MORTGAGEES' RIGHTS

New Zealand Herald, Volume LXIX, Issue 21359, 7 December 1932, Page 13

MORTGAGEES' RIGHTS

TOWERS FOR LEASING LAND UNABLE TO BE SOLD FOLLOWING ENGLISH LAW [iSiT TELEGRAPH—SPECIAL REPORTER] WELLINGTON, Tuesday The purpose of the Property. Law Amendment Bill, introduced in the House to-day, is to confer powers of leasing 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. The bill comprises only one clause besides the short title. With one addition, the clause is in the same form as a clause that was inserted in the Property Law Amendment Bill, 1927, and approved by the Statutes Revision Committee of (he Legislative Council. The clause was not proceeded with then, as objections were raised by the Law Society, but (ho Government is now of (he opinion that the bill will not bo in any way contentious.

The bill is based on provisions which have been in force iri England for over 50 years. It empowers a mortgagee in possession, unless expressly prohibited by tho terms of tho mortgage, to do the following:— (a) r io grant leases of mortgaged lands for not more than seven years at tho best rent obtainable, not to be binding on prior encumbrances unless they consent in writing; (b) to surrender any lease granted by him under the bill; (c) to sue any tenants of Land Transfer land for rent, or for performance of covenants of any lease whenever granted, and to exercise all lessors' powers thereunder. Similar power already exists in respect of land unde* the Deeds system.

The bill applies to all mortgages, including those already in existence, as otherwise it is stated ik would be of little or no value in meeting present conditions. A sub-clause which has been added to th G 1927 draft, enables the first mortgagee to exercise the powers conferred by the bill, if he is entitled to possession of tho land by reason of the mortgagor's default, without having actually entered into possession. Tin's means that the power of leasing can be exercised by the first mortgagee whenever the power of sale can bo exercised.

iliis provision, it is explained, is not expected to cause any practical difficulty, because a mortgagee must be in a position to give a lessee possession before lie can expect to arrange a lease, although he may object to enter into possession in advance and then possibly find it impossible either to sell or to lease the property.