New Mexico Assignment of Leases and Rents as Collateral Security for a Commercial Loan

• Category: Loans and Lending - Assignments
• State: Multi-State
• Control #: US-1156BG
• Format: Word; Rich Text

Description

This is a blanket assignment of all present and future leases and rents. It purports to be an absolute assignment rather than a collateral assignment. Some attorneys believe that this type of assignment gives the Lender some advantages if the borrower files for bankruptcy. The Assignor is, in effect, given a "license" to collect the rents so long as there is no default. Even though the leases and rents are normally assigned in the deed of trust, lenders seem to feel more comfortable with a separate assignment. New Mexico Assignment of Leases and Rents as Collateral Security for a Commercial Loan involves a legal agreement between a lender and a borrower, where the borrower assigns their leases and rental income from a commercial property as collateral to secure a loan. This type of arrangement ensures that the lender has a form of protection in case the borrower defaults on the loan. In New Mexico, there are different types of Assignment of Leases and Rents as Collateral Security for a Commercial Loan, which include: 1. Absolute Assignment: This type of assignment provides the lender with full control over the leases and rental income. The borrower assigns all rights, title, and interest in the leases and rents to the lender. In case of default, the lender can collect the rental income directly from the tenants or manage the property until the outstanding debt is repaid. 2. Conditional Assignment: In a conditional assignment, the lender gains control over the lease and rental income only if the borrower defaults on the loan. Until then, the borrower retains their rights and responsibilities as the property owner. 3. Floating Assignment: With a floating assignment, the lender has a security interest in the leases and rental income but does not gain control unless the borrower defaults. This type of assignment allows the borrower to continue managing the property and collecting rent until a default occurs. 4. Non-Recourse Assignment: In a non-recourse assignment, the lender's recourse is limited to the collateral itself. If the borrower defaults, the lender can only recover the outstanding loan balance through the assigned leases and rental income, but not from the borrower's personal assets. 5. Partial Assignment: In some cases, a borrower may choose to assign a portion of their lease agreements and rental income as collateral instead of the entire amount. This may be done to secure a smaller loan amount or to retain some control over the property's income. When entering into a New Mexico Assignment of Leases and Rents as Collateral Security for a Commercial Loan, both the lender and borrower should ensure that the agreement is properly drafted and legally binding. It is advisable for them to seek legal counsel to understand their rights, obligations, and potential liabilities associated with this type of arrangement.

New Mexico Assignment of Leases and Rents as Collateral Security for a Commercial Loan involves a legal agreement between a lender and a borrower, where the borrower assigns their leases and rental income from a commercial property as collateral to secure a loan. This type of arrangement ensures that the lender has a form of protection in case the borrower defaults on the loan. In New Mexico, there are different types of Assignment of Leases and Rents as Collateral Security for a Commercial Loan, which include: 1. Absolute Assignment: This type of assignment provides the lender with full control over the leases and rental income. The borrower assigns all rights, title, and interest in the leases and rents to the lender. In case of default, the lender can collect the rental income directly from the tenants or manage the property until the outstanding debt is repaid. 2. Conditional Assignment: In a conditional assignment, the lender gains control over the lease and rental income only if the borrower defaults on the loan. Until then, the borrower retains their rights and responsibilities as the property owner. 3. Floating Assignment: With a floating assignment, the lender has a security interest in the leases and rental income but does not gain control unless the borrower defaults. This type of assignment allows the borrower to continue managing the property and collecting rent until a default occurs. 4. Non-Recourse Assignment: In a non-recourse assignment, the lender's recourse is limited to the collateral itself. If the borrower defaults, the lender can only recover the outstanding loan balance through the assigned leases and rental income, but not from the borrower's personal assets. 5. Partial Assignment: In some cases, a borrower may choose to assign a portion of their lease agreements and rental income as collateral instead of the entire amount. This may be done to secure a smaller loan amount or to retain some control over the property's income. When entering into a New Mexico Assignment of Leases and Rents as Collateral Security for a Commercial Loan, both the lender and borrower should ensure that the agreement is properly drafted and legally binding. It is advisable for them to seek legal counsel to understand their rights, obligations, and potential liabilities associated with this type of arrangement.