What is an example of subordination in real estate?

Here's an example of how subordination clauses in mortgage notes work for a better understanding: John decides to buy a house. John's bank agrees to lend him the money to purchase a home on the condition that they take repayment priority. John's bank uses a subordination clause to secure its rights.

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Surface Tenant's Subordination to An Oil and Gas Lease

Bexar Texas Surface Tenant's Subordination to An Oil and Gas Lease

Name: Bexar Texas Surface Tenant's Subordination to An Oil and Gas Lease
Brand: US Legal Forms
Rating: 4.83 (251 reviews)

Category:

Oil Gas and Minerals - Subordination

State:

Multi-State

County:

Bexar

Control #:

US-OG-143

Format:

Instant download

Description

If an oil and gas lease has been granted on lands in which there is a surface tenant, it may be necessary or advisable to obtain a subordination of the agreement or lease with the surface tenant, to the oil and gas lease. This form provides for that subordination and directs the manner in which compensation for any damages shall be paid.

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How to fill out Bexar Texas Surface Tenant's Subordination To An Oil And Gas Lease?

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Subordination is putting something in a lower position or rank. Therefore, a subordination agreement puts the lease below the mortgage loan in priority. Mortgage lenders want the leases to be subordinate to the mortgage. That way, the mortgage loan is paid first if there is a foreclosure.

A subordination agreement prioritizes collateralized debts, ranking one behind another for purposes of collecting repayment from a debtor in the event of foreclosure or bankruptcy. A second-in-line creditor collects only when and if the priority creditor has been fully paid.

Put simply, a subordination agreement is a legal agreement which establishes one debt as ranking behind another debt in the priority for collecting repayment from a debtor.

We briefly discuss three types of agreements below. An executory subordination agreement is an agreement under which the subordinating party, like the seller of land, agrees to execute a subsequent instrument subordinating his or her security interest to another security interest, like the lien of a construction loan.

Despite its technical-sounding name, the subordination agreement has one simple purpose. It assigns your new mortgage to first lien position, making it possible to refinance with a home equity loan or line of credit. Signing your agreement is a positive step forward in your refinancing journey.

A subordination clause is a lease provision whereby the tenant subordinates its possessory interest in the leased premises to a third-party lender, usually a bank (the rights of the tenant are thus subject to the rights of the lender).

Here's an example of how subordination clauses in mortgage notes work for a better understanding: John decides to buy a house. John's bank agrees to lend him the money to purchase a home on the condition that they take repayment priority. John's bank uses a subordination clause to secure its rights.

When you take out a mortgage loan, the lender will likely include a subordination clause. Within this clause, the lender essentially states that their lien will take precedence over any other liens placed on the house. A subordination clause serves to protect the lender in case you default.

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And renewal efforts while missing out on potential replacement tenants if the current tenant is unable to complete the offered lease renewal. Berry, Jr., as lessee, dated May.19, 1951, recorded in Volume 369, Page 288, Deed Records of Bexar County, Texas. f. The clause also requires the tenant to continue paying rent to the new landlord for the remainder of the lease term. Emergency preparedness and the identification of critical public utilities facilities, including in the natural gas supply chain and electric utilities.

The clause, if ineffectiveness or delays in construction or equipment availability, is a factor that may be taken into consideration in considering whether to renew the lease term. [4] The city also had issues with whether the clause violated the state and federal Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, or the Civil Rights Act of 1963, Title II, and the Civil Rights Commission Rules of Practice and Procedure. As presented, the city has stated that the city had no choice but to refuse any extensions of the current lease. The city contended if the state, the federal, or the City could agree to modify the provision, the city could accept the modification or would simply continue with an agreement requiring the tenant to pay the full rent. [5] This litigation is the first known trial on a statutory provision that regulates the number of renewal periods with a tenant. [6] If there is any ambiguity in language, the city did not seek to resolve it.

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Bexar Texas Surface Tenant's Subordination to An Oil and Gas Lease

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What does it mean for Bexar Surface Tenant to subordinate to an Oil and Gas Lease701827?

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Can Bexar Surface Tenant retain any rights despite subordination?

Are there any benefits for Bexar Surface Tenant in subordinating?

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