| |
Chapter 4
Leases and surrenders of leases
|
|
|
Leasing powers.
|
112.— (1) A mortgagor of land, while in possession, may, as against every other incumbrancer, lease the land with the consent in writing of the mortgagee, which consent shall not be unreasonably withheld.
|
|
| |
[CA 1881, s. 18][CA 1911, s. 3]
|
|
| |
(2) A lease made without such consent is voidable by a mortgagee who establishes that—
|
|
| |
(a) the lessee had actual knowledge of the mortgage at the time of the granting of the lease, and
|
|
| |
(b) the granting had prejudiced the mortgagee.
|
|
| |
(3) A mortgagee of land while in possession or, after the mortgagee has appointed a receiver and so long as the receiver acts, the receiver, may, as against all prior incumbrancers, if any, and the mortgagor, lease the land provided—
|
|
| |
(a) it is for the purpose of—
|
|
| |
(i) preserving the value of the land, or
|
|
| |
(ii) protection of the mortgagee’s security, or
|
|
| |
(iii) raising income to pay interest due under the mortgage or otherwise reduce the debt,
|
|
| |
or
|
|
| |
(b) it is otherwise an appropriate use of the land pending its sale, or
|
|
| |
(c) the mortgagor consents in writing, or
|
|
| |
(d) the court in any action relating to the mortgaged land makes an order permitting such lease.
|
|
| |
(4) In this section “ mortgagor” does not include an incumbrancer deriving title from or under the original mortgagor.
|
|
| |
(5) The power of leasing conferred by this section applies only to mortgages created after the commencement of this Part.
|
