New South Wales Consolidated Acts

TRUSTEE ACT 1925 - SECT 18

18 Ratio of loan to value

(1) A trustee lending money on the security of any property on which the trustee can lawfully lend shall not be chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property at the time when the loan was made, provided that the loan was made in accordance with this section.

(2) In making the loan the trustee must have acted upon a report as to the value of the property made by a valuer of land, registered under the Valuers Act 2003 , instructed and employed by the trustee independently of any owner of the property.

(3) The amount of the loan must not exceed:

(a) two-thirds of the value of the property as stated in the report, or

(b) 95 per cent of the value of the property as stated in the report if:

(i) the repayment of the loan is insured under a contract of insurance issued by a prescribed insurer, and

(ii) the mortgagee is the assignee of the benefit of that contract of insurance.

(4) The loan must have been made under the advice of the valuer expressed in the report.

(5) This section extends to transfers of existing securities as well as to new securities.

(6) This section applies to investments made either before or after the commencement of this Act.