Deed of Trust and Assignment of Rents

What is a deed of trust and assignment of rents?

A deed of trust and assignment of rents is a deed of trust with an assignment of rents clause as follows.

• The trustor or the borrower (you) give the beneficiary (lender) the right, power and authority, during the time that the debt has not been paid off in full, to collect rents.
• The beneficiary (lender) is given the right to collect rents during the course of the loan.

What happens to a loan in default under deed of trust and assignment of rents contract?

If the borrower fails to pay, when due, the agreed amount, then the loan is said to be in default under the deed of trust and assignment of rents agreement. When the loan is in default under a deed of trust and assignment of rents agreement, the beneficiary may at any time without notice, foreclose on the borrower and the secured real estate property. The beneficiary can take possession of the real estate property or any part of it.

Under the deed of trust and assignment of rents contract, the beneficiary can collect rents including past due and unpaid amounts. Sometimes, the costs and expenses of operation and collection, including reasonable attorney's fees are added.

What is an assignment of rents?

In a deed of trust and assignment of rents form, the assignment of rents is the part of the document that gives the beneficiary the right to collect rents of the real estate property in case the borrower has defaulted on debt payments.