assignment of rents


Also found in: Acronyms.

assignment of rents

Additional collateral usually required by lenders for commercial properties. The lender may wish to take some step short of foreclosure if there is a default. By virtue of the assignment of rents,the lender may exercise its rights to contact all tenants and advise them to pay their rent directly to the lender rather than to the landlord borrower.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Where a commercial loan is in default, it is common practice to exercise the Assignment of Rents Clause by obtaining the appointment of a receiver.
"If you secured your loan with a typical mortgage and assignment of rents, you have a valid security interest in the real estate under either line of cases.
Despite the lender's lien on these rents through its assignment of rents, the borrower was authorized through the plan to use these monies to pay its administrative costs incurred during the bankruptcy, (i.e., attorney's fees); its unsecured creditors; and $100,000 of the debtor's attorney's fees in its pursuit of certain lender liability litigation against another pre-petition lender.
In many cases, he said, lenders learn too late that their counsel recorded only the mortgage and assignment of rents but failed to file the U.C.C.