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.
North Carolina Fee Mortgage Provisions from a Ground Lease: Understanding the Key Details In North Carolina, when dealing with a ground lease structure, it is crucial to understand the fee mortgage provisions associated with it. A ground lease refers to a type of lease agreement where a lessee (tenant) occupies and develops a property owned by the lessor (landowner). This article aims to provide a detailed description of North Carolina's fee mortgage provisions from a ground lease, highlighting the key points and relevant keywords to enhance comprehension. 1. North Carolina Ground Lease: A ground lease in North Carolina typically involves a long-term lease agreement, often ranging from 50 to 99 years, where the tenant constructs and operates buildings on the leased land. Unlike a traditional lease, a ground lease grants the tenant substantial property rights and allows for development and use of the land as per agreed terms. 2. Fee Mortgage: A fee mortgage, commonly known as a fee simple mortgage or fee ownership, represents absolute ownership of a property. In a ground lease scenario, the fee mortgage is when the ground lessor (landowner) grants a mortgage on their ownership interest. The fee mortgage holder usually has the right to foreclose on the leasehold estate in case of tenant default. 3. Fee Mortgage Provisions: The fee mortgage provisions in a North Carolina ground lease outline the rights and responsibilities of the tenant, ground lessor, and fee mortgage holder. These provisions aim to safeguard the interests of all parties involved in the lease agreement. Key keyword terms relevant to fee mortgage provisions include: a) Subordination: Subordination clauses specify that the ground lease and fee mortgage are distinct and separate interests. The fee mortgage is typically subordinated to the ground lease, meaning that the rights of the ground lessee take precedence over the fee mortgage holder's rights. b) Non-Disturbance: Non-disturbance clauses ensure that if the fee mortgage holder forecloses on the leasehold estate due to tenant default, the new fee owner will respect the terms of the existing ground lease. This provision offers protection to the tenant, allowing them to continue operating under the lease agreement even if there is a change in fee ownership. c) Attornment: Attornment refers to the agreement by the tenant to recognize a new fee owner as their landlord in case of foreclosure. This provision ensures the continuity of the lease, binding the tenant to any successor-in-interest of the fee mortgage holder. d) Estoppel Certificate: An estoppel certificate is a document issued by the tenant, confirming the key details of the ground lease, including rent, lease term, and any amendments made. It is often required by fee mortgage holders during refinancing or sale of the fee ownership interest to ensure accurate representation of lease terms. 4. Different Types of North Carolina Fee Mortgage Provisions from a Ground Lease: While the key fee mortgage provisions mentioned above are typically included in most North Carolina ground leases, it is essential to note that the specific provisions can vary depending on the negotiated terms and parties involved. Each agreement may have unique provisions tailored to address specific circumstances. In conclusion, North Carolina's fee mortgage provisions in a ground lease play a critical role in defining the rights and obligations of the tenant, ground lessor, and fee mortgage holder. Understanding terms such as subordination, non-disturbance, attornment, and the importance of an estoppel certificate is essential for all parties involved in a ground lease transaction. Remember to seek legal advice and consult lease professionals to ensure all relevant provisions are included and protect your interests appropriately.
