Family Home Protection Act

TheRevolution

I am studying the Family Home Protection Act and I am a little confused.

In my notes I have the following regarding the need to get a spouse's consent
Exceptions to the need for consent:
• Agreements made prior to marriage
• Conveyance to a purchaser for full value
• Conveyance of an interest by someone other than a spouse
• Orders for sale under the Family Law Act 1995, and the Family Law (Divorce) Act 1996


Just on the ones in bold, Does the first one mean that if the legal title owner spouse sells the property for its full value then he/she no longer needs consent??? How does that protect the non title spouse?

Secondly, can someone explain what the second one means?

Peregrinus

“Conveyance to a purchaser for full value”

“Purchaser” is defined in s. 3(6) as a person who acquires an interest in the property in good faith. A person who buys the property without seeing that the spouse’s consent is obtained, or without establishing that there is no spouse (e.g. by getting a statutory declaration to that effect from the vendor), or doing something of the kind, is at risk of being found not to have acted in good faith. Such a person would not be a “purchaser” and therefore the conveyance would be void. Hence buyers do, as a matter of course, investigate whether the seller is married, and require an FHPA consent from the spouse if it seems to be necessary, or alternatively they look for evidence that it isn’t necessary.

This isn’t foolproof. I could sell my house, presenting my mistress as my wife, and getting her to forge my wife’s name to a consent form. If the buyer has no reason to suspect this he is acting in good faith, and he gets good title the house. My aggrieved spouse may have a remedy against me and against my mistress, but in that situation I think she would have no claim on the house.

“Conveyance by someone other than the spouse”

Say I’m a bank. I hold a mortgagee’s interest in your house. I got that under a mortgage granted with your spouse’s consent, or maybe under a mortgage that you granted before you married; it doesn’t matter. I’m getting out of the mortgage business, so I sell my loan book, and all the securities I hold, including my interest in your house, to another bank. I don’t get your spouse’s consent to assign my interest in your house to that other bank. The conveyance is valid, because it’s a conveyance by a bank, and not by a spouse.

Same goes if A, with his spouse’s consent, contracts to sell the house to B and the, before the sale of the house is completed, B sells on his interest under the contract to C. B does not need the consent of A’s spouse.

TheRevolution

Thank you for clearing that up.

ThreeLineWhip

What would happen if a spouse obtained a mortgage without the consent of the other spouse?

Peregrinus

The bank doesn't have a claim on the property unless they took the mortgage "in good faith". Assume the house is registered in the name of A, and A has (since buying the house) married B. A applies for a loan, and offers the bank a mortgage over the house as security. Before accepting the security the bank should enquire (a) are you married, and (b) is this property your family home? In fact, they will ask A to make a sworn declaration on these points.

If A swears that he is unmarried, and if the bank has no reason to doubt this, and accordingly extends the loan and takes the security over the house without B's consent (or knowledge) the bank is acting in good faith and gets a valid mortgage. But if the bank hasn;t made proper enquiries or has ignored circumstances that should have aroused its suspicion, they haven't acted in good faith and won't get a valid mortgage.