The legislation provides that a property, subject to a Corporation advance or subsidised advance, cannot be transferred unless a delegate has issued a certificate of entitlement to the proposed transferee.  This does not apply to a transmission of the property to an executor or administrator of the estate following the death of the borrower or in the case of survivorship in joint tenancy holdings.  The restrictive provision of section 22(1) in relation to transfers does not apply to assigned advances.

A transfer includes all agreements or arrangements providing or purporting to provide for the transfer, grant or disposal of an estate or interest, either legal or equitable, in a property, and includes an option to acquire such an interest.

A delegate can only issue a certificate of entitlement where he/she has carefully examined all the circumstances of the case and is satisfied, in accordance with the guidelines, that it is reasonable to do so.

Where the Corporation advance or subsidised advance is to be discharged at the same time the transfer is to be effected, no DSH approval to the transfer is required.

If the transferee is an eligible person, he or she may apply for assistance in the normal way.

Requests for a certificate of entitlement to transfer a property, subject to a subsidised advance, to an ineligible person will be refused.  In this case the Corporation advance or subsidised advance must be discharged or renegotiated with the Bank at the time of transfer.  Subsidy will cease at the time of transfer.

Section 22 of the Defence Service Homes Act 1918 provides for a Certificate of Entitlement to be issued in relation to a transfer.  Sub-section 22(3) provides that a certificate under this section may be issued only to a proposed transferee who is an eligible person.  Where both parties are eligible requests for a certificate of entitlement to transfer a property, subject to a subsidised advance will be refused unless the request relates to the transferee's loan entitlement.

This is to protect each eligible person's loan entitlement for individual use. Requests of this nature may arise as part of a marriage property settlement.   Sub-section 22(5) provides for certain conditions to be contained in the certificate to be issued.  In particular ss22(5)(b) and (c) provide for the Secretary to specify the maximum amount and term in respect of which subsidy will be paid.  Where the current DSH loan stemmed from the service of the property transferor, the transfer request will be refused, but the transferee is to be informed of the option of applying for either an Initial or Further Advance based on his/her own service, to re finance the property. Such an application would need to satisfy the other usual conditions.

Where the current loan stemmed from the service of the property transferee, the certificate may be issued on the basis that it is that person's loan entitlement that is being transferred.  Where the transferor and transferee have pooled their entitlements the certificate issued to the transferee will be limited to that person's individual loan entitlement.  The transferor may take up his/her portability benefit on another property at any time after the transfer takes effect, provided the original mortgage is discharged contemporaneously with the registration of the new mortgage in single tenancy.  Alternatively he/she must be released from the personal covenants of the mortgage if it remains 'on foot'.  Generally, Westpac require the execution of a new mortgage by the transferee and open a new loan account in the transferee's name.  There has been the odd case where the the transfer is effected (based on transferee's entitlement) subject to the existing mortgage and loan because the transferor is responsible for the repayments under the terms of the Property Settlement.  In this situation, the transferor is prevented from obtaining a Further Advance based on his /her entitlement because he/she is still a borrower as defined in the Act.

A request by an eligible person for a certificate of entitlement to transfer to joint tenancy with a spouse may be approved subject to production of satisfactory evidence of a de jure or de facto marriage.

If a Corporation advance or subsidised advance was taken over by an ineligible person (generally due to Family Law transfer consented to prior to 8/1/91), any request from that ineligible person for a certificate of entitlement to transfer to joint tenancy with:

• another ineligible person, will be refused.
• an eligible person, may be granted. However, such a transfer will remove the eligible person's right to apply for initial assistance under his or her own eligibility, as he or she will become a borrower under the legislation on the completion of the transfer and the Bank complying with the terms of the certificate.  Alternatively, the eligible person may apply for initial assistance in the normal way.

An order by a Court vesting the estate or interest in a property in a person or persons, is not legally a transfer until recorded on the Certificate of Title. However, if the vesting order is made subject to the consent of DSH, a certificate of entitlement for the transfer may be issued. Such consent may be given only where the circumstances would allow a certificate of entitlement to be issued in accordance with the legislation ie. the transferee is an eligible person.

Requests for a certificate of entitlement to transfer a property, subject to a subsidised advance, to an ineligible person will be refused.  In this case the Corporation advance or subsidised advance must be discharged at the time of transfer and subsidy must cease.  Options which may be available to an ineligible spouse are:

• leaving the property in the joint names of the eligible person and spouse (eligible person could not obtain Further Advance in this situation);
• approaching Westpac for a transfer of the loan on an unsubsidised basis;
• re financing through another financial institution; or
• selling the property.

If a person transfers a property or an interest in a property which is subject to a Corporation advance or subsidised advance, without the consent of DSH, a delegate can issue a certificate of entitlement in relation to the transfer only if the transfer is such that it would have attracted a certificate of entitlement if it had been submitted for a certificate prior to the transfer ie. the transferee is an eligible person or the transfer was one from the single tenancy of an eligible person into joint tenancy with his or her spouse. This is also provided no subsequent event would warrant consent being withheld.

Where the transfer is one which would not have attracted a certificate of entitlement, the subsidy may be cancelled in accordance with Section 26 of the Act.  Subsidy paid since the day of the transfer may also be recovered in accordance with Section 29.  Full details on the cancellation and recovery of subsidy are contained in Chapters 6 and 7 of Part 4 Subsidy Administration General Orders.

Section 17A of the Defence Service Homes Act 1918 sets out the criteria for issuing a certificate of entitlement in joint names or as tenants in common.  Accordingly, a subsequent transfer to a tenancy in common may be approved subject to the requirements of section 22 being met.  The removal of the power to transfer to an ineligible person means that a transfer to a tenancy in common situation can now be effected only if the applicant transferee is an eligible person.  In reaching the conclusion in accordance with subsection 22(2) that in all the circumstances it is reasonable to issue a certificate in relation to the transfer, the tenancy equity rule specified in subsection 17A(2) is to be satisfied.  An application from an ineligible spouse to transfer to tenancy in common should be refused in accordance with subsection 22(3) of the Act.  An application from the eligible person where that person's proposed equity is to be less than the amount of the subsidised loan should be refused in accordance with subsection 22(2)(a) because, in all the circumstances, it is not reasonable to approve the issue of a certificate.  The circumstance which is unreasonable is the non-compliance with subsection 17A(2) of the Act.

(a) Where the transferee is an eligible person, including widow/widower and dependent parents, he or she must apply for a certificate of entitlement in accordance with the legislation.

(b) Where the transferee is an ineligible person the subsidy will be cancelled.

Upon the death of a joint tenant and the survivor becoming the sole owner of the property, the interest which the deceased had in the property does not form part of the estate. Therefore there is no transfer as such in these circumstances, as the interest of the deceased transmits automatically to the survivor.  This action is completed on registration of a Notice of Death (NSW, ACT), Record of Death (Qld), Survivorship (Vic, SA, WA, Tas) on the Title.  All obligations fall on the surviving joint tenant.  Accordingly, the personal representative of the deceased estate has no connection with the property.  Upon the death of the surviving joint tenant, or surviving member of a 'veteran/spouse couple' if title previously not in joint tenancy, subsidy is to be cancelled in accordance with Subsidy Administration GO 6.2.2.1.

Consent will normally not be given to applications by a judgement creditor to levy execution against the property or to proceed with any action or proposal which would result in the borrower losing his/her right, title or interest in his or her property or being dispossessed therefrom while he or she is complying with the requirements of the Act and any mortgage.  Where it is considered  that there are exceptional circumstances similar to those provided for in  Administrative Framework and Decision Making GO 10.3.2 which justify the exercising of the powers of s45A of the Act, details of the case may be referred to Administration Manager (DHOAS) CO for consideration in accordance with that GO.

In the case of an advance transferred to a transferee, the term will equal the unexpired part of the advance so transferred.

The interest rate applicable to the subsidised advance prior to the transfer will continue after the transfer has been effected.