Leasehold Charge/Mortgage

Summary

This precedent is a Leasehold Mortgage/Charge agreement which may be registered on title to a property via a "Notice of Charge of Lease" in Ontario. The leasehold mortgage is using the tenant's benefits and privileges under a lease to provide security on a loan from the Mortgagee. Registering the Charge of Lease "perfects" the notice the lender will want to give against all subsequent lenders and other interests in the lease and underlying land. This precedent contains practical guidance and drafting notes. Leasehold Mortgages are often used by development and management companies which may have ground leases or other types of lease agreements with a landlord, whether institutional or not, under which the tenant earns rents or fees from other subtenants or occupiers of a space. Usually this occurs pursuant to a Ground Lease. The idea of the leasehold mortgage stems from the cash flows which the Tenant (Borrower) may be obtaining under the terms of the Lease. This cashflow can be used ...