112.— (1) A mortgagor of land, while in possession, may, as against every other incumbrancer, lease the land with the consent in writing of the mortgagee, which consent shall not be unreasonably withheld.

[CA 1881, s. 18][CA 1911, s. 3]

(2) A lease made without such consent is voidable by a mortgagee who establishes that—

(a) the lessee had actual knowledge of the mortgage at the time of the granting of the lease, and

(b) the granting had prejudiced the mortgagee.

(3) A mortgagee of land while in possession or, after the mortgagee has appointed a receiver and so long as the receiver acts, the receiver, may, as against all prior incumbrancers, if any, and the mortgagor, lease the land provided—

(a) it is for the purpose of—

(i) preserving the value of the land, or

(ii) protection of the mortgagee’s security, or

(iii) raising income to pay interest due under the mortgage or otherwise reduce the debt,

or

(b) it is otherwise an appropriate use of the land pending its sale, or

(c) the mortgagor consents in writing, or

(d) the court in any action relating to the mortgaged land makes an order permitting such lease.

(4) In this section “mortgagor” does not include an incumbrancer deriving title from or under the original mortgagor.

(5) The power of leasing conferred by this section applies only to mortgages created after the commencement of this Part.