The "Assignment of Rents" clause is a contractual provision frequently found in mortgages or deeds of trust, allowing the lender to take possession of rental income generated by the mortgaged property in the event of borrower default. Essentially, it serves as additional security for the lender, ensuring they have a means of income should the property owner fail to meet their mortgage obligations.
The Red Fox Note is secured by a first priority security interest in the Red Fox Property pursuant to a deed of trust (the “Red Fox Deed”), an assignment of rents (the “Red Fox Assignment of Rents”) and is guaranteed by the Company (the “Corporate Guaranty”) and Raymond M. Gee.
The Solid Rock Note is secured by a first priority security interest in the Solid Rock Property pursuant to a mortgage (the “Solid Rock Mortgage”) and an assignment of leases and rents (the “Solid Rock Assignment of Rents”) and is guaranteed by Raymond M. Gee. The Solid Rock Loan Agreement and Solid Rock Note contain customary financial and other covenants and events of default for a loan of its type. The foregoing summary of the terms and conditions of the Solid Rock Purchase Agreement, the Solid Rock Assignment, the Solid Rock Loan Agreement, the Solid Rock Note, the Solid Rock Mortgage and the Solid Rock Assignment of Rents does not purport to be complete and is qualified in its entirety by reference to the full text of the agreements attached as exhibits hereto, which are incorporated herein by reference.
Enforcement of Assignment of Rents. Beneficiary may: 8.2.1 terminate the license granted to Grantor to collect the Rents, collect and sue for the Rents in Beneficiary’s own name, give receipts and releases therefor, and after deducting all expenses of collection, including reasonable attorneys’ fees, apply the net proceeds thereof to any Debt as Beneficiary may elect; 8.2.2 make, modify, enforce, cancel, or accept surrender of any Leases, evict tenants, adjust the Rents, maintain, decorate,’ refurbish, repair, clean, and make space ready for renting, and otherwise do anything Beneficiary deems advisable in connection with the Mortgaged Property; 8.2.3 apply the Rents so collected to the operation and management of the Mortgaged Property, including the payment of reasonable management, brokerage and attorneys’ fees, or to the Debt; and 8.2.4 require Grantor to transfer all security deposits and records thereof to Beneficiary.
Assignment of Rents, Leases, and Security Deposits. Pursuant to the Assignment of Rents, Leases, and Security Deposits dated as of December 14, 2023 (the “Lease Assignment”), among Lifted Made in favor of the Lender, in connection with the terms of the Loan Agreement and BL Note, Lifted Made agreed to assign its rights to leases and income from the 5511 Building to Lender. In the event of default under the Loan Agreement or BL Note, or other cross collateralized obligations, the Lender would be entitled to the foregoing equity collateral to the detriment of the Borrower. Default under any of the agreements described above could have a highly detrimental, if not catastrophic impact on our company.
The Loan is secured by a real estate mortgage (the “Mortgage”) and assignment of rents (the “Assignment”) encumbering the property commonly known as 900 E. Green Street, Bensenville, IL. Rubicon Worldwide LLC, an Illinois limited liability company and a wholly owned subsidiary of the Company, and the Company entered into unlimited commercial guaranty agreements (the “Worldwide Guaranty” and “Company Guaranty,” respectively) in favor of the Lender.
Borrower shall have delivered a Deed of Trust and Assignment of Rents and Leases and a Security Agreement: Fixtures for the Property located at 1402 NE Loop 410 Expressway, San Antonio, Bexar County, Texas 78209.
The loan is secured by a security agreement and assignment of rents that Hidden Oaks Gvest entered into as a debtor with the Lender (the “Hidden Oaks Security Agreement”). The loan is guaranteed by Raymond M. Gee pursuant to a guaranty agreement dated September 16, 2021 (the “Hidden Oaks Guaranty”).
Mortgage/Deed of Trust/Assignment of Rents: Verify that a mortgage or deed of trust is in file and is duly executed and notarized and that it contains all applicable riders including an assignment of rents.
Under a $7,000,000 facility, subject to annual review, borrowings are collateralized by a combination of first lien on the equipment and assignment of rents and a second lien on the equipment representing the leased equipment’s residual values. On this facility, $5,217,438 was outstanding as of December 31, 2020. Outstanding balances are due between January 2021 and May 2023.
Assignment of Rents: With respect to any Business-Purpose Mortgage Loan, an assignment of rents thereunder, notice of transfer or equivalent instrument, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment of rents.
ABSOLUTE ASSIGNMENT/LICENSE. This assignment of Rents and Leases shall be absolute and effective upon execution by Trustor. Beneficiary grants to Trustor a revocable license to collect Rents under the Leases to the extent that the same are attributable to one (1) month of the unexpired term of the Lease unless and until an Event of Default occurs.
An Assignment of Rents is a legal document or provision often used in real estate transactions, particularly in financing and mortgage agreements. It grants a lender (often a mortgagee) the right to collect rent payments directly from a property’s tenants if the property owner defaults on loan payments. This right serves as additional security for a lender because it ensures a stream of income to cover loan payments, in case the property owner faces financial difficulties.
An Assignment of Rents should be used when:
It is especially commonplace in commercial real estate lending where the properties are typically income-producing.
Writing an Assignment of Rents involves several key components:
It is advisable to consult with a legal professional to ensure compliance with local laws and regulations.
An Assignment of Rents is commonly included in:
Including such a provision ensures the lender can mitigate risk by having a direct claim on rental income, thus securing part of their financial interest in the property.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "Assignment of Security Interest" clause outlines the conditions under which a party to a contract can transfer their security interest in a collateral to another party, allowing the transferee to assume the rights and obligations associated with that interest. This clause ensures that any assignment is conducted in accordance with the agreement's terms and applicable laws, protecting the interests of all parties involved.
An assignment clause in a contract outlines the conditions under which one party may transfer its rights or obligations to another party. It typically specifies whether prior consent is required for such a transfer and identifies any exceptions to these requirements.
An assumption agreement is a contractual clause in which one party agrees to take on the obligations and responsibilities of another party as specified in the original agreement. It often occurs in contexts like mergers, acquisitions, or refinancing, where the assuming party consents to fulfill the duties formerly held by the original party.
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