Loan Agreement And Mortgage for New Zealand

Loan Agreement And Mortgage Template for New Zealand

A comprehensive legal document governed by New Zealand law that combines a loan facility agreement with a mortgage security instrument. It establishes the terms and conditions of a loan facility while simultaneously creating a security interest over real property. The document complies with New Zealand's Credit Contracts and Consumer Finance Act 2003 and Property Law Act 2007, incorporating mandatory consumer protection provisions and disclosure requirements. It details the loan terms, repayment obligations, security arrangements, borrower covenants, and enforcement mechanisms available to the lender.

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What is a Loan Agreement And Mortgage?

The Loan Agreement And Mortgage is a fundamental document in New Zealand's secured lending practice, essential for both residential and commercial property transactions. It serves a dual purpose by documenting the loan facility terms while simultaneously creating a registrable security interest over real property. This document type is commonly used by banks, financial institutions, and private lenders when providing secured financing, whether for property purchases, refinancing, or other funding purposes. It must comply with New Zealand's regulatory framework, including the Credit Contracts and Consumer Finance Act 2003, Property Law Act 2007, and Anti-Money Laundering legislation. The document includes comprehensive provisions covering loan terms, security arrangements, borrower obligations, and enforcement rights, making it suitable for various lending scenarios while providing adequate protection for all parties involved.

What sections should be included in a Loan Agreement And Mortgage?

1. Parties: Identifies and defines the Lender, Borrower, and any Guarantors with their full legal names and addresses

2. Background: Sets out the context of the loan and mortgage, including the purpose of the loan and the property being offered as security

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes rules for interpretation

4. Loan Details: Specifies the loan amount, interest rate, term, and purpose of the loan

5. Drawdown: Conditions precedent and process for drawing down the loan

6. Interest: Details of interest calculation, payment periods, and default interest provisions

7. Repayment: Terms for repayment including payment schedule, prepayment rights, and fees

8. Security: Details of the mortgage security, including property description and charging provisions

9. Borrower's Covenants: Obligations of the borrower regarding property maintenance, insurance, rates payment, and other ongoing commitments

10. Representations and Warranties: Statements of fact and assurances given by the borrower

11. Events of Default: Circumstances constituting default and consequences thereof

12. Lender's Rights and Remedies: Powers and rights of the lender upon default, including power of sale

13. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution

What sections are optional to include in a Loan Agreement And Mortgage?

1. Guarantees: Required when there are guarantors securing the loan obligations

2. Insurance Requirements: Detailed insurance obligations when specific insurance types are required beyond standard property insurance

3. Construction Covenants: Required for construction loans or when property improvements are part of the loan purpose

4. Multiple Securities: Required when multiple properties or other assets are provided as security

5. Cross-Collateralization: Used when the mortgage secures other obligations beyond this specific loan

6. Specific Purpose Covenants: Required for loans with specific purposes (e.g., business, development)

7. Property Lease Provisions: Required when the secured property is or may be leased

8. Priority Arrangements: Required when there are multiple security holders or ranking arrangements

What schedules should be included in a Loan Agreement And Mortgage?

1. Schedule 1 - Property Description: Legal description of the mortgaged property including title references

2. Schedule 2 - Payment Schedule: Detailed repayment schedule including payment dates and amounts

3. Schedule 3 - Loan Terms Summary: Summary of key financial terms as required by CCCFA disclosure requirements

4. Schedule 4 - Special Conditions: Any special or non-standard conditions applying to the loan

5. Schedule 5 - Insurance Requirements: Detailed insurance requirements and minimum coverage amounts

6. Schedule 6 - Fees and Charges: Complete schedule of all applicable fees and charges

7. Appendix A - Form of Drawdown Notice: Template for requesting loan drawdowns

8. Appendix B - Direct Debit Authority: Form for setting up automatic payment arrangements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

New Zealand

Publisher

Genie AI

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Real Estate

Property Development

Construction

Commercial Property

Residential Property

Legal Services

Mortgage Broking

Investment

Relevant Teams

Legal

Credit

Risk Management

Compliance

Loan Operations

Property Finance

Commercial Banking

Retail Banking

Real Estate Finance

Documentation

Mortgage Operations

Security Administration

Relevant Roles

Loan Officer

Credit Manager

Mortgage Specialist

Legal Counsel

Compliance Officer

Risk Manager

Property Manager

Commercial Banker

Retail Banking Manager

Credit Analyst

Underwriter

Relationship Manager

Banking Executive

Finance Manager

Real Estate Manager

Property Developer

Chief Risk Officer

Chief Legal Officer

Industries
Credit Contracts and Consumer Finance Act 2003: This Act regulates credit contracts, including loan agreements. It sets out disclosure requirements, unfair contract terms provisions, and lender responsibilities for consumer credit contracts.
Property Law Act 2007: This is the primary legislation governing real property in New Zealand, including mortgages. It sets out the formal requirements for creating mortgages, the rights and obligations of mortgagors and mortgagees, and enforcement provisions.
Anti-Money Laundering and Countering Financing of Terrorism Act 2009: This Act requires lenders to conduct customer due diligence and verify the identity of borrowers before entering into loan agreements.
Personal Property Securities Act 1999: This Act is relevant if the loan agreement includes security over personal property in addition to real property. It governs the creation and registration of security interests in personal property.
Contract and Commercial Law Act 2017: This Act contains general contract law principles that apply to loan agreements, including formation, interpretation, and enforcement of contracts.
Land Transfer Act 2017: This Act governs the registration of mortgages on the land title register and the priority of registered interests in land.
Fair Trading Act 1986: This Act prohibits misleading and deceptive conduct in trade, which applies to the marketing and negotiation of loan agreements.
Privacy Act 2020: This Act governs how lenders must handle borrowers' personal information and credit reporting.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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