Assignment of Leases and Rents in a Commercial Real Estate Loan Transaction

Summary

This practice note discusses the assignment of leases and rents (ALR) in a commercial real estate loan transaction, the basic purpose of which is to grant the lender an assignment of all of the borrower's right, title, and interest in all present and future leases and the rents, and to grant the borrower a revocable license to collect rents and enjoy other rights of a lessor under the leases during the period prior to a default. The note covers various topics related to an assignment of leases and rents, including the borrower's revocable license to collect rent, representations and warranties of the borrower, satisfaction of the borrower's obligations, and ways to document the assignment of leases and rents. See Assignment of Leases and Rents (Acquisition Loan) for a sample template.