Nomination of Lender in Finance Clause of REIWA Contract
By Narinder Jessy, Legal Practitioner Director
In 2014, we reviewed a case called Dodd v Kennedy, which settled the meaning and effect of the nomination of a lender in the finance clause of the form of the REIWA contract for the sale of land. You can find a copy of that case review here.
As a result of the case, the definition of the word “Lender” in the REIWA contract was changed as follows:
(a) the lender nominated in the Schedule; or
(b) if no lender is nominated in the Schedule, any bank, building society, credit union or other institution which makes loans and in each case carries on business in Australia.”
The effect of the nomination of a lender is that an application must be made to the lender nominated. If you do not wish to nominate the lender and have the flexibility of choice of lender, then the clause should be left blank so that you can apply to “any bank, building society, credit union or other institution which makes loans and in each case carries on business in Australia.”
The revised clause does not allow for the appointment of a mortgage broker so it would not be wise to insert the name of your mortgage broker, unless it is, which is very unlikely, an institution which makes loans in Australia.