MORTGAGEES.

Auckland Star, Volume LXIII, Issue 290, 7 December 1932, Page 9

MORTGAGEES.

POWERS OF LEASING. DISPOSAL OF PROPERTY. LEGISLATION INTRODUCED. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. By the Property Law Amendment Bill, which was introduced in the House yesterday by Governor-General's Message, powers of leasing are to be conferred on mortgagees who are entitled to exercise their powers of sale but are unable to find a purchaser for the mortgaged property at a reasonable price. It is a one-clause measure, and with one additional provision. This, according to the official explanation, is in the i same terms as the section inserted in the Property Law Amendment Bill of 1927, and which, although approved by a committee of the Legislative Council, was not then proceeded with because of objections raised by the New Zealand Law Society. Those objections have now been withdrawn. The measure is based on provisions which have been in force in England for 50 years. Unless expressly prohibited by the terms of the mortgage, a mortgagee in possession is empowered by the bill to do the following things: Grant leasas of them ortgaged land for not more than seven years at the best rent obtainable, not to be binding on prior encumbrances unless they consent in writing; surrender any lease granted by him under the bill; to sue any tenants of land transfer land for rent or for performance of the covenants of any lease (whenever granted), and to exercise all the lessor's powers under it. The bill applies to all mortgages, including those already in existence. The measure also enables a first mortgagee to exercise the power conferred by the bill if he is entitled to possession of the land by reason of the mortgagor's default, without having actually entered into possession. This means that the power of leasing can be exercised by a first mortgagee whenever the power of sale can be exercised, and it is not expected by the authorities to cause any practical difficulty, because the mortgagee must be in a position to give the lessee possession before he can expect to arrange a lease, although he may naturally object to enter into possession in advance and then possibly find it impossible to sell or lease. The bill was read a first time.