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New Zealand law explained for everyone

Local Government Act 2002

Consequential amendments, repeals, revocations, transitional provisions, and savings - Transitional provisions

301: Consent required for release of sinking fund

You could also call this:

“You need permission to get money from a special savings account for loans”

If you have a sinking fund for a loan that was set up before this law came into effect, you can ask for the money in the fund to be given to you. You can do this within 4 months, but you need to get permission first.

To get permission, you need three things. First, the people who manage the sinking fund (called Commissioners) need to agree in writing. Second, the person or people you owe money to (called creditors) need to agree. If you owe money to more than one person, either all of them need to agree, or some of them can agree if there’s enough money in the fund to pay back the others who didn’t agree.

Before you ask for the money from the sinking fund, you need to make sure you have enough money elsewhere that you can easily access. This is to make sure you can still pay back your loan when it’s due.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM174232.

Topics:
Money and consumer rights > Banking and loans
Government and voting > Local councils
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Part 12 Consequential amendments, repeals, revocations, transitional provisions, and savings
Transitional provisions

301Consent required for release of sinking fund

  1. If a sinking fund established by a local authority for the repayment of any loan is in existence immediately before the commencement of this section, the local authority may, if consent is given in accordance with subsection (2), require the release to the local authority within 4 months of all amounts standing to the credit of that sinking fund or the transfer of the securities in which those amounts are invested.

  2. Consent is given in accordance with this subsection if—

  3. consent is given in writing; and
    1. consent is given by the Commissioners of the sinking fund; and
      1. consent is given by—
        1. the creditor of the relevant loan; or
          1. if there are 2 or more creditors of the relevant loan,—
            1. all creditors of the relevant loan; or
              1. some creditors of the relevant loan, if the sinking fund is sufficient to repay the balance of the loan on maturity in respect of amounts owed to creditors who do not consent.

            2. Before a local authority makes a request for the release of a sinking fund under subsection (1), it must ensure that the local authority will have available, in easily realisable funds, such amounts as may be required to repay the principal or interest of the loan when the principal or interest becomes payable.

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