Plain language law

New Zealand law explained for everyone

Public Works Act 1981

Compensation - Entitlement

67: Compensation for loss on repayment of mortgage

You could also call this:

“Money to help if you have to change your home loan because the government needs your land”

If someone takes or buys your land for a public project, and you have to pay off your mortgage early because of this, you can get some money to make up for any extra costs. This is to help you if the interest rate on your new mortgage is higher than the one you had before.

You can get this money for the time left on your old mortgage, but only up to the amount you still owed. The new interest rate used to figure out how much you get can’t be higher than what other people are paying for similar mortgages in your area.

You can only get this money if you didn’t want your land to be taken or if you only agreed because you were told the land would be taken anyway.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM46372.

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Part 5 Compensation
Entitlement

67Compensation for loss on repayment of mortgage

  1. If, as a direct result of land being taken or acquired under this Act for a public work, any mortgage of that land has to be repaid in whole or in part, the mortgagor whose land is taken or acquired shall be entitled to an amount to compensate him for any loss incurred by reason of any difference in the interest rate fixed under the mortgage of the land taken or acquired and the rate fixed under the mortgage of the land acquired in substitution, during the term for which the principal provided for in the previous mortgage had been advanced, but such difference shall not be calculated on a new interest rate any greater than interest rates prevailing in the locality for an equivalent mortgage up to the balance of the outstanding principal and for the balance of the term.

  2. No person shall be entitled to compensation under this section unless—

  3. he was not a willing party to the taking or acquisition; or
    1. he was a willing party to the taking or acquisition principally because the land had been notified.

      Notes
      • Section 67(1): amended, on , by section 2(7) of the Public Works Amendment Act (No 2) 1987 (1987 No 67).