New York Laws
Article 8 - Conveyances and Mortgages
271 - Construction of Covenants in Mortgages on Leases of Real Property and Bonds or Notes.

§ 271. Construction of covenants in mortgages on leases of real
property and bonds or notes. In mortgages on leases of real property and
in bonds or notes secured thereby, the following or similar covenants or
agreements must be construed as follows:

1. In default of payment, mortgagee to have power to sell.--- A
covenant that the mortgagor "will pay the indebtedness, as provided in
the mortgage, and if default be made in the payment of any part thereof,
the mortgagee or obligee shall have power to sell the premises therein
described, according to law," must be construed as meaning that the
mortgagor or obligor shall well and truly pay unto the mortgagee or
obligee the said sum of money mentioned in the condition of the said
bond, note or obligation, and the interest thereon, according to the
condition of the said bond, note or obligation. And if default shall be
made in the payment of the said sum of money therein mentioned, or in
the interest which shall accrue thereon, or of any part of either, that
then and from thenceforth it shall be lawful for the said mortgagee or
obligee, his legal representative or assigns, to sell, transfer and set
over, all the rest, residue and remainder of the said term of years then
yet to come, and all other, the right, title and interest of the said
mortgagor or obligor of, in and to the same, at public auction,
according to the act in such case made and provided. And as the attorney
of the said mortgagor or obligor for that purpose by these presents duly
authorized, constituted and appointed, to make, seal, execute and
deliver to the purchaser or purchasers thereof, a good and sufficient
assignment, transfer or other conveyance in the law, for the said
premises, with the appurtenances; and out of the money arising from such
sale, to retain the principal and interest which shall then be due on
the said bond, note or obligation, together with the costs and charges
of advertisement and sale of the said premises, rendering the overplus
of the purchase-money (if any there shall be) unto the said mortgagor or
obligor, his legal representatives or assigns; which sale, so to be
made, shall forever be a perpetual bar, both in law and equity, against
the said mortgagor or obligor, and against all persons claiming or to
claim the premises or any part thereof, by, from or under him or them,
or any of them.

2. Mortgagor to keep buildings insured.--- A covenant "that the
mortgagor will keep the buildings on the said premises insured against
loss by fire, for the benefit of the mortgagee," must be construed as
meaning that the said mortgagor or obligor shall and will keep the
buildings erected and to be erected upon the lands above conveyed,
insured against loss and damage by fire, by insurance, and in an amount
approved by the said mortgagee or obligee and his assigns, and either
assign the policy and certificates thereof or have such insurance made
payable to the said mortgagee or obligee or his assigns, and in default
thereof it shall be lawful for the said mortgagee or obligee and his
assigns to effect such insurance, and the premium and premiums paid for
effecting the same shall be a lien on the said mortgaged premises, added
to the amount of the said bond, note or obligation, and secured by these
presents, and payable on demand, with legal interest.

3. Mortgagor to pay rent and charges on premises.--- A covenant that
the mortgagor "will pay the rent and other charges mentioned in and made
payable by said indenture of lease within ....... days after said rent
or charges are payable," must be construed as meaning that the said
mortgagor or obligor and his legal representatives and assigns, will pay
or cause to be paid, and discharge all rent and rents mentioned in and
made payable by the indenture of lease aforesaid, and also all taxes,
assessments or other charges that now are a lien, or hereafter shall or
may be levied, assessed or imposed and become a lien upon the premises

above described or any part thereof; and in default thereof, for the
space of ....... after such taxes or assessments or ....... after the
said rent or rents, or any of them shall have become due and payable by
the terms of said lease or by law, then and in each and every such case
the said mortgagee or obligee, his legal representatives or assigns may,
at option, and without notice, pay such rent or rents, taxes,
assessments or other charges and expenses, and the amount so paid, and
interest thereon, from the time of such payment, shall forthwith be due
and payable from the said mortgagor or obligor, his legal
representatives or assigns, to the said mortgagee or obligee, his legal
representatives or assigns, and shall be deemed to be secured by these
presents, and shall be collectable in the same manner, and at the same
time, and upon the same conditions as the interest then next maturing
upon the principal sum hereinbefore mentioned.

4. Agreement that whole sum shall become due.--- The words "And it is
hereby expressly agreed that the whole of the said principal sum shall
become due at the option of said mortgagee or obligee after default in
the payment of any instalment of principal or after default in the
payment of interest for ....... days, or after default in the payment of
any rent or other charge made payable by said indenture of lease for
........ days, or after default in the payment of any tax or assessment
for ....... days after notice and demand," must be construed as meaning
that should any default be made in the payment of any instalment of
principal or any part thereof, or of said interest or any part thereof,
or of any rent or other charge made payable by said indenture or lease,
on any day whereon the same is made payable, or should any tax or
assessment, which now is or may be hereafter imposed upon the premises
hereinafter described, become due and payable, and should the said
interest, rent or other charge aforesaid, remain unpaid and in arrear
for the space of ....... days, or such tax or assessment remain unpaid
and in arrear for ....... days after written notice by the mortgagee or
obligee, his executors, administrators or assigns, that such tax or
assessment is unpaid, and demand for the payment thereof, then and from
thenceforth, that is to say, after the lapse of either one of said
periods, as the case may be, the aforesaid principal sum, with all
arrearage of interest thereon, rent and other charges paid by the
mortgagee or obligee, shall, at the option of the said mortgagee or
obligee, his executors, administrators or assigns, become and be due and
payable immediately thereafter, although the period above limited for
the payment thereof may not then have expired, anything thereinbefore
contained to the contrary thereof in anywise notwithstanding.

Structure New York Laws