is to be secured on an equitable interest in land, and
(b)do not include circumstances in which provision is included as respects either the capital or the interest element in the mortgage debt that the amount due to the society may be adjusted by reference to any index of prices (whether housing prices or other prices) or to a share in the open market value of the land.
3.-(1) A territory advance shall be classified as a class 1 advance for the purposes of the requirements of Part III of the Act for the structure of commercial assets where the society at the time when it makes the advance is satisfied that-
(a)the borrower is an individual,
(b)the land comprising the security is exclusively for the residential use of-
(i)the borrower, or
(ii)the borrower and any person residing with the borrower;
(c)the amount advanced will not exceed the value of the land comprising the security (after deducting from that value any mortgage debt of the borrower to the society outstanding under a relevant form of security relating to that land); and
(d)the land comprising the security will not be security for any advance other than an advance by the society (except where that other advance is postponed to the society's advance).
(2) For the purposes of subparagraph (1) above and paragraph 4 below, where a society makes an advance by instalments, the reference to the time when the society makes the advance is a reference to the time when it pays the first of the instalments.
4. A territory advance shall be classified as a class 2 advance for the purposes of the requirements of Part III of the Act for the structure of commercial assets where the society at the time when it makes the advance is satisfied that the requirements of paragraph 3(1)(c) and (d) above are satisfied but is not satisfied that the requirements of paragraph 3(1)(a) and (b) above are satisfied.
5. If at any time when an advance treated by virtue of this Order as a class 1 advance or a class 2 advance for the purposes specified in paragraphs 3 and 4 above is outstanding the society is satisfied, on notice given to it by the borrower, that there has been a change in the use of the land comprising the security and is satisfied that, had the use been so changed before the making of the advance, the advance would instead have been a class 2 advance or a class 1 advance, as the case may be, for those purposes, the advance shall be reclassified accordingly as from that time.
6. The relevant form of security may only be taken for an advance under section 14 of the Act in circumstances in which the advance is classifiable as a class 1 advance under paragraph 3 above or a class 2 advance under paragraph 4 above.
Article 7
1. Section 10 of the Act (power to make advances secured on land) shall not apply to territory advances.
2. Subsections (1) to (7), (9) to (13) and (15) of section 11 of the Act (classification of advances made under section 10) shall not apply to territory advances.
3. Subsections (1) to (11) and (13) of section 12 of the Act (supplementary provisions) shall not apply to territory advances.
4. Section 13(7) of, and Schedule 4 to, the Act (sale of mortgaged property and discharge of mortgages) shall not apply to territory advances.
5. Section 18 of the Act (power to invest in associated bodies) shall have the effect in relation to territory advances so as to treat them, for the purposes of subsection (4) thereof, as if they were advances secured on land in the United Kingdom.
6. Section 69 of the Act (disclosure and record of income of related businesses) shall have effect in relation to territory advances as if, in subsection (17) thereof -
(a)the definition of "conveyancing services" related additionally to land in the specified territory and included the preparation of conveyances, contracts and other documents in connection with, and other services ancillary to, the disposition or acquisition of estates or interests in that land, and
(b)the definition of "solicitor" included, in relation to the specified territory, an advocate.
(This note is not Part of the Order)
This Order empowers building societies with commercial assets of at least £100 million to make advances on the security of land in the Isle of Man, and provides for the classification of those advances within the asset classification provisions of the Building Societies Act 1986. By virtue of article 5 of this Order, the power to make such an advance does not require adoption by a special resolution of a society in order to be exercisable by it.
This Order provides (article 7 and Schedule 2) for the general treatment of those advances under the Building Societies Act 1986 to correspond to the treatment, under the Act, of advances secured on land in the United Kingdom.
