absolute assignment of leases and rents

Assignment Of Leases And Rents: Definition & Sample

Jump to section, what is an assignment of leases and rents.

The assignment of leases and rents, also known as the assignment of leases rents and profits, is a legal document that gives a mortgage lender right to any future profits that may come from leases and rents when a property owner defaults on their loan. This document is usually attached to a mortgage loan agreement.

Assignment of leases and rents allows lenders to a degree of financial protection in case a loan default occurs. This document is an agreement made between a borrower and a lender of mortgage loans. It often details an exact amount the lender will be entitled to if a default happens.

Common Sections in Assignments Of Leases And Rents

Below is a list of common sections included in Assignments Of Leases And Rents. These sections are linked to the below sample agreement for you to explore.

Assignment Of Leases And Rents Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.9 10 d368735dex109.htm ASSIGNMENT OF LEASES AND RENTS , Viewed October 4, 2021, View Source on SEC .

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My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.

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• | Absolute Assignments of Rents Are Not So "Absolute"

Absolute Assignments of Rents Are Not So "Absolute"

Client Alert | 4 min read | 12.11.12

In exchange for a loan secured by commercial property, a lender often receives an absolute assignment of the property's leases and rents. But who owns those rents once the borrower files for bankruptcy protection? Debtors argue that the rents are property of the bankruptcy estate and constitute cash collateral available for their use during the case. Lenders, on the other hand, assert that the assignments convey ownership of the rents, and as such, the rents may be used only with their consent. 

The answer depends not on bankruptcy law, but on the law of the governing jurisdiction 1 – and then potentially on the measures that the lender undertakes following a default. 

Two cases out of New York illustrate the importance of a lender's diligence in enforcing its rights under a mortgage and assignment of rents.  In re Soho 25 Retail, LLC 2 involved a note secured by a mortgage on commercial property as well as an Assignment of Leases and Rents that provided the lender with an absolute and unconditional assignment of the borrower's rights to the rents. Upon the borrower's default, the lender issued an appropriate notice to collect rent directly from the tenants, commenced a foreclosure action, requested the appointment of a receiver and obtained a default judgment. On the eve of the foreclosure sale, the borrower filed for chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York.

The lender quickly filed for relief from the automatic stay to proceed with foreclosure, and asserted that the assignment was self-executing and absolute; that its terms gave the borrower only a revocable license to the rents while no default existed; and that the assignment expressly did not require the lender to undertake any affirmative acts to enforce it. The Bankruptcy Court noted that the majority of New York cases prohibit absolute assignments of rent, regardless of the language in the parties' agreement, and ruled that control of the property's rental revenues depended on the affirmative steps, if any, that the lender pursued toward asserting its interest in the rents. 3  The court held that, in this instance, the lender had taken sufficient steps to make the assignment enforceable.

But in In re South Side House, LLC, 4 decided just over a year later, the U.S. Bankruptcy Court for the Eastern District of New York reached a different conclusion. The underlying mortgage in South Side contained a similar, "absolute" assignment of rents provision. Although the lender commenced a foreclosure action, had a receiver appointed, and obtained summary judgment of foreclosure prior to the debtor's bankruptcy petition, the court ruled that these measures were insufficient to obtain control of the property's rental revenues.

The South Side court acknowledged other decisions that reached different results. However, the court observed that because New York operates under a "lien theory" of mortgages, an assignment of rents could not be "absolute" and a secured lender would acquire "title" to the property's rents only after foreclosing its lien at a sale. The court ruled that the lender's efforts to exercise control over the rents gave the lender only an enforceable interest in the rents – but not title – and permitted the debtor to utilize the rents, in the first instance, as cash collateral. 5  

Title Theory versus Lien Theory

Under the "title theory" of mortgages, a mortgage is considered a conveyance of the borrower's interest in property to the lender, which is restored upon satisfaction of the debt. As real property law evolved, the majority of states, including New York, abandoned this notion in favor of "lien theory," which treats mortgage transactions as secured debtor-creditor relationships. Under "lien theory," a lender must foreclose its lien before taking title to the collateral or, at a minimum, the lender must take affirmative steps in order to make a case for control over rents. Some states, such as Maryland, 6 have enacted legislation to dispense with this requirement in order to eliminate inconsistent determinations as to what constitutes sufficient affirmative efforts by a lender – a dilemma reflected in the cases described above. 

Practical Implications

Instead of playing the odds in any particular bankruptcy case, lenders should protect against uncertainty by moving swiftly to enforce their rights under assignments of rent when borrowers default, particularly in lien theory states. Measures that directly affect payment of rent, such as issuing a notice advising tenants to pay rent to the lender (where authorized by the loan documents) and obtaining the appointment of a receiver, can be effective measures. It is crucial that lenders consult with counsel from the drafting of the loan documents to implementing rights upon default to ensure that their interests are protected.

1 Bankruptcy law determines what constitutes property of the estate, but state law determines the debtor's interest in a given item.  See, e.g. , Butner v. U.S. , 440 U.S. 48, 54-55 (1979); In re Koreag Controle et Revision S.A. , 961 F.3d 341, 349 (2d Cir.), cert. denied, 113 S. Ct. 188 (1992). 2 In re Soho 25 Retail LLC , No. 10-15114, 2011 WL 1333084 (Bankr. S.D.N.Y. Mar. 31, 2011). 3 Id . at *6-7 (citing 641 Ave. of the Ams. Ltd. Partnership v. 641 Assocs. , 189 B.R. 583, 591 (Bankr. S.D.N.Y. 1995). 4 In re South Side House, LLC , 474 B.R. 391 (Bankr. E.D.N.Y. 2012).  5 In re South Side House , 474 B.R. at 403-07, 411-12. 6 Md. Code Ann., Real Property § 3-204 (LexisNexis 2010).

Gary A. Stahl

Senior Counsel

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Assignment of Rents – What, Why, and How?

Article by:

Madelaine prescott, esq., share this post:.

• November 29, 2023

These days, almost all commercial loans include an Assignment of Rents as part of the Deed of Trust or Mortgage. But what is an Assignment of Rents, why is this such an important tool, and how are they enforced?

An Assignment of Rents (“AOR”) is used to grant the lender on a transaction a security interest in existing and future leases, rents, issues, or profits generated by the secured property, including cash proceeds, in the event a borrower defaults on their loan. The lender can use the AOR to step in and directly collect rental payments made by the tenant. For an AOR to be effective, the lender’s interest must be perfected, which has a few fairly simple requirements. The AOR must be in writing, executed by the borrower, and recorded with the county where the property is located. Including an AOR in the recorded Deed of Trust or Mortgage is the easiest and most common way to ensure the AOR meets these requirements should it ever need to be utilized.

When a borrower defaults, lenders can take advantage of AORs as an alternative to foreclosure to recoup their investment. With a shorter timeline and significantly lower costs, it is certainly an attractive option for lenders looking to get defaulted borrowers back on track with payments, without the potential of having to take back a property and attempting to either manage it or sell it in hopes of getting your money back out of the property. AORs can be a quick and easy way for the lender to get profits generated by the property with the goal of bringing the borrower out of default. But lenders should carefully monitor how much is owed versus how much has been collected. If the AOR generates enough funds so that the borrower is no longer in default, the lender must stop collecting rents generated by the property.

Enforcement of an AOR can also incentivize borrowers to work with the lender to formulate a plan, as many borrowers rely on rental income to cover expenses related to the property or their businesses. Borrowers are generally more willing to come to the table and negotiate a mutual, amicable resolution with the lender in order to protect their own investment. A word of warning to lenders though: since rental income is frequently used to pay expenses on the property, such as the property manager, maintenance, taxes, and other expenses, the lender needs to ensure they do not unintentionally hurt the value of the property by letting these important expenses fall behind. This may hurt the lender’s investment as well, as the property value could suffer, liens could be placed on the property, or the property may fall into disrepair if not properly maintained. It is also important for lenders to be aware of the statutes surrounding the payment of these expenses when an AOR is being used, as some state’s statutes require the lender to pay certain property expenses out of the collected rents if requested by the borrower.

In addition to being shorter and cheaper than foreclosure, AORs can be much easier to enforce. In California, the enforcement of an AOR is governed by California Civil Code §2938. This statute specifies enforcement methods lenders can use and restrictions on use of these funds by the lender, among other things. Under CA Civil Code §2938(c), there are 4 ways to enforce an AOR:

• The appointment of a receiver;
• Obtaining possession of the rents, issues, profits;
• Delivery to tenant of a written demand for turnover of rents, issues, and profits in the correct form; or
• Delivery to assignor of a written demand for the rents, issues, or profits.

One or more of these methods can be used to enforce an AOR. First, a receiver can be appointed by the court, and granted specific powers related to the AOR such as managing the property and collecting rents. They can have additional powers though; it just depends on what the court orders. This is not the simplest or easiest option as it requires court involvement, but this is used to enforce an AOR, especially when borrowers or tenants are uncooperative. Next is obtaining possession of the rents, issues, profits, which is exactly as it seems; lenders can simply obtain actual possession of these and apply the funds to the loan under their AOR.

The third and fourth options each require delivery of a written demand to certain parties, directing them to pay rent to the lender instead of to the landlord. Once the demand is made, the tenant pays their rent directly to the lender, who then applies the funds to the defaulted loan. These are both great pre-litigation options, with advantages over the first two enforcement methods since actual possession can be difficult to obtain and courts move slowly with high costs to litigate. The written demands require a specific form to follow called the “Demand To Pay Rent to Party Other Than Landlord”, as found at CA Civil Code §2938(k). There are other notice requirements to be followed here, so it is essential to consult with an experienced attorney if you are considering either of these options. California Civil Code §2938 specifically provides that none of the four enforcement methods violate California’s One Action Rule nor the Anti-Deficiency Rule, so lenders can confidently enforce their AORs using the above methods with peace of mind that they are not violating other California laws.

Whether you are looking to originate a new loan, or you are facing a default by your borrower, understanding what an Assignment of Rents is and how it operates can be extremely beneficial. Enforcing an AOR can be an easier option than foreclosure and can help promote a good relationship with your borrower when handled correctly. If you have any questions about AORs, or need further details on how to enforce them, Geraci is here to help.

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Assignment of Rents & Leases

Assignment of rents and leases in business and real estate transactions.

An “Assignment of Rents and Leases” is a crucial legal instrument that significantly impacts commercial and residential real estate, and mergers and acquisitions of real estate. Having a properly drafted and executed assignment means the rights and assets that are transferred give the new party (the assignee) the right to receive payments.

What is an assignment of rents and leases?

An assignment of rents and leases is a legal agreement in which the individual or company entitled to receive payments transfers that right to another party. Most often, this occurs (1) when a property owner hires a property manager, or (2) in acquisitions, such as a property management company selling their accounts to another property management company or a commercial landlord selling their portfolio to a buyer.

How is an assignment of rents and leases used?

This arrangement is often utilized in business sales, account sales, financing, and investment transactions as a means of securing debt or protecting the interests of the lender or property owner.

In the financing context, an assignment often grants the lender or assignee the authority to collect and apply the rents from the property should the borrower default on their loan; this is important when the borrower collateralizes real estate in order to receive the loan. In a property management context, an assignment often serves to effectively transfer management rights to the new company.

An assignment of rents and leases is probably most commonly used in a commercial real estate context when there is a sale of a commercial property, or in the residential real estate context when there is a change in property managers.

What terms should be included in an assignment of rents and leases?

Certain components should be included in a proper assignment. Here are a few of the foundational terms for an assignment of rents and leases:

• Parties. All parties should be clearly identified and defined. This can include the borrower, lender, assignee, assignor, successor, etc.
• Property description. The real estate parcel(s) involved in the assignment should be described by legal description, street address, and more.
• Lease terms, rents, and disclosures. The actual lease agreements that are being transferred to the new landlord, property manager, lender, etc. should be provided to the assignor/successor, along with an easy-to-read schedule of rents and other crucial details per parcel or premises.
• Rights and obligations. Each party should have their rules, permissions, and contractual rights and obligations outlined in the assignment language. The rights and obligations of each stakeholder will be widely varied based on the needs and financial position of each party, the existing leases being assigned, and the specifics of the subject properties.

Best Commercial Real Estate Attorneys in Oklahoma

It is crucial to engage an attorney with experience in properly negotiating, drafting, and executing assignments of rents and leases. They can guide you through the process, ensuring that the assignment is tailored to your specific needs and complies with all relevant legal requirements. The attorneys of Avenue Legal Group have the experience you need and want in your transaction. Contact our firm to discuss your transaction, assignment of rents and leases, or other real estate documentation.

Looking for local counsel in Oklahoma for your commercial real estate transaction? Our firm frequently works with attorneys, investors, and lenders from outside the state. Contact us by call, text, email, or website submission to discuss your matter.

Other helpful information:

• Commercial Real Estate Transactions in Oklahoma
• Due Diligence in Oklahoma Real Estate Transactions
• Essential Terms for Every Commercial Lease
• Attorney for Real Estate Contract Review
• Estate Planning
• Real Estate and Investing

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Assignment of Rents

What you need to know about Assignment of Rents and Leases

Legal Expertise and Document Drafting

Lawyers play a pivotal role in drafting comprehensive and legally sound assignment agreements. Their deep understanding of Alberta’s real estate law and legal frameworks ensures that the terms are clear, enforceable, and comply with relevant regulations. 

Dispute Resolution and Advocacy

In cases of disputes, lawyers serve as advocates, representing the interests of their clients. They employ negotiation skills to facilitate resolutions and, when necessary, escalate matters to litigation to seek a fair outcome.

Legal Compliance and Risk Management

Lawyers ensure legal compliance and proactively manage risks associated with the assignment. They stay updated on legal changes, identify potential pitfalls, and guide clients in making informed decisions to avoid legal complications.

Customization of Agreements

Recognizing the uniqueness of each assignment, lawyers tailor their services to the specific needs, property characteristics, and preferences of the parties involved. This customization ensures that the assignment of rent agreement aligns with the context of the transaction.

Land Titles and Regulatory Compliance

Lawyers also ensure that the assignment of rents complies with Alberta’s Land Titles Act , overseeing proper registration of the land titles. This step is crucial for transparency, legal clarity, and enforceability of the agreement.

Recording Interests and Due Diligence

Lawyers navigate the process of recording interests, ensuring that assignments of rents are properly registered in the land titles. This not only serves as public notice but also aids in due diligence for buyers and mortgagors, allowing them to make informed decisions in their real estate transactions.

Navigating the real estate landscape can be tricky. Making the right decisions can have a significant financial impact when purchasing or selling a property. If you would like help with your assignment of rents matter, or if you are unsure whether assignment of rents is in your best interest, contact DLegal today.

Our experienced real estate lawyers know the ins and outs of Alberta real estate law . They will provide legal advice and guidance on any assignment of rents matters or other real estate matters.

The DLegal team is here to support. We will do our best to assist or connect you with those who can help.

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Assignment of Leases and Rents: Absolutely Collateral

In his Financing column, Jeffrey Steiner warns mortgage lenders not to not rely on assignments of leases and rents, whether as a clause in the mortgage or as a separate agreement, to protect their interests in the income from their collateral prior to the appointment of a receiver or the final sale of the property at foreclosure. Instead, he concludes, "lenders should account for risks by taking other legal measures which grant them greater control and give them enforceable rights immediately upon default."

March 20, 2018 at 01:37 PM

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Generally speaking, rents comprise the principal income derived from commercial real property ownership prior to the sale of the property. In traditional, non-recourse lending, where the special purpose entity borrower may become insolvent, lenders rely on the rent and related income from the property as security for the loan.

One mechanism employed by commercial mortgage lenders to secure their interest in the rental stream is to require in the mortgage document an assignment of leases and rents pursuant to which the borrower ‘presently and absolutely’ assigns to the lender the rents from the real property. In turn, the lender grants the borrower a license, revocable upon an event of default, to collect and use the rents.

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Assignment of leases and rents: absolutely collateral.

[caption id="attachment_25168" align="aligncenter" width="616"]

Jeffrey B. Steiner[/caption] Generally speaking, rents comprise the principal income derived from commercial real property ownership prior to the sale of the property. In traditional, non-recourse lending, where the special purpose entity borrower may become insolvent, lenders rely on the rent and related income from the property as security for the loan. One mechanism employed by commercial mortgage lenders to secure their interest in the rental stream is to require in the mortgage document an assignment of leases and rents pursuant to which the borrower ‘presently and absolutely’ assigns to the lender the rents from the real property. In turn, the lender grants the borrower a license, revocable upon an event of default, to collect and use the rents. Lenders have elected to include the language purporting to affect a “present” and “absolute” transfer with the hope of achieving the benefits of an “absolute” assignment of the rents over a “collateral” assignment. If the assignment is deemed to be an “absolute” transfer of legal title of the rents from the borrower to the lender, then such assignment would become enforceable immediately upon an event of default and revocation of borrower’s license to collect and use the rents—meaning, that the lender would have the right and ability to collect the rents directly from the tenants as soon as an event of default has occurred. By contrast, if the assignment is considered “collateral,” the lender runs the risk that, following an event of default and a resulting borrower bankruptcy, the rents will be deemed property of the bankruptcy estate, subject to a bankruptcy plan and protected by the Bankruptcy Code’s automatic stay. Case Law New York case law surrounding the treatment of assignments of leases and rents, whether by “absolute” or “collateral” assignment nominally suggests that judges will give effect to the intended purpose of these assignments, ignoring such “absolute” assignment language and interpreting the assignment as a “collateral” one for the mortgage loan. For this reason, a majority of New York state courts have ruled that lenders cannot create an absolute assignment of leases and rents in a mortgage transaction regardless of the language used. In Dream Team Assocs. v. Broadway City , 2003 N.Y. Slip Op 50894U, 2003 WL 21203342 (N.Y.Civ.Ct. May 7, 2003), for instance, the court addressed the question of whether an assignment of rents constitutes an absolute assignment and ruled that “[u]nder New York law…the language used in the assignment instrument itself is not determinative of what rights are actually transferred.” Relying on the fact that New York is a “lien theory” state rather than a “title theory” state, state courts typically hold that an assignment of leases and rents, regardless of the wording of the provision or form taken, will not be a present assignment when given as security for the loan. It follows then that, if assignments of rents do not serve to transfer immediate title to the rents, they instead transfer equitable title and constitute a pledge of the rents to which the lender cannot become entitled until taking some extra, affirmative enforcement steps. In In re Soho 25 Retail , No. ADV. 11-1286-SHL, 2011 WL 1333084, at *6–8 (Bankr. S.D.N.Y. March 31, 2011), the court sought to summarize certain potential steps to enforcement as follows: “requesting the appointment of a receiver to collect the rents, demanding or taking possession [of the property], commencing foreclosure proceedings, or seeking an order for the sequestration of rents.” These additional, affirmative steps do not seem onerous at first glance. However, as any mortgage lender will attest, the foreclosure process in New York State is slow. Furthermore, mortgage lenders are properly advised to avoid the exercise of any such rights prior to an appointment of a receiver or the consummation of foreclosure for fear of being found to be a mortgagee in possession, which could cause lenders to be deemed to have assumed all of the same duties and liabilities of the owner of the property. The rule was recently restated by the court in Allen v. Echeverria , 11 N.Y.S.3d 170, 173 (N.Y. App. Div. 2015), that is, a mortgagee who takes possession of the property mortgaged as collateral is “bound to employ the same care and supervision over the mortgaged premises that a reasonably prudent owner would exercise in relation to his own property; he is bound to make reasonable and needed repairs, and is responsible for any loss or damage occasioned by his willful default or gross neglect in this regard.” Most commercial mortgage lenders are not in the business of managing properties and do not want to be subject to the liability that could arise during such management, especially when the title to the property remains vested in an adverse party, i.e., its defaulted borrower. In light of the bankruptcy risks and the potential that an assignment of rents will not be deemed an absolute assignment, vigilant lenders will avail themselves of alternative mechanisms to exert control over the rents, namely, (i) cash management arrangements and (ii) guaranties that provide for liability in the event of a misappropriation of the rents. Through “lockbox” arrangements between the lender, the borrower and third-party banks, lenders will control the rents deposited by tenants directly into such lender-controlled clearing accounts. The rents will then be distributed according to the terms agreed upon by the parties at closing or otherwise at the direction of the lender in order to pay debt service and to accumulate reserves for the payment of property taxes and insurance. Borrowers will typically have no right to access these funds and, in all cases following an event of default, the banks will be prohibited from following any instructions received from borrowers. For loans in which lenders perceive greater risk, they can structure cash management to exercise greater control of the rents and to make less funds available to the borrower, decreasing the risk that rents will be misused. Additionally, loan documents always provide that, during an event of default, the rents deposited into the cash management accounts will be deemed to be additional collateral for the loan and may be applied by the lender to pay down the debt in lender’s sole discretion. Lenders may also protect against the misuse of rents by including a carve-out to the non-recourse nature of the mortgage loan in a guaranty executed by a borrower-affiliated person or entity. In such a guaranty, the guarantor will be liable to the lender to the extent of any loss suffered by the lender due to the misapplication or misappropriation of rents by the borrower or its affiliates.

Mortgage lenders should not rely on assignments of leases and rents, whether as a clause in the mortgage or as a separate agreement, to protect their interests in the income from their collateral prior to the appointment of a receiver or the final sale of the property at foreclosure. The enforcement of these agreements may take considerable time and money before the lender even gains a legal right to collect rents. Lenders should account for these risks by taking other legal measures which grant them greater control and actually give them enforceable rights immediately upon default. Jeffrey B. Steiner is a member of DLA Piper. Shane Goodhue, a law clerk (assoc.) at the firm, assisted in the preparation of this article.

A banker asked us: General vs specific assignments of rents and leases in Ontario

Q: What is the difference between a general assignment of rents and leases and a specific assignment of rents and leases, and when should I include them in my term sheet for a commercial real estate financing of an Ontario property?

A: In situations where a borrower owns real property in Ontario that either is or will be leased to third party tenants, a lender should consider obtaining either a general assignment of rents and leases or a specific assignment of rents and leases in addition to a mortgage on the secured property. Like a mortgage, an assignment of rents and leases should be registered against title to the subject property, and in addition, should be registered under the applicable personal property security legislation as the rents and leases that are being secured by the assignment fall within the definition of personal property under that legislation. [1]

An assignment of rents and leases, be it a general assignment of rents and leases or a specific assignment of rents and leases, provides a lender with two principal benefits which may be realized by the lender after an event of default:

• it permits the lender to receive the rent payments that the borrower/landlord would otherwise be entitled to, and this revenue stream from the tenants is a significant asset that should be secured; and,
• it permits the lender to step into the shoes of the borrower/landlord and exercise all of the rights and remedies available to the landlord to ensure that the full benefit and value of the lease is realized by the lender, which includes for example, the right to demand payment in the event of non-payment of rent by a tenant and to assign the lease to a purchaser in the event of a power of sale proceeding.

The only difference between a general assignment of rents and leases and a specific assignment of rents and leases is the revenue streams and leases to which they apply. A general assignment of rents and leases applies to all present and future rental income and leases in respect of a particular property. Once in place, a general assignment of rents and leases gives the lender a right to the rental income and the ability to exercise all of the rights of the landlord under a lease in respect of all leases of the property, including but not limited to any new leases, subleases or assignments of lease entered into after the assignment is granted and registered. In contrast to this, a specific assignment of rents and leases only applies to leases which are specifically listed in the document. In the event that any of the specifically listed leases expire or are terminated, and/or a new lease or sublease is put in place, the specific assignment of leases will not apply to this new lease or sublease and the lender will have no right to the rental income or rights resulting from the new lease or sublease.

In most lending situations, the lender will prefer a general assignment of rents and leases as it provides the most comprehensive security. The lender will have security over all rental income, and be able to exercise the rights of the landlord, regardless of who the tenants are in the future, or what leases the borrower has in place at the time of default under the terms of the loan or credit facility. However, where there is a principal or anchor tenant that represents a preponderance of the rental income, and/or the borrower objects to a general assignment of rents and leases securing all rents and leases as too broad a security interest, the lender may only be interested in securing the rental income and landlord rights associated with a specific principal or anchor lease, or a particular group of leases. In such a situation, a specific assignment of rents and leases may be a reasonable compromise position for a lender to adopt. Alternatively, in situations where multiple lenders are taking security in a particular parcel of real property, specific assignments of rents and leases allow the various lenders to divide the rental income and leases among themselves, with each lender only obtaining security in a specifically agreed upon lease or group of leases.

The above is a general overview of general and specific assignments of rents and leases. The professionals in Gowling WLG (Canada) LLP’s financial services practice group would be pleased to discuss your lending and real property security needs in greater detail, and help you chose the security documents most appropriate for your lending needs.

[1] Some financial institutions have chosen to incorporate into their Standard Charge Terms for their mortgages various provisions that serve as a general assignment of rents, and they do not register a separate general assignment of rents as a result.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.

Assignment of Leases and Rents (Commercial Real Estate Loan) (Pro-Lender) (NJ) | Practical Law

Assignment of Leases and Rents (Commercial Real Estate Loan) (Pro-Lender) (NJ)

Practical law standard document w-029-4459  (approx. 25 pages).

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Will be travelling to Samara in June but I will arrive at Ulyanovsk Baratayevka Airport. Need a transfer to Samara but I´m getting trouble to book as all websites are in russian. Any suggestion? I would like to have my transfer arranged in advance rather than having to do it at the airport.

Use chrome's translation feature. Book train inadvance at RZD

The RZD website is in English, there are trains from Ulyanovsk to Samara, for example see: https://bit.ly/2IQFjpr

Buses from UIyanovsk also exist, the ticketing website https://www.biletbezbed.ru seems a bit... complicated. But I don't think it will be a problem to get a ticket to one of the buses right at the bus station.

Samara is 250km away from Ulyanovsk, so taxi would be extremely expensive, no less than 4000₽.

Thank you for both responses. Problem is I do arrive on sunday 24th June and on sundays there seem to be no train linking these cities. In addition, I travel with a 2 year daughter and would prefer not having a 6 hour journey to get to Samara. Any recommendation of private transportation such as remise, taxi, etc?

Thanks very much,

Download yandex taxi apps (it’s like uber) but note that price can multiple 2 or 3 times due to high demand

It’s the most useful way

And make sure that driver has child seat

Thank you. I'll try that app.

There are local transfer companies in Ulyanovsk as well, you might try arrange it in advance, see http://auto-ulyanovsk.ru/transfer.html for example. Try emailing them, or maybe they use WhatsApp on some of their phones.

This topic has been closed to new posts due to inactivity.

• Transfer from Ulyanovsk to Samara May 29, 2018
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