Can I charge a Mortgagor rent for Default if this is stipulated in a 1992 NY State Note and Mortgage, recently renegotiated?

Asked over 1 year ago - Ellenville, NY

Mortgagor is consistently 30+ days late in payments for several months. The original Note and Mortage reads: "If there is a Default under this Note and Mortgage, Mortgagor must pay monthly in advance to Mortgagee, or to a receiver who may be appointed to take control of the Property, the fair rental for the use and occupancy of the part of the Property that is in the possession of the Mortgagor. If Mortgagor does not pay the rent when due, Mortgagor will vacate and surrender the Property to Mortgagee or to the receiver. Mortgagee may evict Mortgaor by summary proceedings or other court proceedings." The original Note and Mortgage was amended because Mortgagor had not paid in years, but all the original clauses still apply.

Attorney answers (2)

  1. Richard J. Chertock

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    Contributor Level 17

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    Answered . I would have to review all the documentation regarding this, however, it sounds as if it would be contrary to law and therefore unenforceable. You can not charge rent to a mortgagor because he is the owner of the land. What you are describing would be on the order of a strict foreclosure where if the mortgagor failed to pay you would automatically repossess the property and strict foreclosures are forbidden under NY law. You could charge late fees and have default provisions which would increase the interest rate as a penalty but rent would not be applicable. You need to have an attorney evaluate your documents and probably commence a foreclosure action.

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  2. Marco Caviglia

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    Contributor Level 19

    Answered . The mortgage instruments will recite what your remedies are for late payments. You cannot impose additional ones unless they are statutorily provided despite the language.

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