Section 572B RPA:

A section 57(2)(b) Notice is issued under the Real Property Act 1900 (NSW). This is a notice issued in relation to a debt that it owed by an individual to a lending institution. A default on any repayment may give rise to the lending institution commencing action to re-possess the property, and then selling it to recuperate its losses. The failure to repay the debt in the agreed upon instalments and in the agreed upon time, will constitute a default.  Section 57(2)(b) states that:

where:

(i) the default relates to that payment; or

(ii) in the case of a mortgage, the default does not relate to that payment and notice or lapse of time has not been dispensed with under section 58A.

A written notice that complies with subsection (3) has been served on the mortgagor, charger or covenant charger in the manner authorised by section 170 of the Conveyancing Act 1919.

Subsection 3 of this section states that:

(3) A notice referred to in subsection (2) complies with this subsection if:

(a) it specifies that it is a notice pursuant to section 57 (2) (b) of the Real Property Act 1900 ; and

(b) it requires the mortgagor, charger or covenant charger on whom it is served:

(i) to observe, except in relation to any time expressed in the covenant, agreement or condition for its observance, the covenant, agreement or condition in respect of the observance of which the mortgagor, charger or covenant charger made default; or

(ii) as the case may be, to pay the principal, interest, annuity, rent-charge or other money in respect of the payment of which the mortgagor, charger or covenant charger made default.

(c) if the costs and expenses of preparing and serving the notice are to be demanded, it requires payment of a reasonable amount for those costs and expenses and specifies the amount; and

(d) it notifies the mortgagor, charger or covenant charger that, unless the requirements of the notice are complied with within one month after service of the notice (or, where some other period exceeding one month is limited by the mortgage, charge or judgment for remedying the default referred to in the notice, within that other period after service of the notice), it is proposed to exercise a power of sale in respect of the land mortgaged or charged.

If the debt is paid off within the time required, under the law the default will not be taken to have occurred. However, there will be times where repayment may not be an option. The person served with a notice may not have the money presently available or the alleged debt or default may be legitimately in dispute. In situations such as these, legal advice should be obtained from a credit default solicitor or a lawyer specialising in section 57(2)(b) matters. Disputes of this nature can arise in the event that the statutory requirements of the notice are not complied with. It is likely that the financial institution will be well versed in the issue and service of section 57(2)(b) notices, however sometimes anomalies can be found in the form itself or the process through which it has been served. These can be relied upon to obtain time for the client to challenge the notice or arrange finances to repay the alleged debt. A skilled solicitor or lawyer practicing in the environmental law or property law litigation area will be able to peruse and assess the evidence in the default notice matter before offering strategic advice on how to approach dealing with the situation.

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