TRUSTEE ACT 1936 - SECT 25

TRUSTEE ACT 1936 - SECT 25

25—Powers of trustee as to insurance

        (1)         A trustee may insure any building or other insurable property against loss or damage whether by fire or otherwise and against any risk or liability against which it would be prudent for a person to insure if he were acting for himself.

        (2)         The amount for which any property is insured (including any amount of insurance already on foot) shall not exceed the full value of the property: Provided that the full value shall not be limited for the purposes of this section to the sale value of the property but shall include the replacement cost as at times material as well as indemnity against loss of rent and other collateral risks.

        (3)         A trustee may pay the premiums for such insurance out of any income from the property insured or out of the income of any other property subject to the same trusts, without obtaining the consent of any person, notwithstanding that there may be a person entitled wholly or partly to such income.

        (4)         If there is no such income or to the extent to which such income is deficient (for which purpose all other outgoings payable from such income whether discretionary or not may be brought into account by the trustee) the trustee may borrow the necessary money for paying the premiums and may give security over the property insured or over any other property subject to the same trusts. The principal of the money so borrowed and the interest thereon shall be repaid out of any income from the property insured or out of the income of any other property subject to the same trusts, if there is any such income available for the purpose; and if there is no such income, or if such income is insufficient, the said principal and interest, or, as the case may be, that part of the said principal and interest which is in excess of the income available for payment thereof, shall be repaid out of the capital of any property subject to the same trusts.

        (5)         Where a policy of insurance against the loss or damage of any property subject to a trust, whether by fire or otherwise, has been kept up under any trust in that behalf, or under any power statutory or otherwise, or in performance of any obligation statutory or otherwise, the money receivable by a trustee under the policy shall except to the extent to which it is receivable in respect of loss of rent or other collateral risk as aforesaid, be capital money for the purposes of the trust.

        (6)         If the money is receivable in respect of property held upon trust for sale, it shall be held upon the trusts and subject to the powers and provisions applicable to money arising by a sale under the trust.

        (7)         In any other case the money shall be held upon trusts corresponding as nearly as may be with the trusts affecting the property in respect of which it was receivable.

        (8)         Notwithstanding subsection (6) of this section, and whether the property in respect of which the money is receivable is held upon trust for sale or not, the money or any part thereof may also be applied by the trustee, or, if in Court, under the direction of the Court, in rebuilding, reinstating, replacing, or repairing the property lost or damaged.

        (9)         Any such application by the trustee shall be subject to the consent of any person whose consent is required by the instrument, if any, creating the trust to the investment of money subject to the trust.

        (10)         Nothing in this section shall prejudice or affect the right of any person to require the money or part thereof to be applied in rebuilding, reinstating or repairing the property lost or damaged.

        (11)         Nothing in this section shall prejudice or affect the rights of any mortgagee lessor or lessee, whether under any statute or otherwise.

        (12)         This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to the provisions therein contained.

        (13)         This section applies to trusts created and to policies issued either before or after the commencement of the Trustee Act Amendment Act 1941 but only to money received after that commencement.