1(1)Section 31 of the [1925 c. 20.] Law of Property Act 1925 (implied trust for sale of mortgaged property where right of redemption is barred) is amended as follows.
(2)In subsection (1), for the words “on trust for sale.” substitute “in trust—
(a)to apply the income from the property in the same manner as interest paid on the mortgage debt would have been applicable; and
(b)if the property is sold, to apply the net proceeds of sale, after payment of costs and expenses, in the same manner as repayment of the mortgage debt would have been applicable.”
(3)In subsection (2), for the words from the beginning to “this subsection” substitute—
“(2)Subsection (1) of this section”.
(4)Omit subsection (3).
(5)For subsection (4) substitute—
“(4)Where—
(a)the mortgage money is capital money for the purposes of the Settled Land Act 1925;
(b)land other than any forming the whole or part of the property mentioned in subsection (1) of this section is, or is deemed to be, subject to the settlement; and
(c)the tenant for life or statutory owner requires the trustees to execute with respect to land forming the whole or part of that property a vesting deed such as would have been required in relation to the land if it had been acquired on a purchase with capital money,
the trustees shall execute such a vesting deed.”
(6)In accordance with the amendments made by sub-paragraphs (2) to (5), in the sidenote of section 31 for the words “Trust for sale” substitute “Trust”.
(7)The amendments made by this paragraph—
(a)apply whether the right of redemption is discharged before or after the commencement of this Act, but
(b)are without prejudice to any dealings or arrangements made before the commencement of this Act.