Posted by Del-Ohio on December 04, 2003 at 21:21:59:
We have very similar wording with two different banks that are financing multiple properties for us.
even with this language they still can have rents assigned only if you default, as I understand it
Del-Ohio
… Borrower shall receive the Rents until i) Lender has given Borrower notice of default
Assignment of Rents Clause - Posted by Ed S.
Posted by Ed S. on December 02, 2003 at 08:41:28:
Good Morning.
Am refinancing a rental, and one of the riders on the deed of trust includes an absolute assignment of rents. I’m familiar with clauses that provide for the assignment in the event of default, but this one preemptively does so and relegates me to the position of trustee from the get go. Is this a usual procedure? I’ve never done a NOO, I’m more familiar with owner-occupied paperwork.
The clause reads:
“Borrower absolutely and unconditionally assigns and transfers to Lender all the rents and revenues of the Property, regardless of to whom the Rents of the Property are payable. Borrower authorizes Lender to collect the Rents, and agrees that each tenant of the Property shall pay the Rents to Lender. However, Borrower shall receive the Rents until i) Lender has given Borrower notice of default pursuant to Section 22 of the Security Instrument and ii) Lender has given notice to the tenant(s) that the Rents are to be paid to Lender or Lender’s agent. This assignment of Rents constitutes an absolute assignment and not an assignment for additional security only…”
The lender is a large institution.
Thanks in advance.