Assignment of Leases and Rents

Summary

This precedent is an example of an assignment of leases and rents whereby the Borrower ("Debtor") assigns to the Lender ("Creditor") all of the borrower's rights and interest in all leases and rents derived from leases at the property if the Borrower/Owner/Debtor defaults on the mortgage loan ("Charge"). The assignment of leases and rents will typically be registered on title along with the Charge/Mortgage in subsequent order. This precedent contains practical guidance and drafting notes. As collateral for a loan or mortgage, the lender may ask (or insist) that all revenue to be generated from the land (usually in the form of rents) be assigned to the Lender/Creditor so that if a default happens, the Lender/Creditor can step into the shoes of the landlord and collect the rents to offset the interest and monies due under the loan. This is a throw back to the original concept of a mortgage. A mortgage was essentially like the sale of land in exchange for money without any "interest" ...