Paragraph 3 Meaning of making advances indirectly secured on land

In this Schedule “making advances indirectly secured on land” means that the appropriate vehicle, together with one or more persons (who together with the appropriate vehicle shall be known as “the lenders”), makes an advance to another person (“the borrower”) in consideration for which the borrower mortgages legal estate in land to one or more persons (who may or may not be any one or more of the lenders) who may hold the mortgage on trust for the lenders; provided that the appropriate vehicle holds a beneficial and legal, or beneficial, interest in such land and is staisfied that at the time of making such an advance the total amount advanced or to be advanced by the lenders does not exceed the value at that time or the expected value at that time of the land which is to secure such total amount.

For the purposes of sub-paragraph (1) above, “land” means land in the United Kingdom or in any country or territory for the time being designated by Order under section 14 (power to make advances secured on land overseas) of the Act.

For the purposes of sub-paragraph (1) above, where the advance is made by instalments, in relation to land which is to secure the first instalment the appropriate vehicle must be satisfied that the amount of the first instalment does not exceed the value of such land at the time the first instalment is paid.

For the purposes of this Schedule, where the advance is made by instalments, reference to the time or occasion when the appropriate vehicle makes an advance is reference to the time or occasion when it pays the first of the instalments, disregarding for this purpose any instalment which is to be applied towards payment of the deposit in respect of the purchase of the land which is to secure the advance.