The question of the policy and administration required to deal with the situation when the Corporation were required to purchase back a municipal house from an owner-occupier led to a Joint Conference being convened on May 18th 1931:

REPORT OF PROCEEDINGS AT A CONFERENCE BETWEEN THE CHAIRMEN AND EXECUTIVE OFFICERS OF THE BANK, ESTATES, FINANCE, AND PUBLIC WORKS AND TOWN PLANNING COMMITTEES, HELD ON MONDAY, THE 18th MAY, 1931, AT THE COUNCIL HOUSE, TO CONSIDER QUESTIONS ARISING IN CONNECTION WITH MUNICIPAL HOUSES IN MORTGAGE TO THE BANK.

PRESENT:

Alderman Sir Percival Bower, MBE, JP, & Mr J P Hilton - Representing the Bank Committee

Councillor Dalton & Mr Wallace Smith (General Manager) - Representing the Estates Committee

Alderman S J Grey, Mr J R Johnson (City Treasurer) & Mr Wallond - Representing the Finance Committee

Alderman T B Hooper & Mr H H Humphries (City Surveyor) - Representing the Public Works & Town Planning Committee

Together with:

The Deputy The Town Clerk, and Committee Clerks to the Bank, Estates & Public Works & Town Planning Committees.

The Conference proceeded to elect a Chairman, and it was unanimously resolved that Alderman Sir Percival Bower be appointed Chairman of the Conference.

The following Minute of the Finance Committee passed at a meeting held on the 24th April 1931, was received:

Re-purchase of Municipal Houses.

3091. Resolved: That it be recommended from this Committee that the whole matter should be referred for discussion by a joint Sub-Committee consisting of the Chairmen and executive officers of the Bank, Estates, Finance and Public Works Committee, with a view to their arriving at an agreed policy upon the suggested repurchase of the houses in certain circumstances, and as to the fixing of the amount at which the property in question should be acquired by the Corporation at their bidding, in the event of bids at an auction sale being substantially below the amount outstanding due to the Municipal Bank (including the amount of the Finance Committee's guarantee) plus a provision for legal and other professional charges.

The Chairman referred to the memorandum which had been circulated to each member of the Conference and outlined the circumstances which had led up to the decision of the Finance Committee to refer the matter to the Joint Conference.

The Chairman pointed out that the procedure proposed by the Conference held on the 5th March 1931, whereby the Bank, before exercising the powers of sale, were required to submit arrear cases (where the Finance Committee had guaranteed excess advances)  to that Committee for advice as to the selling price of the houses, resulted in delay, during which the arrears under the mortgages increased. He was therefore of opinion that it would be preferable to follow the course adopted in regard to the sale of non-Corporation houses in similar circumstances; ie, that the houses should be put up by the Bank for sale by auction, a reserve being fixed by the Bank sufficient to cover the amount outstanding under the mortgage, plus charges and incidental expenses. In the event of the reserve price not being reached the properties should be withdrawn and disposed of privately. In carrying out this policy in the past the Bank had been able in every case to successfully dispose of the properties without loss. The Chairman therefore submitted the following recommendations:

1. That the proposal that the cases in question should be submitted to the Finance Committee to advise as to the sale price of the houses, be abandoned.

2. That the Bank should put up such properties for sale by auction at a reserve sufficient to clear the mortgage with expenses and charges.

3. That if the reserve is not reached the property should be withdrawn and disposed of privately by the Bank.

4. In carrying out these arrangements it should be an understanding that the Bank should advise the Finance Committee of the amount fixed as a reserve for the sale by auction to give the Finance Committee an opportunity, if they wish to do so, to arrange for the houses to be re-acquired by the Corporation, and for the liabilities to the Bank to be discharged.

The Deputy Town Clerk explained the legal difficulty which arose in question with the re-purchase of a mortgaged property by the Corporation, in which case it would seem necessary to obtain the surrender from the Mortgagor.

The City Treasurer submitted figures as to the financial effect of the sale of Corporation houses and pointed out that these sales resulted in a considerable saving to the Corporation when the annual charges which would be involved were such houses placed in the letting pool were considered.

It was also pointed out by the Chairmen of the Estates and Finance Committees that if the houses reverted to the Corporation substantial sums might be involved in putting the properties into a proper state of repair.

After discussion, the Chairmen of the Estates, Finance and Public Works & Town Planning Committees acquiesced in the proposals of the Chairman. It was further agreed that in cases in which the Bank are unable to dispose of properties upon which the Finance Committee have guaranteed excess advances, at prices sufficient to discharge the mortgage and incidental expenses, the Finance Committee should be asked to consent to the sales at lower prices if this course be necessary.

The Conference accordingly decided to recommend the Committees concerned to approve the following proposals:

1. That the proposal recommended by the Joint Conference of 5th March, 1931, that the Finance Committee should advise as to the selling price of Municipal houses in mortgage to the Bank be abandoned.

2. That the Bank put up the properties in question for sale by auction at a reserve sufficient to clear the mortgage with incidental expenses and charges.

3. That should the reserve not be reached such properties are to be withdrawn and, if possible, disposed of privately by the Bank Committee.

4. That in carrying out these arrangements it be an understanding that the Bank advise the Finance Committee of the amount fixed as reserve for the sale by auction to give the Finance Committee an opportunity of arranging for the houses to revert to the Corporation if this course is considered desirable.

5. That in cases where the Bank Committee are unable to dispose of a property upon which the Finance Committee have guaranteed an excess advance, at an amount sufficient to discharge the mortgage and incidental expenses, the Finance Committee should be approached either for their sanction to the sale at a lower price, if this course should be desirable, or with a view to the Finance Committee arranging for the house to revert to the Corporation on discharge of the mortgage.

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Clarification of the policy and procedure agreed at the conference of May 18th was sought at a further meeting:

REPORT OF PROCEEDINGS AT A CONFERENCE BETWEEN REPRESENTATIVES OF THE BANK, ESTATES, FINANCE AND PUBLIC WORKS AND TOWN PLANNING COMMITTEES, HELD ON MONDAY, THE 14TH DECEMBER, 1931, IN THE TREASURER'S ROOM, TO CONSIDER QUESTIONS ARISING IN CONNECTION WITH THE RE-PURCHASE OF CORPORATION HOUSES.

PRESENT:

Alderman Sir Percival Bower, MBE, JP, Councillor Cooper & Mr J P Hilton - Representing the Bank Committee

Councillor Pritchett & Mr Wallace Smith (General Manager) - Representing the Estates Committee

Alderman S J Grey & Mr J R Johnson (City Treasurer) - Representing the Finance Committee

Councillor T B Hooper - Representing the Public Works & Town Planning Committee

The Town Clerk

Alderman Grey was appointed Chairman of the Conference.

The Chairman reminded the meeting of previous Conferences on the subject of the re-purchase of Corporation houses in mortgage to the Municipal Bank, and said that as a result of informal discussions he had had it seemed desirable that a clear understanding should be arrived at with due regard to the interests of the Corporation with a view to the avoidance of proceedings being launched against the Bank by any dissatisfied mortgagor.

The Conference agreed first of all that, in all cases when the sale of the mortgaged property is involved, it was essential that the property should be offered for sale by public auction in the first instance.

The Conference also recognised as a general principle that a mortgagor was the owner of the property in mortgage and was entitled to all benefits derivable therefrom. Further, that the mortgagee was merely the lender of a sum of money for which the property was pledged as security, and that strictly speaking he was only entitled to receive back his principal with agreed interest and his costs of obtaining payment and of discharging the mortgage.

In dealing, however, with these cases there were certain special circumstances which required to be taken into consideration.

The Conference further accepted the principle that in cases of misfortune which warranted special consideration the Corporation should adopt the normal, everyday course and hand over to the mortgagor any surplus proceeds of re-sale, after the payment of principal, interest, repairs, and costs.

After full discussion, the Conference decided to recommend the Committees concerned to approve the following arrangements, namely:

(1) In all cases of default by a mortgagor to make his repayments of principal and interest to the Municipal Bank, (where the Bank have decided that the property must be disposed of), the house shall be offered for sale by the Bank by public auction in the first instance.

(2) If the proposed sale by public auction proves abortive and there is little margin between the value of the property and the amount outstanding on the mortgage, and if during a period of one month from the date of the auction the mortgagor is unable to find a purchaser by private treaty, the matter shall be referred to the Estates Department. The Estates Department, subject to their obtaining from the mortgagor an assignment or surrender to the Corporation of his interest in the property, shall then take over and assume responsibility for the sale of the premises.

(3) In other cases of abortive sale by public auction where the mortgagor has paid off a considerable amount of the mortgage debt, every consideration shall be shown to him by the Bank, and special cases shall be treated on their merits, before the matter is referred to the Estate Department with a view to their obtaining a surrender or assignment of the mortgagor's interests in the property in favour of the Corporation.

(4) Assuming the conditions specified in paragraphs (2) and (3) above have been observed, and the property is not sold or the mortgage debt not discharged, the Corporation (through the Estates Department) in such cases shall request a surrender or assignment from the mortgagor of his remaining interest in the property in consideration of the Corporation foregoing any further claims against him in respect of the mortgage debt.

In that event, and assuming a sale of the property is subsequently effected, the Corporation shall be entitled to retain any surplus remaining over from the proceeds of such sale after discharging the loan advanced by the Bank, Finance, and Estates Committees, and legal charges in connection with the disposal of the property.

(5) In cases of re-sale by the Corporation (through the Estates Department) it is agreed that the same low deposit facilities as are obtainable at present by purchasers of Corporation houses in the ordinary way may be offered to the intending purchaser.

(6) In cases where repairs and redecorations are necessary before a re-sale, the consent of the mortgagor shall be first obtained where no assignment of the equity or surrender has been taken.