How first Leases disposed of.

1. Every lease (hereinafter referred to as a "lease") shall be put up to public competition by tender, after public notice thereof, at an upset rental equivalent to five pounds per centum on the capital value as fixed by the lessor of the land proposed to be leased.

Provided that such value so fixed shall not be less than the price for which similar lands may be sold for cash under the law for the time being regulating the price of such land in the district.

2. Every tender shall be in the form in the First Schedule hereto. Forms of tender can be had on application at the District Land Offices, New Plymouth, Patea, and Hawera.

3. Every tenderer will be notified that his tender has been accepted, in the form in the Second Schedule hereto, or to that effect.

4. All tenders for any land shall be opened by the lessor or Reserves Trustee at one time as advertised.

Any such tender shall be deemed to be informal and incapable of being accepted unless closed up and accompanied by a statutory declaration in the form or to the effect set forth in the Third Schedule hereto, and also accompanied by an amount equal to six months' rent at the rate tendered, paid either in cash or by a marked cheque. Forms of declaration can be obtained at the offices before mentioned.

5. The highest tenderer for a lease, if his tender shall equal or exceed such upset price, shall be declared the lessee, and be entitled to possession of the lands the lease of which has been so purchased by him when and so soon as he has executed a lease page 5 thereof in accordance with the provisions of the Act and these regulations, and has complied with any other conditions lawfully prescribed in that behalf at the time of sale.

6. If the rent offered by two or more persons is of the same amount, and is higher than that offered by any other tenderers, then the lessor shall decide by lot which of such two or more persons shall be declared the lessee.

7. The deposits and fees paid by the unsuccessful tenderers shall be returned to them by the lessor or Reserves Trustee immediately after the tenders have been opened.

8. If any person who has been declared a lessee hereunder shall fail to execute his lease within twenty-one days from the date of the notice of acceptance of his tender in the form in the Second Schedule hereto, his deposit shall be absolutely forfeited to the lessor, and his right to obtain a lease of such lands shall absolutely cease and determine: Provided the lease is ready for execution at the office for the district of the Reserves Trustee; otherwise the lessee shall not be deemed to have committed default until the expiration of fifteen days after notice shall have been sent to him that the lease is so ready.

Provided, further, that at any time within seven days from such forfeiture the lessor may declare the next highest tenderer for the same lease to be the lessee, or, if the rent offered by two or more persons is the same amount, and is higher than the rent offered by any other tenderer save the one who has so forfeited his right to a lease as aforesaid, the lessor may decide by lot which of such others shall be the lessee, upon his again pa[unclear: y for th]e deposit and fees as aforesaid, if his deposit [unclear: shall] have been previously returned to him; and thereupon the provisions of the Act and these regulations shall apply to such person as if he had been declared the lessee on the day of the opening of the tenders. But any such tenders, to be capable of being accepted under this proviso, must equal or exceed the upset price as aforesaid.

And in case of forfeiture of his right to a lease by the person so declared a lessee under the above proviso, the procedure prescribed by the said proviso shall, mutatis mutandis, be continued from time to time, until the land be leased in accordance with the Act and these regulations, or until there be a failure page 6 of all tenderers whose tenders are formal and who are willing to accept the lease in accordance with the Act and these regulations.

9. If no tender shall be received for any of the leases advertised for competition by tender prior to the time fixed for opening the tenders, any person may at any time thereafter apply for any one of such leases, and be declared the lessee thereof at the upset rental fixed, upon complying with the other conditions of the Act and these regulations prescribed as to tenders.

If two or more applicants shall lodge their tenders at the same time, the right to the lease shall be decided by lot.

10. Any one person may tender for two or more leases at the same time, but, except in the case provide:! for by clause fourteen hereof, he shall not be capable of becoming the lessee under more than one lease; and if he shall be found, upon the opening of the tenders, to be the highest tenderer for more than one lease, he shall, except in the case before mentioned, elect forthwith which of such leases he will accept, and thereupon the lessor shall, subject to the other provisions of the Act and these regulations, declare the next highest tenderer for the lease or leases which the first-mentioned tenderer has elected not to accept to be the lessee, or, if there be two or more tenderers at the same amount and higher than any other tenderers, shall decide by lot.

Provided that, in the event of any person tendering for two or more leases, the deposit of a sum equal to one half-year's rent of the tender largest in amount shall be sufficient.

Provided further that, if he be tendering for two or more leases such as he may in the aggregate become the lessee of under the fourteenth clause hereof, the deposit shall in such case be a half-year's rent, at the rate tendered for each such lease.

11. The lessor may at any time reduce the upset rental of land which he has failed to lease, subject to the proviso to clause one hereof, and may again call for tenders for the same at such reduced rental.

12. Any person of the age of eighteen years may become a lessee hereunder, and shall be as capable of executing a lease and shall be bound by the terms thereof and of the Act and these regulations as if such person was of full age.