QLD Mortgages over lot to be sub-divided - how to address

[ray63]

We plan to subdivide our lot (Lot A in RPxxxxx) into a Lot 1 for a house and Lots 2 and 3 in a two lot community scheme (Lots 1, 2 and 3, in SP xxxxx).

Lot A is currently mortgaged to a bank, with a second mortgage to the trustee of my family trust. There is a deed of priority in favour of the bank.

Our intention is to retain all three houses.

When the plans are sealed and the new titles issued, can the existing mortgages stay in place? This would presumably mean that all of the three new lots are encumbered by the mortgage. Or do we need to discharge the mortgages over Lot A, and have up to three new mortgages for the bank, and three new mortgages for the trust, over each of the new lots. (Bank may only need security to the value of one property, but we'd want the trust to mortgage the lot)

If the current two mortgages can remain in place, then that makes life easier until we decide to sell one or more properties, when presumably we would need to discharge the mortgages over Lot A, and, if necessary, establish new mortgages over the Lots in SP xxxxx that we retain.

What can we/do we need to do with regards to the mortgages?

Is there anything else I should be aware of?

 

[Rob Legat - SBPL]

The mortgages can stay in place. You will need formal consent from each mortgagee (Form 18 - General Consent) for each plan of subdivision - which must be lodged with the plan in the Titles Office. They won't be registered without the consents, and the plans will be requisitioned.

When the new titles issues, the mortgages will be on each lot except the common lot (lot 0) in the community titles scheme.

 

[ray63]

Thanks Rob.

I understand you (and Form 18) are saying that the consent being provided in Form 18 is under the Mortgage over the original RP. (item 3), and by each Mortgagee (one form 18 for each mortgagee)

When you say 'each plan of subdivision', does that mean at there is a Form 18 for each lot within the subdivision? ie each Lot under the newly created SP. (ie 3 lots x 2 (one for each mortgagee) = six Form 18's) If the subdivision includes easements, does Form 18 need to give consent to the Form 9's creating those easements (ie be referenced in Item 2 of Form 18).

And is consent separately required for the CMS?

It would be more logical if one Form 18 (for each mortgagee) addresses all the documents required for a subdivision and CMS, which would include new Survey Plan (Form 21), easements (Form 9), CMS (Form 14),+ other? - but maybe simplicity doesn't apply.

 

[Rob Legat - SBPL]

You need consent to each plan - not each lot. So, it appears you're dividing a current parcel of land in two, and then sub-dividing one of those parts into a community titles scheme. That's two plans - two consents for each mortgagee.

Each consent should cover the relevant documents being lodged with the consent . For example, if you're lodging the plan and two easements together, each mortgagee's consent should note the plan and the two easements. If you're lodging separately, you'll need a new consent for each lodgment.

You don't need consent to a community management statement. They're mandatory when you create a community titles scheme.