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.
Los Angeles California Fee Mortgage Provisions from a Ground Lease refer to specific conditions and stipulations outlined in a contractual agreement between the owner of a parcel of land (lessor) and the party seeking a mortgage to develop or improve the property (lessee). These provisions govern the potential placement of a mortgage lien on the property and its impact on the ground lease, which typically involves a long-term leasehold interest. In Los Angeles, there are several types of fee mortgage provisions commonly utilized in ground lease agreements: 1. Non-Disturbance Clause: A non-disturbance clause aims to protect the lessee's mortgage interest in case the ground lessor defaults on their obligations, such as falling into bankruptcy or failing to meet lease terms. The clause ensures that the lessee's mortgage remains unaffected by lessor actions and grants the lessee continued use of the property even under such circumstances. 2. Subordination Clause: A subordination clause establishes the priority of the ground lessor's interest in the property over the lessee's mortgage. By accepting a subordination clause, the lessee agrees to have their mortgage subordinate to the ground lessor's rights, enabling the lessor to foreclose the property in case of the lessee's default. 3. Estoppel Certificate: An estoppel certificate is often requested by lenders before providing mortgage financing in a ground lease scenario. It verifies the lessee's understanding of lease agreements and confirms that no defaults or claims exist, ensuring the lender that the mortgage will not be negatively affected by any undisclosed circumstances. 4. Attornment Agreement: An attornment agreement is another crucial element in a Los Angeles ground lease mortgage provision. It establishes that in the eventuality of the ground lease's termination, whether through expiration or default, the lessee will recognize and acknowledge the new landlord or beneficiary as the rightful party holding title to the property. These Los Angeles California Fee Mortgage Provisions from a Ground Lease protect the interests of both the lessee and the lender involved in ground lease financing transactions. By providing clarity on the rights and obligations of each party, these provisions create a framework that ensures stability and safeguards the mortgage lender's security interest in the property.Los Angeles California Fee Mortgage Provisions from a Ground Lease refer to specific conditions and stipulations outlined in a contractual agreement between the owner of a parcel of land (lessor) and the party seeking a mortgage to develop or improve the property (lessee). These provisions govern the potential placement of a mortgage lien on the property and its impact on the ground lease, which typically involves a long-term leasehold interest. In Los Angeles, there are several types of fee mortgage provisions commonly utilized in ground lease agreements: 1. Non-Disturbance Clause: A non-disturbance clause aims to protect the lessee's mortgage interest in case the ground lessor defaults on their obligations, such as falling into bankruptcy or failing to meet lease terms. The clause ensures that the lessee's mortgage remains unaffected by lessor actions and grants the lessee continued use of the property even under such circumstances. 2. Subordination Clause: A subordination clause establishes the priority of the ground lessor's interest in the property over the lessee's mortgage. By accepting a subordination clause, the lessee agrees to have their mortgage subordinate to the ground lessor's rights, enabling the lessor to foreclose the property in case of the lessee's default. 3. Estoppel Certificate: An estoppel certificate is often requested by lenders before providing mortgage financing in a ground lease scenario. It verifies the lessee's understanding of lease agreements and confirms that no defaults or claims exist, ensuring the lender that the mortgage will not be negatively affected by any undisclosed circumstances. 4. Attornment Agreement: An attornment agreement is another crucial element in a Los Angeles ground lease mortgage provision. It establishes that in the eventuality of the ground lease's termination, whether through expiration or default, the lessee will recognize and acknowledge the new landlord or beneficiary as the rightful party holding title to the property. These Los Angeles California Fee Mortgage Provisions from a Ground Lease protect the interests of both the lessee and the lender involved in ground lease financing transactions. By providing clarity on the rights and obligations of each party, these provisions create a framework that ensures stability and safeguards the mortgage lender's security interest in the property.
