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.
Puerto Rico Fee Mortgage Provisions from a Ground Lease are terms and conditions set forth in a contract between a property owner (lessor) and a lessee regarding the ownership and financing rights of the property. This type of provision is specific to properties situated on leased land in Puerto Rico. Ground leases in Puerto Rico provide individuals and businesses with the opportunity to rent land for an extended period, typically ranging from 20 to 99 years. During this lease term, the lessee holds the rights to use and develop the property, often for commercial or residential purposes. However, it is important to note that the underlying land remains the property of the lessor. The fee mortgage provision within a ground lease allows the lessee to secure financing using the leasehold interest—the rights granted by the ground lease—as collateral. In other words, the lessee can obtain a mortgage loan using their leasehold interest as security for repayment. This provision provides an additional layer of financial flexibility for lessees, enabling them to access funds for property improvements, expansion, or other business needs. There are several types of fee mortgage provisions that may be associated with a ground lease in Puerto Rico, including: 1. Absolute Assignment of Lease: This provision allows the lessee to transfer their leasehold interest to a lender as collateral for a mortgage loan. In case of default, the lender can assume the leasehold interest. 2. Subordination Agreement: In this provision, the lessee agrees to subordinate their leasehold interest to the rights of the lender in case of default. It ensures that the lender's mortgage takes precedence over the leasehold interest. 3. Non-Disturbance Agreement: This provision ensures that if the ground lease is terminated due to the lessor's default, the lender's rights under the fee mortgage will remain unaffected. It protects the interests of the lender in case of any lease-related issues. 4. Estoppel Certificate: This provision entails the lessee providing a certificate confirming the status of the ground lease to potential lenders. It ensures that all parties involved are aware of the terms and conditions of the lease and the associated fee mortgage provisions. In summary, Puerto Rico Fee Mortgage Provisions from a Ground Lease outline the terms by which a lessee can use their leasehold interest as collateral for mortgage financing. These provisions offer a means for lessees to access capital for property-related investments, while also protecting the interests of lenders. The different types of provisions, such as absolute assignment of lease, subordination agreement, non-disturbance agreement, and estoppel certificates, serve to clarify the rights and responsibilities of all parties involved in the ground lease and mortgage agreement.
