People apply for loans to obtain an opportunity and a chance in either living a longtime dream or sustaining the financial needs of an organization. Although there are tons of loan options available to be chosen by an interested borrower, most of the provided options demand collateral properties that will provide an assurance to the loan company that they will be paid on time. For people who are not owners of properties, they can choose to whether back out and settle to a lesser loan amount or tap the shoulders of those who own properties that can be listed as a collateral. In the event that the latter option is chosen by a borrower, he must have a negotiation with the land or property owner to construct a subordination agreement contract form to legalize their agreement.
Subordination Agreement Contract Form Sample
Subordination Agreement Contract Form in DOC
What is a Subordination Agreement Contract Form?
A subordination agreement contract form is necessarily used to layout rules and regulations pertaining to a property claim as well as a mortgage. This type of contract is commonly created when there are two mortgages in a single property wherein the parties involved must decide what mortgage will be given a priority than the other. The contract aims to construct and manage an agreement between both parties.
Varieties of Subordination Agreement Contract Forms
Although a subordination agreement contract form is often used in relation to mortgages, there are also other varieties of this document that are also significant to be used and signed if the situation is relative to the purpose of the form. Below are some of the examples of subordination agreement contract form varieties:
1. Easement Subordination Agreement Contract – This type of subordination agreement contract form focuses on retaining the easement to survive an exit or a mortgage foreclosure. It conserves the easement agreement contract that was previously signed by the property owner and other involved parties. Specifically, this form can be used for utility and flood easement intentions as well as other purposes related to properties that have been listed under easement agreements.
2. Landlord Subordination Agreement Contract Form – This form must be signed by the landlord of a property that is already in a lien, his tenant, and the representative of the tenant’s lender or loan provider. Using this document allows the landlord to enlist the obligations and the limitations of the tenant when he names the landlord’s property as a collateral for a loan. Additionally, the landlord must ensure that his property and he himself will be protected by the contract once the tenant will be subjected to a loan default for failing to meet his responsibilities and violating the terms and conditions mandated by the loan provider. You may also see contract agreement form templates.
3. Mortgage Security Subordination Agreement Contract Form – Similar to the aforementioned landlord subordination agreement contract form, this document is created for individuals who will use a property for two collaterals for different loans. With a mortgage security subordination agreement contract, the mortgage and loan provider will be able to document what they will require the borrower to fulfill within the period of the mortgage and what will be the penalties for failure in complying.
Flood Easement Subordination Agreement Contract in DOC
Landlord Subordination Agreement Contract Form
Documents to Accompany a Subordination Agreement Contract Form
Subordination agreement contract forms must be accompanied by other legal forms in order to document and prove that a property is owned and indeed authorized by the owner to be a collateral of a loan. Some of the documents that can be used and enclosed with a subordination agreement contract are as follows:
- Landlord’s waiver form – This document is significant for informing the loan borrower that the landlord waives his rights in interfering with the sale of the collateral if a default will be mandated.
- Landlord’s consent agreement contract – This is a document that will serve as an evidence that a landlord granted an approval to the loan borrower in having his property named as a loan collateral. The consent agreement must indicate the terms and conditions that will be observed and followed by the borrower in the duration or period of the loan in order to protect and secure the landlord’s property.
- Financial statement of the borrower – This type of form is needed to determine what the borrower chooses for the terms of payment of his loan along with proving his qualification in providing the payments on time.
The aforementioned documents are just some of the forms that one can include when submitting a subordination agreement contract to the authorized representative of a lending company. Nevertheless, all of the forms must be based on actual facts and be updated whenever there are changes with regards to the property’s description and the preferences or choices of the landlord. You may also see loan agreement templates.
Sample Mortgage Security Subordination Agreement Contract Form
Utility Subordination Agreement Contract Form in DOC
Benefits of Using Subordination Agreement Contract Forms
There are tons of benefits that a landlord or a property owner and a loan borrower can acquire if they will construct and use a subordination agreement contract form. The most common among the known benefits is that it documents the understanding and the agreement of both parties. This ensures that naming the property as a collateral was properly approved and legally permitted by the property owner. You may also see sample shareholder agreement forms.
Claiming advantages and rights will also be easier since these can also be included in the contract, which can be a proof to the court that the owner and the borrower have integrated and acknowledged the rights stated on the form. You may also see loan agreement form examples.
Another benefit is that it will distinguish how each party will be notified of updates about the loan and the status of the property. Most subordination agreement contract forms highlight the need of both parties, and the court, to send notice forms through the parties’ electronic mailing addresses, residential addresses, and a notification to be sent through a phone call. You may also see loan contract forms.
Lastly, the form will also be a guide for both parties to know what they must do in order to achieve a successful transaction and promote an efficient agreement as well as a formal relationship between one another. The roles and the obligations of both parties must be fulfilled and met during the period of the loan or the duration of when the property is held as a collateral by the loan providers. You may also see loan agreement form samples.
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