34Amount of compensation for mortgagee

34 Amount of compensation for mortgagee

(1)  Where all of land which is subject to a mortgage is taken, the amount of compensation to which the mortgagee is entitled under this Act is –

(a) the principal secured by the mortgage; and

(b) the interest due on the mortgage at the day on which the acquiring authority admits the mortgagee's claim for compensation and 30 days' additional interest at the interest rate of the mortgage at that day; and

(c) the costs and charges, if any, due to the mortgagee under the mortgage; and

(d) the mortgagee's costs relating to producing or surrendering, and to executing, any deeds and documents that are required to be produced, surrendered or executed under section 45 ; and

(e) a sum sufficient to meet the costs of reinvestment of the principal, if the mortgage is paid off prematurely; and

(f) if –

(i) the mortgage is paid off prematurely; and

(ii) the principal is or is to be reinvested; and

(iii) the rate of interest secured by the mortgage is higher than the rate of interest that can be obtained or can reasonably be expected to be obtained on reinvestment in a comparable form of security, regard being had to the then current rate of interest –

a sum to meet the loss sustained by the mortgagee by reason of the premature repayment of the principal.

(2)  Where a part of land which is subject to a mortgage is taken, the mortgagee may elect to have all or part of any compensation to which the mortgagor is entitled under this Act paid to the mortgagee as a payment towards the principal secured by the mortgage and the interest due on the mortgage at the day on which the acquiring authority admits the mortgagee's entitlement to make the election.

(3)  An election under subsection (2) is to be –

(a) in writing; and

(b) [Section 34 Subsection (3) amended by No. 23 of 2021, s. 16, Applied:01 Jan 2022] served on the acquiring authority within 6 months after the service on the mortgagee of a notice under or .