Commercial real estate mortgage lenders in Ontario require a
comprehensive security package to safeguard their investment. One
critical component of this package is the assignment of leases.
There are two types of lease assignments: a general assignment and
a specific assignment. Understanding the distinction between these
and the unique advantages of a specific assignment of a commercial
lease is essential for lenders.
What is a Specific Assignment of a Commercial
Lease?
A specific assignment of a commercial lease is a legal agreement
in which a borrower (the landlord) transfers its rights to a
particular commercial lease or leases to the lender as collateral
for a loan. This assignment gives the lender the right to collect
rents directly from the tenant(s) in the event of the
borrower's default. It is distinct from a general assignment
of leases, which assigns all current and future leases related to
the property.
