Queensland Consolidated Acts

BUILDING UNITS AND GROUP TITLES ACT 1980 - SECT 58

58 Insurance of mortgaged lot

(1) A contract of insurance may be entered into by a proprietor in respect of damage to the proprietor’s lot in a sum equal to the amount secured at the date of the contract by mortgage of the proprietor’s lot and where such a contract is in force—

(a) subject to the terms and conditions of the contract—

(i) a payment to be made under that contract by the insurer in respect of damage shall be made to each mortgagee whose interest is noted thereon in order of the mortgagee’s respective priority; and

(ii) the amount of the payment shall be the amount stated in the contract, the amount of the loss, or an amount sufficient, at the date of the loss, to discharge the mortgage of the lot, whichever is the least amount; and

(b) where the amount so paid by the insurer equals the amount necessary to discharge a mortgage of the lot—the insurer shall be entitled to an assignment of that mortgage; and

(c) where the amount so paid by the insurer is less than the amount necessary to discharge a mortgage of the lot—the insurer shall be entitled to secure the amount so paid by a transfer of the bill of mortgage to the insurer and the mortgagee as tenants in common in undivided shares proportional to the amount paid by the insurer and the balance necessary to discharge the mortgagee’s interest.

(2) A contract of insurance entered into as referred to in subsection (1) shall not be liable to be brought into contribution with any other such contract of insurance except another such contract of insurance which—

(a) is in respect of damage to the same lot; and

(b) relates to the same mortgage debt;

as that referred to in the contract of insurance firstmentioned in this subsection.