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3/1989 Further Advances - Net Proceeds

Document

Central Office Instruction

Instruction No. 3

Date of Effect: 13 April 1989

FURTHER ADVANCES - NET PROCEEDS

The purpose of this Instruction is to cancel the longstanding 'net proceeds' policy.

Provision to reduce the amount of a further advance for this reason was not included in the 1988 revision of the DSH Act. We have been considering whether to pursue an amendment of the Act to give legislative support to this policy. However, as very little benefit is gained from the policy, we have decided to abandon the policy and not to seek an amendment to the Act.

It will be necessary to review any cases where the policy has been applied since 19 December 1988 - that is, where approval to a further advance has been given by the Minister or his delegate, but a Certificate of Entitlement was refused or a Certificate of Entitlement was issued specifying an amount less than the former liability as a result of the 'net proceeds' policy. Such clients should be contacted and advised, in terms of the above paragraph, of the amended amount of advance and invited to discuss with us the means available to take advantage of the increased amount. This may include refinancing other borrowings over the property. An amending Certificate of Entitlement should then be issued. Any claims for compensation should be referred to CO without any admission of liability.

A revised Form 78 - Second Assistance Conditions has been separately supplied to each State Manager. It will no longer be necessary to provide details of liability, sale price etc., unless a request for an increase over liability is being made, when submitting cases to CO for decision.

General Orders Replacement Page Issue No. 1 is attached. This Instruction has no effect on any previously issued COI (new series).

Don Faget

for GENERAL MANAGER

2 June 1989