The purchaser of a business wants to buy a pizza shop business trading form six separate leased locations subject to the grant of new leases to the purchaser for all six shops.

The title search you have ordered discloses that there is a mortgage over all six premises owned by Pizza Landrich Pty Ltd in favour of the Aussie Bank Ltd.

Is the mortgagees consent needed to all six new leases to bind the mortgagee?

Please select the INCORRECT answer below.

1. The mortgagee does not have to consent at law to a new lease if the lease term exceeds that of the mortgage.
2. Generally a mortgage will deem the mortgagor to be in breach unless the mortgagee's consent is obtained to a new lease.
3. If the mortgagor is in breach of the mortgage the mortgagee may be able to recover possession of the premises from the lessee.
4. The new leases do not bind the mortgagee unless the mortgagee has consented to them in writing or alternatively the mortgagee participates in an electronic workspace such as PEXA to enable registration of the 6 new leases with LRS.