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Trusts Act 2019

Trustees’ powers and indemnities - Powers of trustee - Protection of purchasers and mortgagees dealing with trustees

80: Protection of purchasers and mortgagees dealing with trustees

You could also call this:

"Safeguarding buyers and lenders when trustees deal with trust property"

Illustration for Trusts Act 2019

If a trustee is selling or mortgaging trust property, this law applies. You do not have to check if the trustee needs the money from the sale or mortgage, or what they do with it afterwards. This law is also subject to the Land Transfer Act 2017 and the Personal Property Securities Act 1999, which are other laws that deal with property. When this law talks about a mortgage or mortgagee, it means the same thing as in section 4 of the Property Law Act 2007. You can trust that the sale or mortgage is legitimate, without having to investigate further, as long as you follow the rules set out in these laws.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS72796.

Topics:
Money and consumer rights > Banking and loansHousing and property > Buying and selling homes
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79: Trustee’s liability limited where notice given to distribute trust property without regard to unknown claims, or

"Trustees are protected if they warn others about distributing trust property and follow the rules."

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81: Trustee’s liability for expenses and liabilities incurred, and trustee’s right to indemnity, or

"What happens when a trustee spends money or gets into debt for the trust"

Part 4Trustees’ powers and indemnities
Powers of trustee: Protection of purchasers and mortgagees dealing with trustees

80Protection of purchasers and mortgagees dealing with trustees

  1. This section applies if a trustee purports to exercise a power (whether statutory, under the terms of a trust, or otherwise) to sell or mortgage trust property or an interest in trust property.

  2. The purchaser or mortgagee is not under any obligation to inquire into whether the money received by the trustee as a result of the sale or mortgage is needed, or how that money is later dealt with, by the trustee.

  3. This section is subject to the Land Transfer Act 2017 and the Personal Property Securities Act 1999.

  4. In this section, mortgage and mortgagee have the same meanings as in section 4 of the Property Law Act 2007.

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