The following are some special provisions ; An officer of a building society must on demand (a) give in his account for examination and allowance as the directors or committee of management may require ; (b) pay over all moneys in his possession ; (c) deliver up all the property of the society in his hands or custody to any person the society may appoint ; in case of neglect or refusal the society may sue on the bond which the law insists upon being given by him on his appointment, or apply to the County Court for a summary order. No officer of a society, such as its director, secretary, surveyor, or solicitor, may receive a gift, commission, or benefit whatsoever, for or in con nection with any loan made by the society. Both the donor and the recipient thereof will be punished ; the first by the magistrates fining him £50, or in default of payment six months' imprisonment ; the latter by the magistrates ordering him to pay to the society double the amount of the gift, or in default six months' imprisonment. If any person by false misrepresentation or imposi tion (a) obtains possession of money or effects of a society, or (b) having the same in his possession, withholds or misapplies the same, he may be fined £20 and costs, and ordered to deliver up and repay the misappropriated property and money respectively. Should he not comply with the order, he may be imprisoned for three months.
Disputes between a society and its members must be settled according to the rules, either (1) by arbitration (2), the registrar, or (3) the County Court. But an advanced member is entitled to recourse to the ordinary courts of law. Thus if a person who is simply a mortgagor to the .'ociety has a dispute with it as to the construction or the terms of the mortgage, the ordinary tribunals of the country are available to him. Upon payment of all moneys secured by a mortgage, the society may indorse upon or annex to the document either a reconveyance or a receipt. If this is done under seal according to the form prescribed by the rules, the " legal estate " is thereby vested in the person best entitled to it ; and even if the receipt is given under a mistake, the society can never afterwards claim that any balance still remains due. See AMORTISATION ; ANNUITY.
How to obtain an advance.—When Replication is made to a permanent society of good standing, the advance should be obtained without delay. We will give some practical directions and information, and will set out the most favourable terms which a borrower can obtain ; they are not ideal or theoretical terms, but such as should be insisted upon ; and the intending borrower should, by comparing the prospectuses of the different lending societies, have no difficulty in finding the societies which will readily give them to him. But whatever the terms are, it is most important that the reputation and stability of the society should be beyond dispute. The interest should not be more than 4?; per cent. on the balance of the advance as brought forward each year, and it should commence from the date of the execution of the mortgage. In addition, a premium charge of £1 per cent. per annum
may be reasonably made on the amount of the advance (luring the early years of the mortgage. When the money is borrowed for ten years or less, the premium is usually charged each year for three years ; when the loan is for over ten years, the premium may be charged for four years. This premium is included in the monthly repayments as shown below in Table II. The reason for charging the premium is that experience has proved that if a borrower makes default, and so throws the pro perty upon the hands of the society, it is generally in the early stages of the mort gage. During that period, therefore, the premium is charged. After a few years the repayments have reduced the amount owing to a sum which generally makes the security so good as to be practically free from risk. The amount of the monthly re payment is regulated by the period for which the advance is taken, and in Table I. will be found extracts from a typical scale of such repayments. The borrower may, however, pay off at his option more than the stipulated sum at any time, whereby he reduces the charge for interest, shortens the term, and consequently releases the property at an earlier period.
Having made his application for the advance, the borrower will very properly be required to pay a survey fee. A reputable society only proceeds so far as to take this foe and make the survey, when on the face of the particulars furnished with the application the property offered as security appears likely to be accepted and the advance granted. If the property is within five miles of the society's office the survey fee should not be higher than : If the amount applied for does not exceed £500, £1, ls. Od. ; exceeds £500 but not £1000, £2, 2s. Od. ; exceeds £1000 but not £2000, £3, 3s. Od. ; exceeds £2000 but not £3000, £4, 4s. Od. ; ex ceeding £3000, for each additional £1000, or fraction thereof, £1, ls. Od. Should the property be situate beyond such five miles, only an additional reasonable fee for travelling and like expenses should be paid. The survey having been made and the society having accepted the security, the borrower will be required to take up enough shares in the society to make up the amount of the advance, and to pay a nominal entrance fee of, say, ls. on every such share. Thus, if the shares are £50 each, and the advance £500, the borrower would have to take ten shares, and pay 10s. The only thing now remaining is for the solicitor to the society to investigate the title to the property, prepare the necessary documents and obtain their execution. The society will then pay the money to the borrower. Apart from the charges for registration where necessary, and any out-of-pocket expenses, such as stamp duties, the solicitor's charges should be as follows : For an advance not exceeding £500, £3, 3s. Od. ; exceeding £500 and not exceeding £1000, £4, 4s. 0(1. ; exceeding £1000 and not exceeding £1500, £5, 5s. Od. ; each additional £500, or fraction of £500, £1, ls. Od.