Ground Lease Reserve Fund Clauses
(Leasehold Mortgage)

Summary

These ground lease reserve fund clauses require a tenant/mortgagor to deposit funds sufficient to cover the rent under the ground lease into a reserve fund held by the leasehold mortgagee. These clauses should be included in a leasehold mortgage or loan agreement to protect the leasehold mortgagee's collateral by allowing the leasehold mortgagee to confirm that the ground rent will be paid under the ground lease. These clauses include practical guidance and drafting notes. For a full listing of key content covering construction, see Commercial Real Estate Acquisition Loan Resource Kit. For a full listing of key content covering acquisition financing, see Junior Associate Real Estate Resource Kit (Acquisition Finance). These clauses are drafted from the perspective of the leasehold mortgagee and cover issues that will usually be required by the leasehold mortgagee to be addressed in the leasehold mortgage. The capitalized terms used in these clauses should be conformed to the defined terms in the relevant leasehold mortgage or loan agreement. For more on ground leases, see Ground Leasing. For a template leasehold mortgage, see [Leasehold] Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Acquisition Loan). For a template loan agreement, see Loan Agreement (Acquisition Financing).