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.
Ohio Fee Mortgage Provisions from a Ground Lease — A Comprehensive Overview In the state of Ohio, Fee Mortgage Provisions from a Ground Lease refer to specific clauses and terms that regulate the rights and responsibilities of lenders and borrowers when a property is subject to both a ground lease and a mortgage. This arrangement generally arises when a ground lessee seeks financing for constructing or improving a property on leased land. A ground lease is a long-term lease agreement where the landowner (lessor) allows a tenant (lessee) to occupy and use the land for a specified period. The tenant, in turn, constructs or develops a building or other improvements on the land. However, when a tenant intends to secure a loan against the property they have built on leased land, they need to ensure that the fee mortgage provisions comply with Ohio state regulations. Here are different types of Ohio Fee Mortgage Provisions from a Ground Lease: 1. Subordination of Ground Lease: This provision requires the ground lessor to subordinate their rights to the mortgage lender's rights. It ensures that in the event of default or foreclosure, the mortgage lender has priority over the ground lessor in terms of claim to the property. 2. Attornment: The attornment provision mandates that the ground lessee, in the event of a foreclosure or transfer of the property, recognizes and attorns to the new lender as their landlord. This guarantees the lender's right to collect rent directly from the lessee should the borrower default. 3. Automatic Termination: This provision provides the lender with the ability to terminate the ground lease automatically if the borrower defaults on their mortgage payment obligations. Upon termination, the lender gains control of the land, allowing them to sell or lease it to recover their investment. 4. Non-Disturbance: To protect the borrower's interests, the non-disturbance clause ensures that if the ground lessor defaults on their obligations under the ground lease, the lender will honor and recognize the borrower's rights under the sublease or leasehold agreement. 5. Estoppel Certificates: An estoppel certificate is a document signed by both the ground lessor and ground lessee that confirms the details of the ground lease, including the amount of rent, the terms, and any defaults. This provision is essential for lenders to validate the lease terms before providing financing. Ohio Fee Mortgage Provisions from a Ground Lease are crucial for both lenders and borrowers involved in a ground lease arrangement. Understanding these provisions ensures that lenders have sufficient protection against defaults and foreclosures, while borrowers have clarity and protection of their rights in case of changes in ownership or foreclosure proceedings. Navigating the complexities of Ohio Fee Mortgage Provisions from a Ground Lease requires expert legal advice. It is crucial for all parties involved to consult with attorneys specializing in real estate and lending laws to ensure compliance with Ohio regulations and to protect their respective rights and interests.
