114.— (1) Subject to subsection (2), a mortgagor or mortgagee in possession (or after the mortgagee has appointed a receiver and so long as the receiver acts, the receiver) may accept a surrender of a lease previously granted under section 112 or as authorised by the terms of the mortgage, whether the surrender relates to the whole or part only of the land leased.

[CA 1911, s. 3]

(2) Subsection (1) applies only where the surrender of the previous lease is for the purpose of granting a new lease under section 112 or as authorised by the terms of the mortgage.

(3) On such a surrender—

(a) the term of the new lease shall not be less than the unexpired term which would have existed under the surrendered lease if it not been surrendered,

(b) the rent reserved by the new lease shall not be less than the rent which would have been payable under the surrendered lease if it had not been surrendered,

(c) where part only of the land has been surrendered—

(i) the rent reserved by the new lease shall not be less than is required to make the aggregate rents payable under the remaining lease and new lease not less than the rent payable under the surrendered lease if no partial surrender had been accepted, and

(ii) any other modifications of the original lease shall comply with section 113.

(4) A purported acceptance of a surrender which fails to comply with subsection (3) is void.

(5) Where a surrender involves payment of a premium or consideration other than the agreement to accept surrender, the surrender is void unless, in the case of a surrender—

(a) to the mortgagor, the consent of incumbrancers, or

(b) to a second or subsequent mortgagee, the consent of any prior incumbrancer,

is obtained.