Posted in Blog  
  on Feb 12, 2014

What is a Landlord Lien Waiver

A landlord lien waiver is a lien on any tenant’s rental property for the utmost satisfaction of property damages or unpaid rent. The landlords are being given a status of preferred creditors in regards to a tenant’s property. As a landlord, you should know about the landlord lien waiver and any other related topics about it.

When You Need a Lien Waiver

There are some tenants that need outside financing to run their own business. A lot of lenders are always willing to making such loans but on a much secured basis. There are also other tenants that lease costly equipment. The equipment lessors always want to ensure than there will be no one else who will lay claim onto those equipment while they are on the hands of certain tenants. Neither the equipment lessors nor lenders want the landlords to have the first claims to securing collateral and to all leased equipment.

In order to handle such concerns, those leasing equipment and lending money to the tenants usually require lien waivers and consents from the customer’s landlords. It is essential to know about essential practice pointers especially in making effective lien waivers, and of great concerns between the landlords and lenders, and landlords and equipment lessors. The lien priorities and rights between these pairings aren't affected by the federal bankruptcy laws since the bankruptcy laws derive its lien rules between lien holders from appropriate state laws.

Lien Rights for Landlords

Although uncommon, property leases may contain some express provisions that grant the landlord with security interests in any tenant’s property. Such leases, in turn, serve as security agreements for a tenant’s rent obligations. This security interests can actually be perfected if the law has been followed, this may include filing for financing statements. Landlords have special remedies for distress of arrears in rent. Moreover, after proper proceedings, any landlord can generate the status of being a lien creditor similar to any other creditors. All other factors and consideration aside, both the landlord of a tenant and its equipment lessor or lender would want to take on the first call for the tenant’s real property upon default.

The landlords’ rights will arise instantly upon the execution of any lease. Usually, at that stage there is no equipment lessor or lender involved. Therefore, it is typical that a landlord’s lien remedies and right are available in place when a tenant will come to the landlord for a landlord lien waiver. Thus, as a landlord, you should intentionally give up the rights that you have even if the tenant will raise issues during the lease negotiations.

The answers often lie on your real business interest. More often than not, landlords prefer tenants that are successful. These tenants can definitely finance the growth and maintenance of any business. Taking loans directly or through financing devices like the utilization of an equipment lease will provide tenants with an ability of sustaining and improving their businesses. Just like how landlords finance their properties, tenants also finance their businesses.


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