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Assignment Of Leases And Rents Template for United States

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Key Requirements PROMPT example:

Assignment Of Leases And Rents

"Need an Assignment of Leases and Rents for a commercial office building in Texas, securing a $5M loan from First National Bank, with existing tenants to continue rent payments until default. Property is managed by third-party management company."

Document background
The Assignment of Leases and Rents is a crucial document in real estate financing that provides additional security to lenders by granting them rights to rental income and leases associated with a property. It typically accompanies a mortgage or deed of trust and becomes particularly important in default scenarios. The document ensures that if a borrower defaults, the lender can directly collect rents from tenants. This arrangement is governed by state property laws and federal regulations, including bankruptcy provisions, and must be properly recorded to be effective against third parties. The assignment can be absolute or conditional, depending on the jurisdiction and parties' agreement.
Suggested Sections

1. Parties: Identifies the assignor (property owner) and assignee (typically lender)

2. Background/Recitals: States the context, including reference to the loan agreement and property details

3. Definitions: Defines key terms including Property, Leases, Rents, and Security Interest

4. Grant of Assignment: Core section conveying rights to leases and rents

5. Rights and Obligations of Assignor: Outlines what the property owner can/cannot do regarding leases

6. Rights and Remedies of Assignee: Details lender's rights upon default

7. Covenants: Assignor's promises regarding lease management

Optional Sections

1. License to Collect Rents: Permits assignor to collect rents until default

2. Property Manager Provisions: Requirements for property managers when property has third-party management

3. Special Purpose Entity Provisions: Additional requirements for SPE borrowers when borrower is an SPE

Suggested Schedules

1. Property Description: Legal description of the property

2. Existing Leases Schedule: List of all current leases

3. Rent Roll: Current rent roll showing all tenants and rental amounts

4. Form of Tenant Notice: Template notice to inform tenants of the assignment

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Real Estate

Banking

Property Development

Investment

Relevant Teams

Legal

Real Estate

Finance

Operations

Risk Management

Commercial Lending

Property Management

Relevant Roles

Real Estate Attorney

Property Manager

Loan Officer

Real Estate Developer

Asset Manager

Commercial Lending Manager

Risk Manager

Industries

Federal Bankruptcy Code: Ensures enforceability of the assignment in bankruptcy scenarios and compliance with automatic stay provisions

Federal Tax Lien Act: Governs priority of federal tax liens in relation to the assignment of rents and leases

Fair Housing Act: Federal law prohibiting discrimination in housing transactions, relevant when assignment involves residential properties

State Property Laws: State-specific regulations governing real property rights, transfers, and interests

State Landlord-Tenant Laws: State regulations governing the relationship between landlords and tenants, including rights and obligations

State Recording Acts: Requirements for recording real estate documents and determining priority of interests

State Security Interest Laws: Regulations governing the creation and enforcement of security interests in real property

State Foreclosure Laws: Procedures and requirements for foreclosure in case of default, including rights to collect rents

State UCC Provisions: Uniform Commercial Code provisions relating to secured transactions and assignment of rights

Local Recording Requirements: Specific county or municipal requirements for recording assignments and related documents

Local Rent Control Regulations: Municipal or county-specific rent control laws that may affect the assignment of rents

Property Law Principles: Common law principles governing real property rights, interests, and transfers

Contract Law Principles: Common law principles governing formation and enforcement of contracts

REIT Requirements: Special requirements if the property is owned by or transferred to a Real Estate Investment Trust

Mortgage/Deed of Trust Requirements: Requirements related to existing mortgage agreements or deed of trust provisions

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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