MORTGAGEE IN POSSESSION. Where a mortgagor has failed to repay the money due under his mortgage, and the mortgagee has taken into his own hands the collection of the rents and management of the property, he is a mortgagee in possession. A mort gagee, however, usually puts in a receiver to manage the estate and collect rents, as the mortgagee thereby avoids the liabilities to which he would be exposed by being a mortgagee in possession. A mortgagee in possession may be liable for any damages that occur, if he gives up possession without the consent of the mortgagor.
An equitable mortgagee by deposit of title deeds can take possession only after he has received the sanction of the Court.
By the Conveyancing and Law of Pro perty Act, 1881, Section 18, a mortgagee in possession shall have, if and as far as a contrary intention is not expressed in the mortgage deed, or otherwise in writing, power to make from time to time, an agri cultural or occupation lease for any term not exceeding twenty-one years ; a building lease for any term not exceeding ninety-nine years ; and every such lease shall be made to take effect in possession not later than twelve months after its date. Every such lease shall
reserve the best rent that can reasonably be obtained, and shall contain a covenant by the lessee for payment of the rent and a condition of re-entry on the rent not being paid within a time therein specified not exceeding thirty days. Every such building lease shall be made in consideration of the lessee, or some person by whose direction the lease is granted, having erected, or agree ing to erect within not more than five years from the date of the lease, buildings, new or additional, or having improved or repaired buildings, or agreeing to improve or repair buildings within that time, or having exe cuted, or agreeing to execute within that time, on the land leased, an improvement for or in connection with building purposes. A nominal rent may be made payable for the first five years, or any less part of the term.