This office lease form states that the lessor represents to the lessee that the existing fee mortgage is the only mortgage encumbering the land and the demised premises. The lessor agrees to cause the holder of the existing fee mortgage to agree to certain provisions.
Michigan Fee Mortgage Provisions from a Ground Lease: A Comprehensive Overview In Michigan, fee mortgage provisions from a ground lease (also known as a leasehold mortgage) refer to specific terms and conditions governing the relationship between a lender, a borrower, and a ground lease. Ground leases are agreements that allow a tenant (borrower) to use a piece of land, typically for a long-term period, while the landlord retains ownership of the land. This leasehold interest can be used as collateral to secure a mortgage loan. Michigan Fee Mortgage Provisions from a Ground Lease typically include various important aspects that outline the rights and obligations of the parties involved. Here are some key elements commonly found in such provisions: 1. Leasehold Mortgage Clause: This clause specifies that the tenant's leasehold interest serves as collateral for the mortgage loan. It addresses the lender's rights in case of default, foreclosure procedures, and the ability to assume the tenant's position upon default. 2. Non-Disturbance Clause: Designed to protect the tenant in case of foreclosure, this clause ensures that the new owner (the lender) will not disturb the tenant's possession and use of the land as long as the tenant is not in default. This provision provides a vital safeguard for the tenant's rights in case of a change in ownership. 3. Subordination and Attornment: This provision establishes the priority of interests in case of competing claims on the property. It typically states that the leasehold mortgage will be subordinate to any prior mortgages or liens on the property. Additionally, it often requires the tenant to recognize and attorn to the new lender (after foreclosure) as its new landlord. 4. Insurance and Indemnification: These provisions outline the insurance requirements for the tenant, such as liability coverage and property insurance, to protect both the tenant and the lender's interests. It may also address the allocation of responsibility for any property damage, repairs, or other liabilities arising from the tenant's use of the land. 5. Mortgagee's Right to Cure: This provision grants the lender the right to cure certain tenant defaults, such as failure to pay property taxes or maintain insurance coverage. The tenant may be required to reimburse the lender for any expenses incurred during such a cure. It is important to note that specific fee mortgage provisions may vary based on the terms negotiated by the parties involved. Different types of Michigan Fee Mortgage Provisions from a Ground Lease include leasehold mortgages for commercial properties, residential properties, and vacant lands. Each type may have its unique set of provisions tailored to the specific needs and risks associated with the property type. In conclusion, Michigan Fee Mortgage Provisions from a Ground Lease encompass a range of contractual terms aimed at protecting the lender's interests in a leasehold mortgage agreement. These provisions cover issues such as subordination, non-disturbance, insurance, and the lender's rights in case of tenant default. Understanding the details and implications of these provisions is crucial for both borrowers and lenders entering into a leasehold mortgage arrangement.
