In this form, the lessee is in default and lessor has brought an eviction action against lessee. Pursuant to two cash payments, lessor agrees to release lessee (with some exceptions) from the lease, covenants not to sue for monetary damages, and drop the eviction action.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
A California Forbearance Agreement — With Release Provision is a legal contract typically utilized in situations where the borrower is experiencing financial hardship and is unable to meet their mortgage payments. This agreement allows the lender to temporarily suspend the borrower's obligation to repay the loan or reduce the payment amount for a specified period. It aims to provide the borrower with temporary relief while they work towards stabilizing their financial situation. The Forbearance Agreement includes a Release Provision which releases the lender from any future claims or liability related to the loan. This provision ensures that once the borrower fulfills their obligations under the agreement, they cannot challenge the lender or seek further remedies regarding the loan, such as claims of predatory lending or other legal disputes. There are different types of California Forbearance Agreements — With Release Provision, each tailored to suit specific circumstances or preferences. Some common variations include: 1. Lump Sum Forbearance Agreement: Under this type of agreement, the borrower agrees to make a lump sum payment at the end of the forbearance period, usually from accumulated savings or through alternative funding sources. This type provides a clear end date for the forbearance period and helps the borrower plan for repayment. 2. Fixed Payment Forbearance Agreement: Here, the borrower and lender agree on a reduced payment amount that is fixed for the duration of the forbearance period. This option best suits borrowers who have a stable income but require temporary relief due to unforeseen circumstances, such as a medical emergency or job loss. 3. Graduated Payment Forbearance Agreement: In this arrangement, the borrower's payments gradually increase over the forbearance period. It is suitable for borrowers who anticipate a gradual recovery in their financial situation, allowing them to ease back into full payment obligations. 4. Extending Loan Term Forbearance Agreement: This type of agreement extends the loan term, usually by adding the forbearance period to the end of the loan. It provides borrowers with immediate relief while ensuring that no additional payments or lump sums are due until the loan's original term is completed. In all types of California Forbearance Agreements — With Release Provision, it is crucial for both parties to clearly define the terms and conditions, including the duration of forbearance, payment modifications, interest accrual, and other specific provisions. This helps protect the interests of the borrower and lender while establishing a framework for a successful resolution to the borrower's financial challenges.
