New South Wales Consolidated Acts

CONVEYANCING ACT 1919 - SECT 114

114 Amount and application of insurance money

(1) The amount of an insurance effected by a mortgagee or chargee against loss or damage by fire under the power in that behalf conferred by this Act shall not exceed the amount specified in the instrument creating the mortgage or the covenant under which the charge arose, or if no amount is therein specified, the full insurable value of the buildings upon the mortgaged or charged land, or the amount owing to the mortgagee or chargee in respect of the mortgage or charge.

(2) An insurance shall not, under the power conferred by this Act, be effected by a mortgagee or chargee in any of the following cases, namely--

(a) Where there is a declaration in the instrument creating the mortgage or the covenant under which the charge arose that no insurance is required.

(b) Where an insurance is kept up by or on behalf of the mortgagor or person whose land is subject to the charge in accordance with that instrument.

(c) Where that instrument contains no stipulation respecting insurance and an insurance is kept up by or on behalf of the mortgagor or person whose land is subject to the charge to the amount in which the mortgagee or chargee is by this Act authorised to insure.

(3) All money received on an insurance effected under the instrument creating the mortgage or the covenant under which the charge arose, or under this Act, shall, if the mortgagee or chargee so requires, be applied in making good the loss or damage in respect of which the money is received.

(4) Without prejudice to any obligation to the contrary imposed by law or by express contract, a mortgagee or chargee may require that all money received on an insurance effected under the instrument creating the mortgage or the covenant under which the charge arose, or under this Act, be applied in or towards discharge of the money secured by the mortgage or charge whether due or not.