(1) A deed must be—

• (a) in writing; and

• (b) executed in accordance with this section; and

• (c) delivered in accordance with this section.

(2) An individual executes a deed if—

• (a) he or she signs the deed; and

• (b) his or her signature is witnessed in accordance with subsection (7).

(3) A body corporate executes a deed if—

• (a) the deed is signed in the name of the body corporate by—

  • (i) the director of the body corporate if it has only 1 director; or

  • (ii) not fewer than 2 directors of the body corporate if it has 2 or more directors; or

  • (iii) 1 director or other person or member of a specified class of person if the body corporate’s constitution authorises a deed to be signed in that way; and

• (b) in the case of a deed signed under paragraph (a)(i) or (iii), the signature is witnessed in accordance with subsection (7).

(4) A body corporate executes a deed if it executes the deed as provided in any other enactment relating to the execution of a deed by the body corporate.

(5) A body corporate not incorporated by or under the law of New Zealand may execute a deed other than in accordance with subsections (3) and (4) if the mode of execution would be authorised by the law of the place in which the body corporate is incorporated were the deed executed in that place and governed by that law.

(6) The Crown executes a deed if—

• (a) it is signed on behalf of the Crown by 1 or more Ministers of the Crown or other officers or employees of the Crown of Her Majesty the Queen in right of New Zealand having express or implied authority to sign the deed on behalf of the Crown; and

• (b) in the case of a deed signed by only 1 person under paragraph (a), the signature is witnessed in accordance with subsection (7).

(7) A witness—

• (a) must not be a party to the deed; and

• (b) must sign the deed; and

• (c) if signing in New Zealand, must add—

  • (i) the name of the city, town, or locality where he or she ordinarily resides; and

  • (ii) his or her occupation or description.

(8) No particular form of words is required for the purposes of subsection (7)(c).

(9) A deed is binding when—

• (a) delivered by—

  • (i) the person to be bound by it; or

  • (ii) another person having express or implied authority to deliver it on behalf of the person intended to be bound by it; and

• (b) either—

  • (i) it is apparent from the circumstances that the person to be bound by the deed intended to be bound by it; or

  • (ii) if the binding force of the deed is subject to the fulfilment of 1 or more conditions, when each condition is fulfilled.

A deed that has been delivered comes into force,—

• (a) if the deed specifies a date for that purpose, on that date; or

• (b) if the deed does not specify a date for that purpose,—

  • (i) on delivery, if the deed is delivered unconditionally; or

  • (ii) on the occurrence of the circumstance in which the person bound by the deed contemplated that it would come into force, if the deed is delivered subject to conditions.

(1) The rule of law that a deed becomes invalid if there is a material alteration after its execution is abolished.

(2) Subsection (1) does not validate an alteration if it is invalid for another reason.

An attorney executing a deed must be appointed by deed.

(1) This section applies to any contract or other obligation entered into by a body corporate if—

• (a) the body corporate is incorporated by or under the law of New Zealand; or

• (b) the contract or other obligation is entered into in New Zealand; or

• (c) the proper law of the contract or other obligation is the law of New Zealand.

(2) A contract or other obligation may be entered into as follows:

• (a) an obligation (which, if entered into by an individual, would under New Zealand law be required to be by deed) may be entered into by deed or instrument executed in accordance with section 9(3), (4), or (5):

• (b) an obligation (which, if entered into by an individual, would under New Zealand law be required to be in writing) may be entered into on behalf of the body corporate in writing by a person acting under the body corporate’s express or implied authority:

• (c) an obligation (which, if entered into by an individual, would not under New Zealand law be required to be in writing) may be entered into on behalf of the body corporate in writing or orally by a person acting under the body corporate’s express or implied authority.

(3) This section prevails over any other enactment.

A deed expressed to be supplementary to a previous deed or directed to be read as an annex to a previous deed must be read, and has effect, as if it were endorsed on the previous deed or contained a full recital of the previous deed.

(1) A receipt for consideration in the body of a deed has the same effect as if the receipt had been endorsed on the deed.

(2) Subsection (1) applies to avoid doubt.

(3) Any rule of law inconsistent with subsection (1) is abolished.

(1) An appointment to be made by deed or writing (but not a will) is valid if it is executed in accordance with the requirements for the execution of a deed.

(2) Subsection (1) applies even though the instrument conferring the power of appointment requires some additional or other formality.

A disclaimer of land is not valid unless it is made by deed or by order of a court.

(1) A court—

• (a) may make an order for the specific performance of a voluntary promise made by deed; but

• (b) must not refuse to do so because there was no valuable consideration for the promise.

(2) Subsection (1) applies to deeds coming into operation only on or after 1 January 2008.

(1) Anything done by or to an attorney on behalf of the donor of a power of attorney has the same effect as if it had been done by or to the donor if—

• (a) it is within the attorney’s powers; and

• (b) it is done while the power of attorney is in force.

(2) Subsection (1) applies subject to subsection (3) and section 12.

(3) An instrument executed by an attorney on behalf of the donor of a power of attorney must—

• (a) be made in the name of the donor; and

• (b) state that it is being executed on the donor’s behalf by the donor’s attorney; and

• (c) otherwise be executed by the attorney in the same manner as would be required if the attorney were a party to the instrument.

(1) A power of attorney continues in force until notice of an event revoking the power is received by the attorney.

(2) Subsection (1) applies unless the power of attorney provides otherwise.

(3) A person dealing with an attorney may rely on a certificate of non-revocation of the power of attorney in the form set out in Schedule 1 as conclusive proof of the non-revocation of the power of attorney as at the date of the certificate if—

• (a) the person—

  • (i) is dealing with the attorney in good faith; and

  • (ii) does not have actual notice of an event revoking the power of attorney; and

• (b) the certificate—

  • (i) is signed by—

    • (A) the attorney; or

    • (B) if the attorney is a body corporate, a director or officer of the body corporate or a person acting on behalf of the body corporate in another capacity; and

  • (ii) is given immediately before, or at any time after, the doing of a thing by the attorney.

(4) A person who knowingly gives a false certificate under subsection (3) commits an offence and is liable on summary conviction to a fine not exceeding $5,000.

(5) If the power of attorney is an enduring power of attorney within the meaning of Part 9 of the Protection of Personal and Property Rights Act 1988,—

• (a) section 103C of that Act applies to it instead of subsections (1) to (4); but

• (b) if a certificate of non-revocation of the power of attorney was given in respect of the enduring power of attorney before the commencement of section 18 of the Protection of Personal and Property Rights Amendment Act 2007, subsections (1) to (4) of this section apply to the certificate instead of section 103C of the Protection of Personal and Property Rights Act 1988.

(1) Subsections (2) and (3) apply in favour of a purchaser.

(2) An irrevocable power of attorney given for valuable consideration is not revoked by notice of an event that would otherwise revoke the power of attorney if the notice is received when the power of attorney cannot be revoked.

(3) An irrevocable power of attorney not given for valuable consideration is not revoked by notice of an event that would otherwise revoke the power of attorney if the notice is received during—

• (a) the period of 1 year after the date of the instrument; or

• (b) any shorter period for which the instrument is expressed to be irrevocable.

(4) In this section,—

(1) A person who is 18 years old or older but under 20 years old may do 1 or more of the following:

• (a) execute a deed:

• (b) appoint an attorney to do any act or thing that the person himself or herself can do:

• (c) accept appointment, or act, as an attorney.

(2) Anything done by a person under subsection (1) has the same effect as if the person were 20 years old.

(1) In an instrument, unless the context otherwise requires,—

(2) In an instrument, unless the context otherwise requires,—

• (a) words denoting a gender include every other gender:

• (b) words in the singular include the plural, and words in the plural include the singular.

(1) A contract for the disposition of land is not enforceable by action unless—

• (a) the contract is in writing or its terms are recorded in writing; and

• (b) the contract or written record is signed by the party against whom the contract is sought to be enforced.

(2) In this section, disposition does not include—

• (a) a short-term lease; or

• (b) a sale of land by order of a court or through the Registrar.

(1) A disposition of any of the following must be in writing and signed by the person making the disposition:

• (a) an existing interest in land acquired by taking possession of the land:

• (b) an existing legal or equitable interest in land:

• (c) an existing equitable interest in a mixed fund consisting partly of land and partly of other property.

(2) A trust must be created in writing and signed by the settlor if—

• (a) it relates to land; and

• (b) it is to take effect in the lifetime of the settlor.

(3) This section does not apply to a short-term lease.

(4) This section does not affect—

• (a) the creation or operation of a resulting, implied, or constructive trust; or

• (b) the making or operation of a will; or

• (c) the disposition of any interest in land by operation of law.

Sections 24 and 25 do not affect the operation of the law relating to part performance.

(1) This section applies to contracts of guarantee coming into operation on or after 1 January 2008.

(2) A contract of guarantee must be—

• (a) in writing; and

• (b) signed by the guarantor.

(3) Subsection (2) does not require the consideration for a contract of guarantee to be in writing or to appear by necessary implication from a writing.

(4) In this section, contract of guarantee means a contract under which a person agrees to answer to another person for the debt, default, or liability of a third person.

(1) This section applies—

• (a) to any right—

  • (i) to cancel an agreement for the sale and purchase of land; and

  • (ii) that is exercisable by the vendor because of a breach of the agreement by the purchaser; and

• (b) only after the purchaser has, under the agreement, entered into possession of the land.

(2) The vendor may exercise the right to cancel the agreement—

• (a) only if subsection (3) has first been complied with; and

• (b) only in 1 of the 2 ways specified in subsection (4).

(3) This subsection has been complied with if—

• (a) the vendor serves on the purchaser a notice that complies with section 29; and

• (b) at the expiry of the period specified in that notice, the breach complained of has not been remedied.

(4) The 2 ways (referred to in subsection (2)(b) and in section 29(2)(b)) of exercising the right to cancel the agreement are—

• (a) by obtaining from a court an order for possession of the land (in which case the agreement is cancelled from the making of, or from a later time specified for the purpose in, the order); or

• (b) by re-entering the land peaceably (and without committing forcible entry under section 91 of the Crimes Act 1961).

(1) The notice required by section 28(3)(a) must adequately inform the purchaser of the following matters relating to the remedying of the breach complained of by the vendor:

• (a) the nature and extent of the breach; and

• (b) whether the vendor considers that the breach is capable of being remedied by the taking of 1 or more of the steps in paragraphs (c) to (e) and, if so, which of them the vendor considers is capable (alone or in combination) of remedying the breach; and

• (c) if the vendor considers that the breach is capable of being remedied (wholly or in part) by the payment of amounts owing under the agreement, the amounts that the vendor considers the purchaser must pay to remedy (wholly or in part) the breach; and

• (d) if the vendor considers that the breach is capable of being remedied by the purchaser doing or stopping from doing any thing, any thing which the vendor considers the purchaser must do or stop doing to remedy (wholly or in part) the breach; and

• (e) if the vendor considers that the breach is capable of being remedied (wholly or in part) by the purchaser paying reasonable compensation, the amount of compensation that the vendor considers reasonable to remedy (wholly or in part) the breach.

(2) The notice required by section 28(3)(a) must also adequately inform the purchaser of the following matters:

• (a) the period (which must be at least 12 working days after the date of service of the notice, and which must be specified in the notice whether or not the vendor considers that the breach is capable of being remedied) within which the purchaser must remedy the breach if it is capable of being remedied; and

• (b) that the vendor may seek to cancel the agreement in 1 of the 2 ways specified in section 28(4) if, at the expiry of the period referred to in paragraph (a), the breach has not been, or cannot be, remedied; and

• (c) the effect of sections 30 and 31; and

• (d) the purchaser’s right to apply to a court for relief against cancellation of the agreement under section 33, and the advisability of seeking legal advice on the exercise of that right.

The notice required by section 28(3)(a) is not invalid, and does not prevent the purchaser from offering an amount as reasonable compensation for the breach, solely because all or any of the following apply to the notice:

• (a) the notice does not, or may not, specify that the breach is capable of being remedied by the payment of reasonable compensation:

• (b) the notice specifies, or may specify, an amount of compensation that is unreasonable:

• (c) the notice specifies that the breach would be capable of being remedied by the payment of reasonable compensation, but does not also specify the amount that the vendor considers reasonable.

Section 28 does not prevent a vendor from claiming, or affect the amount which the vendor may claim by way of, damages for the breach of—

• (a) an agreement for the sale and purchase of land; or

• (b) any other duty to the vendor that the purchaser may be under independently of the agreement.

A term has no effect if it—

• (a) is expressed or implied in an instrument; and

• (b) conflicts with section 28, 29, 30, or 31.

(1) A purchaser may apply to a court for relief against cancellation of an agreement for the sale and purchase of land only if—

• (a) the purchaser has, under the agreement, entered into possession of the land; and

• (b) the vendor has served on the purchaser a notice that complies with section 29; and

• (c) the vendor has, after serving that notice, applied to a court for an order for possession of the land, or peaceably re-entered the land.

(2) The application may be made either in the proceeding on the vendor’s application for an order for possession (the possession order proceeding), or in a separate proceeding brought for the purpose by the purchaser—

• (a) before an order for possession has been made in the possession order proceeding; or

• (b) if the vendor has peaceably re-entered the land, within 3 months after the date on which the vendor re-entered the land.

(3) The court may, on the application, grant any relief against cancellation, on any conditions, it thinks fit.

(4) In particular, the court may grant relief under this section even though either or both of the following apply:

• (a) the cancellation is for breach of an essential term of the agreement:

• (b) the breach is not capable of being remedied.

No relief against the cancellation of an agreement for the sale and purchase of land can be granted otherwise than under the powers given by section 33.

(1) An application under section 33 must not, in itself, be taken as an admission by the purchaser that—

• (a) there has been a breach of the agreement by the purchaser:

• (b) because of the breach of that kind, the vendor has the right to cancel the agreement:

• (c) a notice has been duly served on the purchaser in accordance with section 28(3)(a):

• (d) at the time when the vendor applied to a court for an order for possession of the land or peaceably re-entered the land, the period specified in the notice for the remedying of the breach (if it was capable of being remedied) had expired.

(2) A court may grant relief under section 33 without determining all or any of the things in subsection (1).

A term has no effect if it—

• (a) is expressed or implied in an instrument; and

• (b) conflicts with section 33 or 34.

(1) This section applies to an agreement for the sale and purchase of land if—

• (a) it comes into operation after 31 December 2007; and

• (b) a court has not ordered, and no court would order, the specific performance of it by the purchaser; but

• (c) the purchaser is not entitled to cancel it.

(2) The purchaser may apply to a court for relief under this section in respect of the agreement.

(3) On the application, the court may make an order doing all or any of the following in respect of the agreement:

• (a) cancelling it:

• (b) requiring the vendor to refund the deposit and any other amounts (including interest) paid by the purchaser under it:

• (c) declaring that the purchaser has a lien on the land to which it relates to secure payment by the vendor of any amounts ordered under this section to be refunded to the purchaser.

(1) The granting of relief under section 37 in respect of an agreement for the sale and purchase of land does not deprive the vendor of any right to claim damages from the purchaser for the failure to perform the agreement.

(2) However, a court awarding damages against the purchaser for the failure to perform the agreement must take into account any relief granted under section 37.

A term has no effect if it—

• (a) is expressed or implied in an agreement to which section 37 or 38 applies; and

• (b) conflicts with section 37 or 38.

(1) This section applies to an agreement for the sale and purchase of a leasehold estate or interest in land if the vendor produces for the purchaser a copy of a receipt for the payment of the instalment of rent under the lease or sublease last due before the time of settlement.

(2) The purchaser must, in the absence of evidence to the contrary and unless the agreement provides otherwise, treat the copy of the receipt as establishing that the following have been done so far as they are required to be done up to the time of settlement:

• (a) the vendor has paid all rent due under the lease and has performed and observed all covenants and conditions of the lease; and

• (b) if the sale is of an interest under a sublease, all rent due under every superior lease has been paid and all covenants and conditions of every superior lease have been performed and observed.

(1) This section applies to an agreement for the sale and purchase of land comprised in a register that—

• (a) was created before the making of the agreement; and

• (b) is limited as to title under Part 12 of the Land Transfer Act 1952 (whether or not the register is also limited as to description of parcels under section 191 of that Act).

(2) The vendor must, before the time of settlement, and unless the agreement provides otherwise,—

• (a) do all acts (for example, prove all matters and comply with all requisitions by the Registrar-General) necessary to cause the register to cease to be limited as to title (whether or not the register remains limited as to description of parcels); and

• (b) meet the expenses of complying with paragraph (a), including payment of any fee prescribed under the Land Transfer Act 1952.

(1) This section applies to the sale by auction of every kind of property other than goods.

(2) If the property is put up for sale by auction in lots, each lot must be treated as the subject of a separate contract of sale, unless the contrary is proved.

(3) A sale by auction may be notified to be subject to a reserved or upset price, and a right to bid may also be reserved expressly, by or on behalf of the vendor.

(4) The vendor, or 1 person on the vendor’s behalf, may bid at the auction, but only if a right to bid by or on behalf of the vendor is expressly reserved by or on behalf of the vendor.

(5) A sale by auction is complete when the auctioneer (by the fall of the hammer, or in some other customary manner) announces its completion.

(6) A bid may be retracted by the bidder who made it at any time before the auction is complete.

(7) If a sale by auction is not notified to be subject to a right to bid by or on behalf of the vendor,—

• (a) the vendor must not bid or employ a person to bid at the sale on the vendor’s behalf; and

• (b) the auctioneer must not knowingly take a bid from the vendor or a person acting on the vendor’s behalf.

(8) The purchaser may treat as fraudulent a sale that contravenes subsection (7).

(1) This section applies to a person who acquires property, for valuable consideration and without fraud or notice of fraud, from some other person who became entitled to the property under an order of a court.

(2) The person’s title to the property is not, and does not become, invalid solely because of a defect (whether known to the person or not) in either or both of the following:

• (a) the court’s jurisdiction or power to make that order:

• (b) the procedure followed in the making of that order.

(1) This subsection applies to an electronic instrument—

• (a) prepared for registration after payment of money or the giving of other consideration for a contract; and

• (b) that contains a certification that complies with section 164A(3) of the Land Transfer Act 1952; but

• (c) only if that certification is given by a practitioner acting for the party who, under that contract, is entitled to give a receipt for the payment of that money or the giving of that other consideration.

(2) On the production, through an electronic workspace facility, of an electronic instrument to which subsection (1) applies, the person liable under the contract to pay or give the money or other consideration may, without further authority than the instrument, pay or give the money or other consideration to the practitioner who gave the certification.

(3) This subsection applies to a paper instrument—

• (a) that contains, or has written on it, a receipt for the payment of money or the giving of other consideration for a contract; but

• (b) only if that instrument or receipt is signed by a person entitled to give a receipt for the payment of that money or the giving of that other consideration.

(4) On the production by a practitioner of an instrument to which subsection (3) applies, the person liable to pay the money or give the other consideration referred to in the receipt may, without further authority than the instrument, pay or give to the practitioner that money or consideration.

(5) In this section,—

(1) This section applies to a periodical payment in respect of a fixed or ascertainable period (whether the payment is reserved or made payable under an instrument or not).

(2) The payment must be regarded as accruing from day to day, and is apportionable in respect of time accordingly, as to both—

• (a) the liability to make the payment; and

• (b) the right to receive it.

(3) Subsection (2) does not apply if a contrary intention is expressed in an instrument.

(1) An apportioned part of a periodical payment is payable and recoverable,—

• (a) for a continuing right to a payment, only when the entire payment becomes payable and recoverable:

• (b) for a payment the continuing right to which has ceased because of death, re-entry, or another cause, only when the entire payment would have become payable and recoverable if the continuing right to the payment had not ceased.

(2) A person entitled to an apportioned part of a periodical payment—

• (a) has, when the entire payment becomes payable and recoverable, the same remedies for recovering the apportioned part as would have been available in respect of the entire payment; but

• (b) must bear a proportionate part of any allowance which should properly be made in respect of the entire payment.

(3) Subsection (2) is subject to section 47(2).

(1) Rent from property, if payable in advance in respect of a period, is apportionable as between the parties to—

• (a) a transfer or assignment of the property; or

• (b) a transfer or assignment of the right to occupy or use the property.

(2) A proceeding for the recovery of rent reserved out of, or charged upon, land may be brought only by the person who, if the rent had not been apportioned, would have been entitled to the entire rent, but that person is liable for the apportioned part to the person entitled to it under the apportionment.

(3) Rent, in this section, includes—

• (a) a rentcharge; and

• (b) a payment in the nature of rent under a lease or a licence to occupy or use any property.

(4) Subsection (2) overrides section 46(2).

In this subpart, unless the context otherwise requires,—

(1) This subpart applies to an assignment of a thing in action made only on or after 1 January 2008.

(2) A thing in action that is not capable of being assigned cannot be assigned under this subpart.

(3) However, subsection (2) applies subject to section 53.

(4) This subpart does not affect the application of section 18.

(5) If only part of a thing in action is assigned, the rights and obligations under this subpart of the assignor, the assignee, and the debtor relate only to the part assigned.

(1) The absolute assignment in writing of a legal or equitable thing in action, signed by the assignor, passes to the assignee—

• (a) all the rights of the assignor in relation to the thing in action; and

• (b) all the remedies of the assignor in relation to the thing in action; and

• (c) the power to give a good discharge to the debtor.

(2) Subsection (1) applies whether or not the assignment is given for valuable consideration.

(3) Subsection (1) applies subject to—

• (a) section 51; and

• (b) any equities in relation to the thing in action that arise before the debtor has actual notice of the assignment and would, but for subsection (1), have priority over the rights of the assignee.

(4) The priority of an assignment to which subsection (1) applies and which is not given for valuable consideration is to be determined as if the assignment had been given for valuable consideration.

(5) A legal or equitable thing in action is to be treated as having been assigned in equity (whether the assignment is oral or in writing) if—

• (a) the assignee has given valuable consideration for the assignment; or

• (b) the assignment is complete.

(6) Subsection (5)—

• (a) prevails over any rule of equity to the contrary; but

• (b) applies subject to sections 24 and 25.

(7) An assignment to which subsection (5) applies is complete when the assignor has done everything that needs to be done by the assignor to transfer to the assignee (whether absolutely, conditionally, or by way of charge) the rights of the assignor in relation to the thing in action.

(8) Subsection (7) applies even though some other thing may remain to be done, without the intervention or assistance of the assignor, in order to confer title to the rights on the assignee.

(1) This section applies to a thing in action assigned in accordance with section 50(1) or in equity.

(2) Payment of all or part of the debt to the assignor by a debtor who does not have actual notice of the assignment discharges the debtor to the extent of the payment.

(3) The debt owing by a debtor who has actual notice of the assignment is payable to the assignee.

(4) However, the debt is payable to another assignee if,—

• (a) before discharge, the debtor receives actual notice of the assignment of the same thing in action to the other assignee; and

• (b) the rights of the other assignee in relation to the thing in action have priority over the rights of the first assignee.

(5) A debtor may interplead in any proceeding brought against the debtor for the payment of the debt, or apply to a court for an order determining the entitlement to any right in relation to a thing in action, if the debtor has actual notice—

• (a) that an assignment of the thing in action is disputed by the assignee or anyone claiming under the assignor; or

• (b) that there are other opposing or conflicting claims in relation to the thing in action.

(1) The registration of an assignment under an enactment does not, of itself, give actual notice of the assignment to the debtor.

(2) Subsection (1) overrides anything to the contrary in the enactment under which the assignment is registered.

(3) Joint debtors have actual notice of the assignment of a thing in action or of any matter referred to in section 51 if any of them has actual notice of the assignment or matter.

(4) The assignor must be joined in any proceeding brought by the assignee against the debtor if—

• (a) only part of a thing in action has been assigned in accordance with section 50(1); or

• (b) there has been an assignment only in equity of all or part of a thing in action.

(5) For the purposes of subsection (4), an assignor may be joined in proceedings—

• (a) when the proceedings are brought or subsequently; and

• (b) if subsequently, whether before or after the expiry of the limitation period within which the proceedings must be brought in order to avoid a limitation defence applying to a claim made in the proceedings.

An assignment of an amount that will or may be payable in the future under a right already possessed by the assignor (whether the right arises before, on, or after 1 January 2008) is to be treated as an assignment of a thing in action.

(1) This section applies to an instrument (whether coming into operation before, on, or after 1 January 2008) if—

• (a) it creates a lease of land, a mortgage over land, an easement, a profit à prendre, or a contract for the grant of an easement or a profit à prendre; and

• (b) it contains a no registration clause; and

• (c) in the absence of a no registration clause, it would create an equitable interest in land capable of being enforced under the doctrine in Walsh v Lonsdale (1882) 21 Ch D 9.

(2) The following provisions apply to an instrument:

• (a) it is to be treated for all purposes as creating an equitable interest in land; but

• (b) a court may not order the registration of the lease, mortgage, easement, or profit à prendre to which the instrument relates.

(3) Subsection (2) applies to avoid doubt.

(4) In this section, no registration clause means—

• (a) a provision that a lessee, mortgagee, or grantee of an easement or profit à prendre is not entitled to a registered lease, mortgage, easement, or profit à prendre (as the case may be); or

• (b) a provision to like effect.

(1) Two or more persons beneficially entitled to property as tenants in common may, by deed, declare that they are joint tenants of the property.

(2) A declaration made under subsection (1) takes effect on and from the date of the declaration.

(1) A person may dispose of an estate or interest in property to himself, herself, or itself, alone or jointly with some other person.

(2) A disposition to which subsection (1) applies is enforceable in the same manner as a disposition to another person.

(1) A Crown grant of land, or a certificate of title or computer register having the force and effect of a Crown grant of land, whether issued before, on, or after 1 January 2008, for an estate in fee simple confers on the person named in the Crown grant or the certificate of title or computer register a right of freehold tenure (free and common socage) without any incident of tenure for the benefit of the Crown.

(2) An estate in fee simple is transferable, and has always been transferable, without the permission of the Crown or the need to make any payment to the Crown.

(3) An instrument purporting to create, transfer, or assign an estate in fee simple in any land subject to the reservation to the person executing the instrument of an estate in fee simple (subinfeudation) continues to create, transfer, or assign an estate in fee simple without any such reservation.

(1) The following may not be created or done:

• (a) estates tail and estates by wrong:

• (b) the making of a forfeiture by any conveyance:

• (c) the passing of the legal estate in any land by the following means:

  • (i) a covenant to stand seized:

  • (ii) livery of seisin:

  • (iii) a contract for the sale and purchase of land.

(2) In an instrument coming into operation on or after 1 January 1953, words which, before that date, would have created an estate tail are to be treated as creating an estate in fee simple.

(3) Words in an instrument which, but for the abolition of the rule of law known as the rule in Shelley’s case (by section 5(1)(a) of the Property Law Amendment Act 1951 and section 22 of the Property Law Act 1952), would have operated to give a person an interest in fee simple are to be treated as words of purchase and not of limitation.

(1) Estates and interests in property may be created that take effect at a future time.

(2) Subsection (1) applies subject to the rule against perpetuities and the Perpetuities Act 1964.

(1) The legal doctrine of interesse termini is abolished.

(2) A lessee acquires an estate in the land at the time fixed for the commencement of the lease, whether or not the lessee enters into possession of the land at that time.

(3) Subsection (2) applies subject to section 41 of the Land Transfer Act 1952.

(4) Subsection (3) does not limit section 8.

An estate for life may be created in relation to a leasehold estate in land.

(1) Every estate, interest, or right in property that can be created or disposed of may be created or disposed of by an individual—

• (a) during the individual’s lifetime; or

• (b) by will.

(2) However, subsection (1) does not make a joint tenancy severable by will.

(1) A contingent remainder or contingent interest in land may follow a leasehold estate in the land.

(2) A contingent remainder or contingent interest in land, expressed to take effect on the ending of a preceding estate in the land, does not become void because the preceding estate ends before the occurrence of the event or the fulfilment of the condition on which the contingent remainder or contingent interest depends.

(3) Different estates in land vested in the same person do not merge if the estates are separated by the contingent remainder or contingent interest in the land of some other person.

(4) In this section, contingent remainder or contingent interest means a remainder or interest that depends on—

• (a) a future event that may or may not occur; or

• (b) a condition that may or may not be fulfilled.

(1) This section applies if—

• (a) a person (person A) is entitled to an estate or interest in land; and

• (b) the estate or interest is subject to a gift over to another person (person B) if person A has no issue or no issue of a specified class (whether at any specified time or within any specified period).

(2) The gift over ceases to be capable of taking effect as soon as there is issue, or a member of the specified class of issue, who attains the age of 20 years.

(3) Subsection (2) applies even if the issue may subsequently fail.

(4) In this section, gift over includes a gift over expressed to take effect on the ending of an estate or interest preceding that of the person whose estate or interest is the subject of the gift over.

(1) This section applies—

• (a) to an instrument coming into operation on or after 1 January 1953; but

• (b) subject to the terms of the instrument.

(2) Subsection (3) applies to an instrument conferring an estate or interest in property on—

• (a) the heir or heirs of a person; or

• (b) the next of kin of a person; or

• (c) the next of kin of a person to be determined in accordance with the Administration Act 1969; or

• (d) the family of a person; or

• (e) the relatives of a person.

(3) The instrument is to be treated as conferring the estate or interest on the persons who, on the intestacy of the person referred to in subsection (2), would take beneficially under the Administration Act 1969, and in the same shares.

(4) Subsection (5) applies to an instrument conferring an estate or interest in property on the heir or heirs of the body of a person.

(5) The instrument is to be treated as conferring the estate or interest on the person who would take beneficially on the intestacy of the person referred to in subsection (4) in accordance with a direction under the Administration Act 1969 to hold the person’s property for the issue of the intestate on the statutory trusts.

(6) Subsection (7) applies to an instrument conferring an estate or interest in property on—

• (a) the male heir or heirs of a person or of the body of a person; or

• (b) the female heir or heirs of a person or of the body of a person.

(7) The instrument is to be treated as conferring the estate or interest on the male or female issue of the person (as the case may be) who would take beneficially on the intestacy of the person in accordance with a direction under the Administration Act 1969 to hold the person’s property for the issue of the intestate on the statutory trusts.

(1) This section applies to an interest in property—

• (a) created by an instrument coming into operation on or after 1 January 1953; and

• (b) taking effect at a future time.

(2) The interest in the property carries the income from the property that accumulates during the period—

• (a) beginning on the later of the following dates:

  • (i) the date on which the instrument comes into operation; or

  • (ii) the date on which the operation of any preceding interest ends; and

• (b) ending on the close of the day before the date on which the future interest takes effect.

(3) This section applies subject to the instrument making some other provision for the disposition of income during that period.

A vendor of land has no legal or equitable lien over the land because of unpaid purchase money.

(1) A life tenant or a lessee of land is liable in damages for the tort of voluntary waste and the tort of equitable waste to the person entitled to the reversion or remainder expectant on the estate for life or the lease.

(2) Subsection (1) applies unless the liability is excluded by an express or implied term of the grant of the estate for life or the lease.

(3) However, liability for equitable waste—

• (a) is not excluded by the exclusion of waste or voluntary waste; but

• (b) is excluded only if expressly excluded.

A co-owner of land is liable in damages to the other co-owners of the land for any loss arising from an act or omission that would be the tort of voluntary waste or of equitable waste if done or omitted by a life tenant or lessee.

The tort of permissive waste is abolished.

(1) This section applies if an encumbrance over land securing a rentcharge is released in relation to part of the land.

(2) The rentcharge remains secured by the encumbrance over the residue of the land.

(3) If the owner of the residue is not the owner of the part released and has not consented to the release, the owner of the residue is entitled (in relation to the rentcharge) to the same contribution from the owner of the part released as would have been payable by that owner if there had been no release.

(1) If a body corporate has power to acquire and hold property, the body corporate may acquire and hold property as a joint tenant with 1 or more individuals or other bodies corporate.

(2) If a body corporate is a joint tenant of property, its interest as joint tenant devolves on the surviving joint tenant in the following cases:

• (a) in the case of a company, if it is removed from the New Zealand register:

• (b) in the case of an overseas company registered under Part 18 of the Companies Act 1993, if it is removed from the overseas register:

• (c) in any other case, if it ceases to exist.

(3) This section—

• (a) overrides section 324 of the Companies Act 1993; but

• (b) does not apply to a company removed from the New Zealand register under section 355 of the Companies Act 1993.

(1) This section—

• (a) applies to a power to deal with or dispose of property whether or not the person who can exercise the power has an interest in the property to which the power relates; but

• (b) does not apply to the power if it is a power in the nature of a trust.

(2) The person who can exercise a power may—

• (a) release the power by deed or contract; or

• (b) disclaim the power by deed.

(3) The release of a power extinguishes the power.

(4) If a power is disclaimed—

• (a) the person who disclaimed the power may not exercise or join in the exercise of the power; but

• (b) any other person who can exercise the power, and who has not disclaimed it, may continue to exercise the power.

(5) Subsection (4)(b) applies subject to the terms of the instrument creating the power.

(1) If an instrument creates a power to appoint property among several objects, the power may be exercised—

• (a) to exclude some or all of those objects:

• (b) to appoint shares of different sizes to 1 or more of them.

(2) Subsection (1) applies subject to the terms of the instrument creating the power.

(1) This Part (except as provided in section 76) applies in accordance with section 8 to every mortgage that comes into operation before, on, or after 1 January 2008.

(2) Subsection (1) applies subject to any other provision of this Act or of another enactment providing otherwise.

(1) Sections 79 and 95(1) and (2) apply to every mortgage over land that comes into operation on or after 1 January 2008.

(2) Section 92 applies to every mortgage over property that comes into operation on or after 1 January 2008 (subject to section 89(4)).

(3) Section 94 applies to every mortgage over property that comes into operation before 1 January 2008 (subject to section 89(4)).

(4) Section 95(3) to (5) apply to every registered mortgage over land under the Land Transfer Act 1952 that comes into operation before 1 January 2008.

(5) Section 96 applies to every mortgage over goods that comes into operation on or after 1 January 2008 (subject to sections 77 and 96(3)).

Nothing in subparts 3 to 8 applies to security interests in consumer goods to which the Credit (Repossession) Act 1997 applies.

(1) If a provision of this Part applies to a mortgage that creates or provides for a security interest to which the Personal Property Securities Act 1999 applies, the provision is supplementary to the Personal Property Securities Act 1999.

(2) However, if the provision is inconsistent with a provision in the Personal Property Securities Act 1999, the provision in the Personal Property Securities Act 1999 prevails.

(3) This section does not limit section 8.

(1) A mortgage over land, whatever its form,—

• (a) takes effect as a charge; and

• (b) does not operate as a transfer of the estate or interest charged.

(2) Subsection (1) does not apply if the mortgage is created by a registered transfer instrument.

A mortgage over land is not created by the deposit of the instruments of title relating to the land, whether or not the deposit is accompanied by a memorandum of the intent with which the deposit is made.

(1) A mortgagor of land may bring a proceeding against the mortgagee without first offering to redeem the mortgaged land.

(2) Subsection (1) applies despite anything to the contrary expressed or implied in the mortgage.

(1) This section applies if—

• (a) an instrument provides that all or part of the amounts secured by a mortgage over property or owing under an unsecured obligation have been advanced by, or are owing to, 2 or more persons as amounts belonging to them on joint account; or

• (b) a mortgage or unsecured obligation is given to, or acquired by, 2 or more persons jointly and not in shares.

(2) The amounts or other benefits for the time being due to the persons under the mortgage or obligation belong to them, and continue to belong to them, on joint account.

(3) The written receipt for all amounts or other benefits for the time being due under the mortgage or obligation is a complete discharge if it is given by—

• (a) the survivors or the last survivor of the persons referred to in subsection (1)(a) or (b); or

• (b) the administrator of the last survivor of those persons; or

• (c) the assignee of the survivors or of the last survivor of those persons.

(4) Subsection (3) applies even if the payer has notice of the severance of the joint account.

(5) The persons referred to in subsection (3) may exercise the powers conferred by the mortgage or obligation to the same extent and with the same effect as if the mortgagees or obligees had exercised the powers.

(6) This section has effect subject to any contrary intention expressed or implied in an instrument.

(1) A mortgage over property may be wholly or partially discharged by an instrument that—

• (a) is endorsed on, or attached to, the mortgage instrument, or the existence of which is recorded on or with the mortgage instrument; and

• (b) is executed by the mortgagee in the same manner as a deed is required to be executed; and

• (c) states that the mortgagee discharges the property from the mortgage wholly or in part, or words to that effect.

(2) A mortgage over land under the Land Transfer Act 1952 may also be wholly or partially discharged by a mortgage discharge instrument that is registered under that Act.

(3) A mortgage discharge instrument that is duly executed under subsection (1) or registered under subsection (2)—

• (a) operates as if it were a deed; and

• (b) transfers or releases to the current mortgagor the interest of the mortgagee in the mortgaged property to the extent specified in the instrument.

(1) The interest of a mortgagee under a mortgage over property may be assigned by an instrument that—

• (a) is endorsed on, or attached to, the mortgage instrument, or the existence of which is recorded on or with the mortgage instrument; and

• (b) is executed by the mortgagee in the same manner as a deed is required to be executed; and

• (c) states that the mortgagee assigns to the assignee all the amounts and all the benefits of any other obligations secured by the mortgage, and all rights, powers, and remedies of the mortgagee under the mortgage, and the whole of the mortgagee’s interest in the mortgaged property, or words to that effect.

(2) The interest of a mortgagee under a mortgage over land under the Land Transfer Act 1952 may also be assigned by a transfer instrument that is registered under that Act.

(3) An instrument that is duly executed under subsection (1) or registered under subsection (2) operates as if it were a deed and transfers to the assignee—

• (a) the debt; and

• (b) the benefits of any other obligations secured by the mortgage; and

• (c) the interest of the mortgagee in the mortgaged property; and

• (d) all rights, powers, and remedies of the mortgagee under the mortgage.

(1) The principal amount secured by a mortgage over property may be reduced or increased by an instrument that—

• (a) complies with subsection (5); and

• (b) is executed,—

  • (i) in the case of a reduction, by the mortgagee; or

  • (ii) in the case of an increase, by the current mortgagor; and

• (c) states that the principal amount intended to be secured by the mortgage is reduced or increased, as the case may be, to the amount or in the manner specified in the instrument, or words to that effect.

(2) The rate of interest payable under a mortgage over property may be reduced or increased by an instrument that—

• (a) complies with subsection (5); and

• (b) is executed,—

  • (i) in the case of a reduction, by the mortgagee; or

  • (ii) in the case of an increase, by the current mortgagor; and

• (c) states that the rate of interest payable under the mortgage is reduced or increased, as the case may be, to the rate or sum or in the manner specified in the instrument, or words to that effect.

(3) The term or currency of a mortgage over property may be shortened, extended, or renewed by an instrument that—

• (a) complies with subsection (5); and

• (b) is executed by the current mortgagor and by the mortgagee; and

• (c) states that the term or currency of the mortgage is shortened, extended, or renewed, as the case may be, to the date or in the manner specified in the instrument, or words to that effect.

(4) The covenants, conditions, and powers expressed or implied in a mortgage over property may be varied, negatived, or added to by an instrument that—

• (a) complies with subsection (5); and

• (b) is executed by the current mortgagor and by the mortgagee; and

• (c) states that the covenants, conditions, and powers expressed or implied in the mortgage are varied in the manner specified in the instrument, or words to that effect.

(5) For the purposes of subsections (1) to (4), a mortgage variation instrument must—

• (a) be endorsed on, or attached to, the mortgage instrument, or have its existence recorded on or with the mortgage instrument; and

• (b) be executed in the same manner as a deed is required to be executed.

(6) A mortgage over land under the Land Transfer Act 1952 may also be varied by a mortgage variation instrument that is registered under that Act.

A mortgage variation instrument that is duly executed under section 85(1) to (5) or registered under section 85(6)—

• (a) operates as if it were a deed; and

• (b) varies the mortgage in accordance with the terms of the instrument.

(1) A mortgage over property secures all amounts reasonably paid or advanced at any time by the mortgagee—

• (a) for the protection, insurance, maintenance, preservation, or repair of the mortgaged property; or

• (b) to remedy any default by the mortgagor in respect of any other mortgage or encumbrance over the property, to the extent that it has priority over the mortgagee’s mortgage; or

• (c) for the payment of rates or other outgoings; or

• (d) to meet the expenses of the mortgagee in entering into possession, or in doing anything that a mortgagee in possession is required or entitled to do; or

• (e) with a view to the realisation of the security (including any additional amount referred to in section 120(2) or 129(2)).

(2) A mortgage over property secures all interest on any amounts paid or advanced for all or any of the purposes referred to in subsection (1) at the agreed rate (if any) at which interest is payable on the principal amount secured by the mortgage.

The priority of a mortgage over property, in relation to any subsequent mortgage over the property, extends to all amounts paid or advanced for all or any of the purposes referred to in section 87(1) and to the interest referred to in section 87(2).

(1) The priority of a mortgage over property (the prior mortgage), in relation to any subsequent mortgage over the property, does not extend to advances made under the prior mortgage after the subsequent mortgage comes into operation, except—

• (a) as provided in sections 88 and 90 to 94; or

• (b) in accordance with an instrument that is executed by the mortgagee under the prior mortgage and the mortgagee under the subsequent mortgage.

(2) The priority of the security for amounts advanced under a variation of a mortgage that comes into operation on or after 1 January 2008 must, for the purposes of section 88, this section, and sections 90 to 94, be determined as if the variation were a separate mortgage.

(3) Any rule of law permitting the tacking of further advances so as to obtain priority except in accordance with sections 90 to 94 is abolished.

(4) Nothing in this section or in sections 90 to 94 applies to a security interest to which the Personal Property Securities Act 1999 applies.

(1) This section applies if—

• (a) a mortgage over property (the prior mortgage) secures a specified principal amount (whether or not the mortgage also secures further advances, or further advances up to a stated priority limit); and

• (b) all or any part of the specified principal amount is advanced after a subsequent mortgage over that property comes into operation.

(2) The priority of the prior mortgage, in relation to the subsequent mortgage, extends to the whole of the specified principal amount.

(3) In this section, specified principal amount does not include any part of the amount that has been repaid to the mortgagee and re-advanced.

If a mortgage over property secures a further advance by way of financial accommodation, the priority of the mortgage, in relation to any subsequent mortgage over the property, extends to the further advance if, when the further advance is made,—

• (a) the mortgagee does not have actual notice of the existence of the subsequent mortgage; or

• (b) the mortgagee has actual notice of the existence of the subsequent mortgage, but—

  • (i) is under an obligation to make the further advance; and

  • (ii) does not, at the time of entering into the obligation, have actual notice of the existence of the subsequent mortgage.

(1) If a mortgage over property secures further advances by way of financial accommodation up to a stated priority limit, the priority of the mortgage, in relation to any subsequent mortgage over the property, extends to every such further advance, up to the stated priority limit.

(2) Subsection (1) applies whether or not the mortgagee had actual notice of the existence of the subsequent mortgage when the further advance was made.

(3) A stated priority limit may be expressed—

• (a) in the currency of any country; and

• (b) as an amount plus interest, or as an amount without more (in which case the amount expressed includes interest).

(4) Unless a stated priority limit expressly includes amounts paid or advanced by the mortgagee for any of the purposes referred to in section 87,—

• (a) amounts paid or advanced for any of those purposes and the interest referred to in section 87(2) must not be taken into account in determining whether or not further advances exceed the stated priority limit; and

• (b) the priority of the mortgage, in relation to any subsequent mortgage, extends to all amounts paid or advanced for any of those purposes and to the interest referred to in section 87(2), even if the effect of the payment or advance or interest is to take the total of the amounts secured by the mortgage over the stated priority limit.

In sections 91 and 92—

(1) Section 92 does not affect the priority of a mortgage over property that comes into operation before 1 January 2008, so far as it extends to further advances expressly secured by—

• (a) the mortgage; or

• (b) any variation of the mortgage that comes into operation before that date.

(2) Subsection (1) applies whether the further advances are made before, on, or after 1 January 2008.

(3) The priority of the security for further advances made on or after 1 January 2008 under a mortgage or variation of mortgage referred to in subsection (1) must be determined as if section 80A of the Property Law Act 1952 had not been repealed by this Act.

(1) Every mortgage over land contains the implied covenants, conditions, and powers set out in Part 1 of Schedule 2 to the extent that they are relevant in the circumstances.

(2) Subsection (1) applies unless a contrary intention is expressed (whether in the mortgage or otherwise) in accordance with section 279(2).

(3) Every registered mortgage over land under the Land Transfer Act 1952 that comes into operation before 1 January 2008 contains an implied power of the mortgagee, upon the mortgagor’s default, to enter into possession of the mortgaged land.

(4) The power under subsection (3) may be exercised only—

• (a) after the expiry of the period specified in the notice required by section 119 or with the leave of a court granted under section 126; and

• (b) in accordance with subpart 6.

(5) Subsection (4) is subject to sections 127 and 175.

(1) Every mortgage over goods contains the implied covenants, conditions, and powers set out in Part 2 of Schedule 2.

(2) Subsection (1) applies unless a contrary intention is expressed (whether in the mortgage or otherwise) in accordance with section 279(2).

(3) However, subsection (1) does not apply to the extent that the mortgage is over inventory.

(1) The current mortgagor or any other person entitled to redeem mortgaged property may redeem it in accordance with this subpart at any time before it has been sold, under a power of sale, by the mortgagee or a receiver.

(2) The mortgagee must, on payment to the mortgagee of all amounts and the performance of all other obligations secured by the mortgage, at the expense of the current mortgagor or other person seeking to redeem the mortgaged property, discharge the property from the mortgage in accordance with section 83.

(3) Subsection (2) does not apply if a request is made to the mortgagee under section 102 for the mortgage to be transferred.

(1) This section applies if—

• (a) the term of a mortgage has not expired; and

• (b) the mortgagee—

  • (i) is not in possession of the mortgaged property; and

  • (ii) has not appointed a receiver; and

  • (iii) has not taken any other steps to realise the security (except giving notice under section 119 or 128).

(2) For the purposes of section 97, the amounts secured by the mortgage include interest on the principal amount secured by the mortgage for the unexpired portion of the term.

(1) The current mortgagor or other person seeking to redeem the mortgaged property after the expiry of the term of the mortgage, or of any further term for which the mortgage has been renewed or extended, must—

• (a) either—

  • (i) give the mortgagee not less than 60 working days’ written notice of the intention to redeem; or

  • (ii) pay to the mortgagee 3 months’ interest at the agreed rate (if any) at which interest is payable on the principal amount secured by the mortgage; and

• (b) pay to the mortgagee all other amounts secured by the mortgage.

(2) Subsection (1) does not apply if the mortgagee—

• (a) is in possession of the mortgaged property; or

• (b) has appointed a receiver; or

• (c) has taken any other steps to realise the security (except giving notice under section 119 or 128).

Sections 98 and 99 are subject to—

• (a) Parts 2 and 5 of the Credit Contracts and Consumer Finance Act 2003; and

• (b) Part 1 of the Credit Contracts Act 1981 (as applied by section 143 of the Credit Contracts and Consumer Finance Act 2003).

Any term that is expressed or implied in an instrument and that is inconsistent with sections 97 to 99 has no effect to the extent that it is less favourable to the current mortgagor or other person entitled to redeem the mortgaged property.

(1) The current mortgagor or any other person who is entitled to redeem the mortgaged property may, at any time (except a time when the mortgagee is in possession of the property), request the mortgagee to transfer the mortgage to a nominated person (except the current mortgagor).

(2) A mortgagee under a subsequent mortgage or the holder of any other subsequent encumbrance may make a request under subsection (1) despite any intermediate interest.

(3) A request made under subsection (1) by a person other than the current mortgagor prevails over a request made by the current mortgagor.

(4) If 2 or more requests are made under subsection (1) by persons other than the current mortgagor, the request of the person whose interest has priority prevails.

The mortgagee must, after receiving a request made under section 102, transfer the mortgage to the nominated person on—

• (a) payment to the mortgagee of all amounts that would have been payable if the discharge of the mortgage had been sought under sections 97 to 101; and

• (b) the performance of all other obligations secured by the mortgage.

The current mortgagor or other person entitled to redeem the mortgaged property may, on request, at a reasonable time, and on payment of any reasonable costs, inspect and make copies of, or extracts from, the instruments of title for the property that are in the custody or under the control of the mortgagee.

The current mortgagor or other person entitled to redeem the mortgaged property may redeem it without paying any amounts owing under any separate mortgage over other property in favour of the same mortgagee that was entered into by the current mortgagor or by any former mortgagor.

A term has no effect if it—

• (a) is expressed or implied in an instrument; and

• (b) conflicts with section 102, 103, 104, or 105.

(1) A person specified in subsection (2) may apply to a court for an order directing the sale of mortgaged property in any proceeding—

• (a) concerning the mortgage or the mortgaged property; or

• (b) brought for the purpose of obtaining the order.

(2) The persons are—

• (a) the current mortgagor:

• (b) a former mortgagor:

• (c) a covenantor:

• (d) another person entitled to redeem the mortgaged property.

(3) An application under this section must, unless the court orders otherwise, be served—

• (a) on the mortgagee; and

• (b) on any receiver appointed for the property; and

• (c) on the mortgagee under any other mortgage, and the holder of any other encumbrance, over the mortgaged property (whether or not it has priority over the mortgage in question) if that mortgage or other encumbrance—

  • (i) is registered; or

  • (ii) is unregistered, but the person applying to the court under this section has actual notice of it; and

• (d) in the case of mortgaged land, on any person who has lodged a caveat under section 137 of the Land Transfer Act 1952, or a notice under section 42 of the Property (Relationships) Act 1976 having the effect of a caveat, against the title to the land or any part of it; and

• (e) on every person, except the applicant, who would have been entitled to apply to the court under subsection (1).

(1) A court may, on an application under section 107, make an order directing the sale of the mortgaged property.

(2) An order may be made under this section—

• (a) without allowing time for the redemption of the property in accordance with sections 97 to 101; and

• (b) without first determining the priority of any mortgages or other encumbrances over the property; and

• (c) even if a person who has an interest in the property or in the mortgage—

  • (i) is not before the court; or

  • (ii) opposes the making of the order.

(3) The court may make an order under this section on any conditions the court thinks fit, including the deposit in court of a reasonable sum fixed by the court to meet the expenses of the sale or to secure the performance of any other condition of the order.

(4) The court may order that the sale be conducted by any party to the proceeding or by the Registrar.

(1) A mortgage over property may be discharged by a court under sections 110 and 111 or by Public Trust under section 112 if—

• (a) a person who is entitled to receive, or has received, payment of the amounts secured by the mortgage is out of the jurisdiction, cannot be found, or is dead; or

• (b) it is uncertain who is entitled to receive payment of the amounts secured by the mortgage.

(2) If a mortgage is discharged under sections 110 to 112, an amount eventually shown to be payable to the person entitled to receive payment of the amounts secured by the mortgage, over and above the amount received by that person, continues to be a debt owing by the current mortgagor, any former mortgagor, and any covenantor as if it were owing under a deed.

(3) This section does not relieve any person of the obligation to comply with section 115 (if that section applies).

A court may, in a circumstance referred to in section 109(1), make—

• (a) all or any of the following orders on the application of the current mortgagor or any other person entitled to redeem the mortgaged property:

  • (i) an order to determine, in the manner that the court thinks fit, the amounts secured by the mortgage that would have been payable if the discharge of the mortgage had been sought under sections 97 to 101:

  • (ii) an order that the total amount determined under subparagraph (i) be paid into court:

  • (iii) an order declaring that all amounts secured by the mortgage have been paid in full:

• (b) an order that the amount paid into court be paid to a person who is entitled to receive payment of the amounts secured by the mortgage if—

  • (i) the person applies for an order under this paragraph; and

  • (ii) the court is satisfied that the instruments of title relating to the mortgaged property have been delivered to the current mortgagor or other person entitled to redeem the mortgaged property or have otherwise been satisfactorily accounted for.

(1) A certificate by the Registrar that the amount ordered to be paid into court under section 110 was so paid, or a sealed copy of an order of a court declaring that all amounts secured by the mortgage have been paid in full, has effect as if it were a duly executed mortgage discharge instrument under section 83.

(2) If the mortgage referred to in subsection (1) is over land and is registered under the Land Transfer Act 1952,—

• (a) the Registrar-General must, on the registration of the certificate or order referred to in subsection (1), make an entry in the register relating to the certificate or order; and

• (b) when an entry is made in the register under paragraph (a), the mortgage is discharged.

(3) If the mortgage referred to in subsection (1) is over a ship and is registered under the Ship Registration Act 1992,—

• (a) a Registrar of Ships must, on production of the certificate or order referred to in subsection (1), make an entry in the New Zealand Register of Ships to the effect that the mortgage has been discharged; and

• (b) an entry made under paragraph (a) has the same effect as an entry made under section 45 of the Ship Registration Act 1992.

(4) If the mortgage referred to in subsection (1) is over quota within the meaning of the Fisheries Act 1996 and is registered under that Act,—

• (a) the chief executive within the meaning of that Act must, on production of the certificate or order referred to in subsection (1), make an entry in the appropriate register to the effect that the mortgage has been discharged; and

• (b) an entry made under paragraph (a) has the same effect as an entry made under section 146 of that Act.

(5) If the mortgage referred to in subsection (1) is over management rights or a spectrum licence within the meaning of the Radiocommunications Act 1989 and is registered under that Act,—

• (a) the Registrar of Radio Frequencies must, on production of the certificate or order referred to in subsection (1), make an entry in the Register of Radio Frequencies to the effect that the mortgage has been discharged; and

• (b) an entry made under paragraph (a) has the same effect as an entry made under section 86 of that Act.

(6) If the mortgage referred to in subsection (1) is over a policy within the meaning of section 41 of the Life Insurance Act 1908 and is registered under that Act,—

• (a) the secretary within the meaning of that Act must, on production of the certificate or order referred to in subsection (1), act under section 51 of that Act; and

• (b) when the secretary acts under paragraph (a), the mortgage is discharged under sections 50 and 51 of that Act.

(7) If the mortgage referred to in subsection (1) is over personal property and is registered under the Personal Property Securities Act 1999, the certificate or order referred to in subsection (1), on production to the Registrar of Personal Property Securities, has effect as if it—

• (a) were a financing change statement discharging the registration of the financing statement; and

• (b) had been registered under section 160 of the Personal Property Securities Act 1999.

(1) Public Trust must, in a circumstance referred to in section 109(1) and on the application of the current mortgagor or any other person entitled to redeem the mortgaged property, act in accordance with subsection (2) if Public Trust is satisfied that—

• (a) the applicant has paid to Public Trust all amounts secured by the mortgage that would have been payable if the discharge of the mortgage had been sought under sections 97 to 101; or

• (b) all amounts secured by the mortgage have been paid in full.

(2) For the purposes of subsection (1), Public Trust must—

• (a) execute a mortgage discharge instrument for the mortgage in accordance with section 83(1); or

• (b) in the case of mortgaged land, register a mortgage discharge instrument for the mortgage.

(3) A mortgage discharge instrument duly executed or registered by Public Trust under this section—

• (a) has effect as if it were a discharge duly executed or registered by the mortgagee; and

• (b) is conclusive proof that all conditions entitling Public Trust to act under this section have been satisfied.

A person in possession of the instruments of title for mortgaged property must deliver them to the current mortgagor or any other person entitled to redeem the mortgaged property on—

• (a) the production by the mortgagor or person of—

  • (i) Public Trust’s receipt for all amounts secured by the mortgage that would have been payable if the discharge of the mortgage had been sought under sections 97 to 101; or

  • (ii) Public Trust’s certificate that all amounts secured by the mortgage have been paid in full; and

• (b) payment of all proper charges (if any).

(1) If Public Trust, in discharging a mortgage under section 112, acts reasonably and in good faith, Public Trust is not liable to any person for any loss so caused.

(2) The onus of proving that Public Trust has not acted reasonably and in good faith is on the person alleging it.

(1) This section applies if a mortgage over property secures the payment to any person of a periodical payment, other than interest on the amounts secured by the mortgage.

(2) A court may, on the application of the current mortgagor or any other person entitled to redeem the mortgaged property, make an order directing or allowing the payment into court of a specified amount that, in the opinion of the court, is sufficient to constitute a fund that will produce enough income to meet any periodical payment secured by the mortgage as it falls due.

(3) In determining the specified amount under subsection (2), the court must—

• (a) assume that the fund will be invested as a trustee is entitled and required to invest trust funds under Part 2 of the Trustee Act 1956; and

• (b) make reasonable provision, in addition to the amount sufficient for the purpose specified in subsection (2), for the contingency of further costs, expenses, and interest, and any other contingency except the depreciation of any investment.

(4) The court may, after giving notice to every person who is entitled to receive a periodical payment secured by the mortgage, make further orders directing the application or distribution of the income or the capital of the fund.

(1) A certificate by the Registrar that the amount specified in an order under section 115 has been paid into court has effect as if it were a duly executed mortgage discharge instrument for the mortgage under section 83.

(2) Section 111(2) to (7) apply to a certificate under subsection (1) as if it had been given under section 111.

Any rule of law entitling a mortgagee to foreclose the equity of redemption in mortgaged property is abolished.

(1) This section applies if—

• (a) the term of a mortgage over property, or any period for which the term has been renewed or extended, has expired; and

• (b) the principal amount secured by the mortgage has not been repaid; and

• (c) the mortgagee has, after the date of expiry, accepted interest on the principal amount (except by entering into possession of the property or appointing a receiver) for a period not shorter than 3 months after that date; and

• (d) the mortgagor has observed all covenants under the mortgage instrument except the covenant to repay the principal amount on the due date.

(2) The mortgagee must not call up as payable the principal amount unless—

• (a) the mortgagee has served on the current mortgagor a notice of the intention to do so at the expiry of the period specified in the notice; and

• (b) that period has expired.

(3) The period specified in the notice under subsection (2) must not be shorter than 60 working days after the date of service of the notice.

(4) A notice under subsection (2) may be given in the same document as a notice under section 119 or 128.

(1) No amounts secured by a mortgage over land are payable by any person under an acceleration clause, and no mortgagee or receiver may exercise a power specified in subsection (2), by reason of a default, unless—

• (a) a notice complying with section 120 has been served (whether by the mortgagee or receiver) on the person who, at the date of the service of the notice, is the current mortgagor; and

• (b) on the expiry of the period specified in the notice, the default has not been remedied.

(2) The powers are—

• (a) the mortgagee’s power to enter into possession of mortgaged land:

• (b) the receiver’s power to manage mortgaged land or demand and recover income from mortgaged land:

• (c) the mortgagee’s or receiver’s power to sell mortgaged land.

(3) Subsection (1) is subject to sections 125 and 126.

(4) A notice required by this section may be given in the same document as a notice under section 118.

(1) The notice required by section 119 must be in the prescribed form and must adequately inform the current mortgagor of—

• (a) the nature and extent of the default; and

• (b) the action required to remedy the default (if it can be remedied); and

• (c) the period within which the current mortgagor must remedy the default or cause it to be remedied, being not shorter than 20 working days after the date of service of the notice, or any longer period for the remedying of the default specified by any term that is expressed or implied in any instrument; and

• (d) the consequence that if, at the expiry of the period specified under paragraph (c), the default has not been, or cannot be, remedied,—

  • (i) the amounts secured by the mortgage and specified in the notice will become payable; or

  • (ii) the amounts secured by the mortgage and specified in the notice may be called up as becoming payable; or

  • (iii) the powers of the mortgagee or receiver specified in the notice will become exercisable; or

  • (iv) more than 1 of those things will occur.

(2) A notice required by section 119 may specify that the action required to remedy the default includes the payment (whether to the mortgagee or receiver) of a specified amount, being the reasonable costs and disbursements (whether of the mortgagee or receiver) in preparing and serving the notice.

(1) A copy of the notice served under section 119 must, as soon as possible, be served (whether by the mortgagee or receiver) on the following persons if either the mortgagee or receiver has actual notice of the name and address of the person:

• (a) any former mortgagor:

• (b) any covenantor:

• (c) any mortgagee under a subsequent mortgage, and any holder of any other subsequent encumbrance, over the mortgaged land if—

  • (i) the subsequent mortgage or other subsequent encumbrance is registered; or

  • (ii) the subsequent mortgage or other subsequent encumbrance is unregistered, but either the mortgagee or receiver has actual notice of it; and

• (d) any person who has lodged a caveat under section 137 of the Land Transfer Act 1952, or a notice under section 42 of the Property (Relationships) Act 1976 having the effect of a caveat, against the title to the mortgaged land or any part of it.

(2) A failure to comply with this section does not prevent—

• (a) any amounts secured by the mortgage from becoming payable; or

• (b) the exercise of the mortgagee’s power to enter into possession of the mortgaged land; or

• (c) the exercise of the receiver’s power to manage the mortgaged land or demand and recover income from it; or

• (d) the exercise of the mortgagee’s or receiver’s power to sell the mortgaged land.

(3) However, if there is a failure to comply with this section, the mortgagee is liable in damages for any loss arising from that failure.

(1) This section applies if, under a mortgage over land,—

• (a) the mortgagee or receiver proposes, by reason of a default, to exercise a power to sell the mortgaged land; and

• (b) the mortgagee proposes to recover any deficiency on the sale from a former mortgagor or a covenantor.

(2) The mortgagee or receiver must serve notice of the intentions referred to in subsection (1) on the former mortgagor or covenantor concerned at least 20 working days before the exercise of the power of sale.

(3) Subsection (2) applies whether or not the former mortgagor or covenantor has been served with a copy of the notice required under section 118 or 119.

(4) A failure to serve a notice under subsection (2) on a former mortgagor or a covenantor does not prevent—

• (a) the mortgagee or receiver from exercising the power of sale; or

• (b) the mortgagee from recovering any deficiency from the former mortgagor or covenantor.

(5) However, a former mortgagor or a covenantor who is prejudiced by a failure to serve a notice under subsection (2) is, to the extent of the prejudice, released from liability to the mortgagee for the deficiency.

A term has no effect if it—

• (a) is expressed or implied in an instrument; and

• (b) conflicts with section 119, 120, 121, or 122.

(1) For the purposes of sections 119 to 122, a mortgagee or receiver does not exercise a power to sell mortgaged land, by reason of a default, by entering into a contract to sell, or granting an option to purchase, the land if the contract or option is conditional on the default not being remedied by the expiry of the period specified in a notice served under section 119.

(2) Subsection (1) applies whether the contract is entered into, or the option is granted, before or after the service of the notice referred to in section 119 or 122.

(1) If a mortgage over land arises under a mortgage debenture,—

• (a) a receiver may exercise any power, conferred by any term that is expressed or implied in the mortgage debenture, to manage the mortgaged land or demand and recover income from it without a notice being served on the current mortgagor under section 119; and

• (b) amounts secured by the mortgage debenture may become payable under an acceleration clause without a notice being served on the current mortgagor under section 119.

(2) Subsection (1) applies whether or not there is a collateral mortgage over the land securing the same amounts.

(1) A court may grant leave to a mortgagee to exercise any power to enter into possession of the mortgaged land, or to a receiver appointed under a mortgage over land to manage the mortgaged land or demand and recover income from it, by reason of a default,—

• (a) without a notice having been served on the current mortgagor under section 119; or

• (b) after a notice under that section has been served on the current mortgagor, but before the expiry of the period specified in the notice for the remedying of the default.

(2) The court may grant leave under this section on any conditions the court thinks fit.

(1) If, before 1 January 2008, a mortgagee has given a notice in accordance with section 90 of the Property Law Act 1952,—

• (a) section 118 does not prevent the mortgagee from calling up as payable the principal amount on or after that date in accordance with the notice; and

• (b) section 90 of the Property Law Act 1952 continues to apply in relation to the notice as if it had not been repealed by this Act.

(2) If, before 1 January 2008, a mortgagee has served a notice in accordance with section 92(1) of the Property Law Act 1952,—

• (a) section 119 does not prevent—

  • (i) the mortgagee from exercising a power to enter into possession of the mortgaged land, or to sell the mortgaged land, on or after that date in accordance with the notice; or

  • (ii) any amounts secured under the mortgage from becoming or being deemed to have become payable on or after that date in accordance with the notice; and

• (b) section 92 of the Property Law Act 1952 continues to apply in relation to the notice as if it had not been repealed by this Act.

(3) If, before 1 January 2008, a mortgagee has served a notice under section 92(6) of the Property Law Act 1952,—

• (a) section 122 does not prevent the mortgagee from recovering a deficiency on or after that date in accordance with the notice; and

• (b) section 92 of the Property Law Act 1952 continues to apply in relation to the notice as if it had not been repealed by this Act.

(1) No amounts secured by a mortgage over goods are payable by any person under an acceleration clause, and no mortgagee or receiver may exercise any power to sell the mortgaged goods, by reason of a default, unless—

• (a) a notice complying with section 129 has been served (whether by the mortgagee or receiver) on the person who, at the date of the service of the notice, is the current mortgagor; and

• (b) on the expiry of the period specified in the notice, the default has not been remedied.

(2) No mortgagee or receiver may exercise any power to sell the mortgaged goods, by reason of the goods being at risk, unless, not less than 10 working days before selling the goods, a notice in the prescribed form has been served (whether by the mortgagee or receiver) on the person who, at the date of the service of the notice, is the current mortgagor.

(3) Subsections (1) and (2) are subject to sections 135 and 136.

(4) A notice required by this section may be given in the same document as a notice under section 118.

(1) The notice required by section 128(1) must be in the prescribed form and must adequately inform the current mortgagor of—

• (a) the nature and extent of the default; and

• (b) the action required to remedy the default (if it can be remedied); and

• (c) the period within which the current mortgagor must remedy the default or cause it to be remedied, being not shorter than 10 working days after the date of service of the notice, or any longer period for the remedying of the default specified by any term that is expressed or implied in any instrument; and

• (d) the consequence that if, at the expiry of the period specified under paragraph (c), the default has not been, or cannot be, remedied,—

  • (i) the amounts secured by the mortgage and specified in the notice will become payable; or

  • (ii) the amounts secured by the mortgage and specified in the notice may be called up as becoming payable; or

  • (iii) the power, specified in the notice, of the mortgagee or receiver to sell the goods will become exercisable; or

  • (iv) more than 1 of those things will occur.

(2) A notice required by section 128(1) may specify that the action required to remedy the default includes the payment (whether to the mortgagee or receiver) of a specified amount, being the reasonable costs and disbursements (whether of the mortgagee or receiver) in preparing and serving the notice.

(1) A copy of the notice served under section 128 must, as soon as possible, be served (whether by the mortgagee or receiver) on the following persons if either the mortgagee or receiver has actual notice of the name and address of the person:

• (a) any former mortgagor:

• (b) any covenantor:

• (c) any mortgagee under a subsequent mortgage, and any holder of any other subsequent encumbrance, over the mortgaged goods if—

  • (i) the subsequent mortgage or other subsequent encumbrance is registered; or

  • (ii) the subsequent mortgage or other subsequent encumbrance is unregistered, but either the mortgagee or receiver has actual notice of it.

(2) A failure to comply with this section does not prevent—

• (a) any amounts secured by the mortgage from becoming payable; or

• (b) the exercise of a power to sell the mortgaged goods.

(3) However, if there is a failure to comply with this section, the mortgagee is liable in damages for any loss arising from that failure.

A term has no effect if it—

• (a) is expressed or implied in an instrument; and

• (b) conflicts with section 128, 129, or 130.

(1) This section applies if, under a mortgage over goods,—

• (a) the mortgagee or receiver proposes to exercise a power to sell the mortgaged goods; and

• (b) the mortgagee proposes to recover any deficiency on the sale from a former mortgagor or a covenantor.

(2) The mortgagee or receiver must serve notice of the intentions referred to in subsection (1) on the former mortgagor or covenantor concerned at least 10 working days before the exercise of the power of sale.

(3) Subsection (2) applies whether or not the former mortgagor or covenantor has been served with a copy of the notice required under section 118 or 128.

(4) However, subsection (2)—

• (a) is subject to section 135; and

• (b) does not apply if a court has, under section 136, granted leave to claim a deficiency without serving a notice under this section.

(5) A failure to serve a notice under subsection (2) on a former mortgagor or a covenantor does not prevent—

• (a) the mortgagee or receiver from exercising the power of sale; or

• (b) the mortgagee from recovering any deficiency from that former mortgagor or covenantor.

(6) However, a former mortgagor or a covenantor who is prejudiced by a failure to serve a notice under subsection (2) is, to the extent of the prejudice, released from liability to the mortgagee for the deficiency.

A term has no effect if it—

• (a) is expressed or implied in an instrument; and

• (b) conflicts with section 132.

(1) For the purposes of sections 128 to 132, a mortgagee or receiver does not exercise a power to sell mortgaged goods, by reason of a default, by entering into a contract to sell, or granting an option to purchase, the goods if the contract or option is conditional on the default not being remedied by the expiry of the period specified in a notice served under section 128(1).

(2) Subsection (1) applies whether the contract was entered into, or the option was granted, before or after the service of the notice referred to in section 128 or 132.

(1) Sections 128 and 132 do not apply if—

• (a) the goods may perish within 10 working days of the mortgagee taking possession of the goods; or

• (b) the mortgagee or receiver believes on reasonable grounds that the goods will decline substantially in value if the goods are not disposed of immediately; or

• (c) the cost of care and storage of the goods is disproportionately large in relation to the value of the goods; or

• (d) the goods consist of inventory; or

• (e) the mortgage over goods arises under a mortgage debenture (whether or not there is a collateral mortgage over those goods securing the same amounts); or

• (f) after the mortgagee takes possession of the goods, every person entitled to receive notice under section 128 or 132 (or both) consents in writing to the immediate sale of the goods.

(2) If a mortgage is over goods and some, but not all, of those goods are described in subsection (1),—

• (a) the mortgagee or receiver may exercise a power to sell the goods described in subsection (1) without complying with section 128; and

• (b) the mortgagee may recover a deficiency on that sale without complying with section 132.

(1) A court may grant leave to the mortgagee or receiver under a mortgage over goods to exercise any power under the mortgage to sell the mortgaged goods—

• (a) without a notice having been served on the current mortgagor as required by section 128; or

• (b) in the case of a default, after a notice under that section has been served on the current mortgagor but before the expiry of the period specified in the notice for the remedying of the default.

(2) A court may grant leave to the mortgagee under a mortgage over goods to claim a deficiency from a former mortgagor or covenantor without a notice having been served on the former mortgagor or covenantor as required by section 132.

(3) The court may grant leave under this section on any conditions the court thinks fit.

(1) If a mortgagee becomes entitled under a mortgage, after compliance with subpart 5, to exercise a power to enter into possession of mortgaged land or goods, the mortgagee may exercise that power by—

• (a) entering into or taking physical possession of the land or goods peaceably and without committing forcible entry under section 91 of the Crimes Act 1961; or

• (b) asserting management or control over the land or goods by requiring a lessee or occupier of the land, or a lessee or bailee of the goods, as the case may be, to pay to the mortgagee any rent or profits that would otherwise be payable to the current mortgagor; or

• (c) applying to a court for an order for possession of the land or goods.

(2) A mortgagee may do all or any of the things referred to in subsection (1) before or after taking any steps to exercise any power to sell the mortgaged land or goods.

(3) Subsection (1)(a) is subject to section 138.

(4) Unless the context otherwise requires, a reference in this subpart to land or goods includes a reference to land and goods.

(1) If a mortgagee has consented to a lease of all or part of the mortgaged land or goods, the mortgagee may not, in accordance with section 137(1)(a), enter into or take physical possession of any land or goods that are subject to the lease, except in the exercise of a power conferred by section 147.

(2) Subsection (1) applies whether the consent was given, or the lease was entered into, before or after—

• (a) the mortgagee entered into the mortgage; or

• (b) the default occurred; or

• (c) the goods became at risk.

(1) A mortgagee who exercises a power to enter into possession of mortgaged land or goods in accordance with section 137 becomes a mortgagee in possession of the land or goods on the earlier of—

• (a) the date on which the mortgagee enters into, or takes, physical possession of the land or goods; or

• (b) the date on which the mortgagee first receives any income from the land or goods as mortgagee in possession; or

• (c) the date of the mortgagee's application to the court for the order if—

  • (i) the mortgagee applies to the court for an order for possession of the land or goods; and

  • (ii) the court, in response to the mortgagee's application, makes the order.

(2) A reference to the date or time of entry into possession of land or goods by a mortgagee in possession has a corresponding meaning.

(3) Despite subsections (1) and (2), sections 156, 162, and 163 apply to a mortgagee who becomes a mortgagee in possession under subsection (1)(c) of this section—

• (a) as if the references in sections 156(1) and 162(1) to the mortgagee's entering into possession were references to the making of the order for possession of the land or goods by the mortgagee; and

• (b) as if the references in sections 156(1)(b) and (c) and 163(1)(a) to the date of entry into possession were references to the date of the making of that order.

(1) For the purposes of this Part, a mortgagee under a mortgage over accounts receivable who is entitled to receive payment of accounts receivable must be treated as becoming a mortgagee in possession of the accounts receivable on the date on which the mortgagee first requires payment from any debtor.

(2) A reference to the date or time of entry into possession of accounts receivable by a mortgagee in possession has a corresponding meaning.

(1) A mortgagee in possession of a mortgaged leasehold estate or interest in land is liable to the person for the time being entitled to the reversion of the leasehold estate or interest for the observance and performance of all covenants of the lessee (including the payment of rent).

(2) A mortgagee in possession of mortgaged leased goods is liable to the lessor of the goods for the observance and performance of all covenants of the lessee (including the payment of rent).

(3) However, the liability under this section—

• (a) arises only for a failure to observe and perform those covenants that occurs while the mortgagee is in possession of the leasehold estate or interest in land or of the leased goods; and

• (b) is limited to the amount of the income received from the leasehold estate or interest in land, or the leased goods, by the mortgagee as mortgagee in possession.

(1) A mortgagee in possession of mortgaged land may, as lessor, enter into a lease of all or any part of the land.

(2) Subsection (1) is subject to compliance with sections 143 to 146.

(3) A mortgagee in possession may execute all assurances and do all other things necessary to enter into a lease of land in accordance with this section and sections 143 to 146.

(1) A mortgagee in possession must, when entering into a lease of mortgaged land,—

• (a) have reasonable regard for the interests of the current mortgagor, any former mortgagor, any covenantor, any mortgagee under a subsequent mortgage, and the holder of any other subsequent encumbrance; and

• (b) take reasonable care to obtain the best rent reasonably available at the time of entering into the lease.

(2) A lease of land entered into by a mortgagee in possession must, except with the consent of the current mortgagor or of a court,—

• (a) be for a term not exceeding—

  • (i) 2 years, in the case of a tenancy to which the Residential Tenancies Act 1986 applies; or

  • (ii) 15 years (including all renewal terms), in any other case; and

• (b) contain the terms and conditions that are reasonable and appropriate, having regard to the interests of the current mortgagor, any former mortgagor, any covenantor, any mortgagee under a subsequent mortgage, and the holder of any other subsequent encumbrance, on the one hand, and the mortgagee on the other; and

• (c) provide that the lease takes effect in possession not later than 6 months after the date on which it is entered into.

(3) A mortgagee in possession of a leasehold estate or interest in land must not enter into a sublease of that estate or interest for a term longer than the balance of the term of the superior lease.

(4) A lease or sublease of land entered into by a mortgagee in possession for a term longer than that permitted by subsection (2)(a) or (3), as the case may be, must be taken to be a valid lease or sublease for the maximum term for which that lease could have been entered into under the relevant provision.

(1) A lease of land entered into by a mortgagee in possession—

• (a) is not binding on a person holding any other encumbrance over the land to the extent that the encumbrance has priority over the mortgagee’s mortgage, unless that person has consented to the lease:

• (b) is binding on a person holding a subsequent encumbrance over the land:

• (c) is binding on the current mortgagor to the extent provided in subsection (2).

(2) When a mortgagee who has entered into a lease of land has withdrawn from possession of that land, the current mortgagor, or any person to whom the land has been transferred, assigned, or transmitted, is bound by the lessor’s covenants and is entitled to enforce the lessee’s covenants under the lease.