Transfer of Property Act Section 71 — Renewal of mortgaged lease

CHAPTER IV OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES — Rights and Liabilities of Mortgagee

General

Summary

If the property given as security for a loan is a lease, and the borrower later gets that lease renewed, the lender automatically has a right to the renewed lease as part of the same security. This applies unless the borrower and lender have agreed otherwise in their contract.

Official Text

When the mortgaged property is a lease 1***, and the mortgagor obtains a renewal of the lease, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to the new lease.