Conveyancing Act, 1911

Powers (with a view to the grant of an authorised lease) for mortgagor and mortgagee in possession to accept surrenders of leases.

3.(1) For the purpose only of enabling a lease, authorised under section eighteen of the Act of 1881, as varied by this section, or under any agreement made pursuant to section eighteen aforesaid, or by the mortgage deed (in this section referred to as an authorised lease) to be granted, a mortgagor of land while in possession shall, in like manner as if the legal estate were vested in him and as against every incumbrancer, have, by virtue of this Act, power to accept from time to time a surrender of any lease of the mortgaged land or any part thereof comprised in the lease, with or without an exception of all or any of the mines and minerals therein, or in respect of mines and minerals, or any of them, and, on a surrender of part only of the land or mines and minerals leased, the rent may be apportioned.

(2) For the same purpose, a mortgagee of land while in possession shall, in like manner, and as against all prior or other incumbrancers, if any, and as against the mortgagor, have, by virtue of this Act, power to accept from time to time any such surrender as aforesaid.

(3) On a surrender of part only of the land or mines and minerals leased, the original lease may be varied, provided that the lease when varied would have been valid as an authorised lease if granted by the person accepting the surrender; and, on a surrender and the making of a new or other lease, whether for the same or for any extended or other term, and whether subject or not to the same or to any other covenants, provisions, or conditions, the value of the lessee's interest in the lease surrendered may, subject to the provisions of this section, be taken into account in the determination of the amount of the rent to be reserved, and of the nature of the covenants, provisions, and conditions to be inserted in the new or other lease.

(4) Nothing in this section shall, where any consideration (except an agreement to accept an authorised lease) for the surrender is given by or on behalf of the lessee to or on behalf of the person accepting the surrender, authorise a surrender to a mortgagor without the consent of the incumbrancers, or authorise a surrender to a second or subsequent incumbrancer without the consent of any prior incumbrancer.

(5) No surrender shall, by virtue of this section, be rendered valid unless:—

(a) An authorised lease is granted of the whole of the land or mines and minerals comprised in the surrender to take effect in possession immediately or within one month after the date of the surrender; and

(b) The term certain or interest granted by the new lease is not less in duration than the unexpired term or interest which would have been subsisting under the original lease if that lease had not been surrendered; and

(c) Where the whole of the land mines and minerals originally leased has been surrendered, the rent reserved by the new lease is not less than the rent which would have been payable under the original lease if it had not been surrendered; or where part only of the land or mines and minerals has been surrendered, the aggregate rents respectively remaining payable or reserved under the original lease and new lease are not less than the rent which would have been payable under the original lease if no partial surrender had been accepted.

(6) A contract to make or accept a surrender under this section may be enforced by or against every person on whom the surrender, if completed, would be binding.

(7) Subsections (13) (16) and (17) of section eighteen of the Act of 1881 shall have effect as if they were re-enacted in this section and references to the commencement of that Act shall, for the purposes of this section, be read as references to the commencement of this Act.

(8) Nothing in this section shall prevent the mortgage deed from reserving to or conferring on the mortgagor or mortgagee, or both, any further or other powers relating to the surrender of leases; and any further or other powers so conferred or reserved shall be exerciseable, as far as may be, as if they were conferred by this Act, and with the like results, unless a contrary intention is expressed in the mortgage deed.

(9) Nothing in this section shall operate to enable a mortgagor or mortgagee to accept a surrender which could not have been accepted by the mortgagor, with the concurrence of all the incumbrancers, if this Act had not been passed.

(10) For the purposes of this section, and of subsection (1) of section eighteen of the Act of 1881, the expression “mortgagor” does not include an incumbrancer deriving title under the original mortgagor.

(11) The powers of leasing and of accepting surrenders respectively conferred by section eighteen of the Act of 1881, and this section, shall, after a receiver of the income of the mortgaged property or any part thereof has been appointed by a mortgagee, under that Act, and so long as the receiver acts, be exerciseable by such mortgagee instead of by the mortgagor, as respects any land affected by the receivership, in like manner as if such mortgagee were in possession of the land.