In one sentence
A loan document assigning the property's leases and rental income to the lender as additional security.
The longer version
This assignment gives the lender rights to the property's rents, exercisable on default, as collateral beyond the mortgage itself. It is standard on income-property loans and often recorded.
The assignment interacts with tenant leases, SNDAs, and any lockbox or cash management structure, making it a connected piece of the collateral package.
Common questions
- What is an assignment of leases and rents?
- A loan document assigning the property's leases and rental income to the lender as additional security, usually with a license back to the borrower to collect rents until default.
- What does the assignment let the lender do after default?
- Revoke the borrower's license, notify tenants to pay rent to the lender, and collect rents directly, often before a foreclosure is complete.
- Is the assignment of leases and rents recorded?
- Yes, typically recorded in the county land records, either as a separate document or within the mortgage or deed of trust.
Keep reading
- The commercial loan closing checklistWhat goes on the list and who owns each line.
- The due diligence checklist, built to be runChecklists as systems, not documents.
- The commercial loan closing processThe five stages from term sheet to funded.
- Loan closing softwareWhere this item is cleared before funding.