Assignment of Leases and Rents
(Pro-Lender) (MD)

Summary

This assignment of leases and rents template may be used in a Maryland commercial real estate financing transaction to assign to a lender, as additional security for the loan, the borrower's interests in the leases and rents in the mortgaged property. This template includes practical guidance and drafting notes. An assignment of leases and rents may be contained in the mortgage, but it is often broken out so it can be recorded to memorialize the assignment. Deeds of trust and mortgages are used to secure debt in Maryland, but deeds of trust are the prevailing type. Md. Code Ann., Real Prop. § 7-101. There is no requirement that a trustee be an individual resident or a corporation authorized to do business in Maryland. However, a foreclosure action can only be filed by a natural person, so an individual will need to substitute for a corporate trustee if foreclosure is pursued. See Md. Code Ann., Real Prop. § 7-105(b)(2). This template uses the term mortgage, but it may be modified to suit the specifics of the transaction. This template is drafted from the lender's perspective but includes drafting notes for the borrower. For more information on assignments of leases and rents, see Assignment of Leases and Rents in a Commercial Real Estate Loan Transaction and Assignment of Leases and Rents in a Construction Loan Transaction. See also Powell on Real Property § 37.26[4][b] and Purchase and Sale of Real Property § 36.04[1][b][iii][A]. For information on financing commercial real estate transactions in Maryland, see Commercial Real Estate Financing (MD) and Commercial Real Estate Acquisition Loan Resource Kit.