Legal Question in Real Estate Law in California

California Deed of Trust (commerical loan to owner of commercial property))

What is the purpose of the following provision? Is it necessary?

Lease. Trustee hereby leases the Mortgaged Property to Grantor until a sale shall be made pursuant to the foreclosure provisions contained in paragraph 19, upon the following terms and conditions:

Grantor and all persons claiming or possessing the Mortgaged Property by, through or under Grantor shall pay rents therefor during said term at the rate of one-cent ($.01) per month, payable monthly upon demand, until this Deed of Trust is in default as provided in subparagraph 19(a), whereupon possession of the Mortgaged Property shall be delivered to Trustee or his successor or assignee or to the purchaser at the Trustee's sale under this Deed of Trust.


Asked on 8/08/08, 4:42 pm

1 Answer from Attorneys
Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

Re: California Deed of Trust (commerical loan to owner of commercial property))

My best guess is that the purpose of the clause is to prevent the buyer from someday attempting to claim title to the property by adverse possession (because a tenant cannot possess real property adversely to a landlord).

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Answered on 8/08/08, 5:04 pm


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