N.Y. Real Property Law Section 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.

Source: Section 271 — Construction of covenants in mortgages on leases of real property and bonds or notes, https://www.­nysenate.­gov/legislation/laws/RPP/271 (updated Sep. 22, 2014; accessed Jul. 6, 2024).

240
Definitions and use of terms
240‑B
Certain conveyances authorized
240‑C
Joint tenancy severance
241
Ancient conveyances abolished
242
Disclosure prior to the sale of real property
243
Grant of fee or freehold
244
When grant takes effect
245
Estate which passes by grant or devise
246
Certain deeds declared grants
247
Conveyance by tenant for life or years of greater estate than possessed
248
Effect of conveyance where property is leased
249
Covenants in mortgages
251
Covenants not implied
252
Lineal and collateral warranties abolished
253
Construction of covenants in grants of freehold interests
254
Construction of clauses and covenants in mortgages and bonds or notes
254‑A
Right of election of mortgagee in certain cases
254‑B
Limitation on late charges
254‑C
Right to a copy of real property appraisals and consumer reports in certain cases
254‑D
Fees by mortgagee for direct payment of real property taxes by mortgagor prohibited
255
Construction of grant of appurtenances and of all the rights and estate of grantor
256
Construction of grant in executor’s or trustee’s deed of appurtenances, and of the estate of testator and grantor
257
Covenants bind representatives of grantor and mortgagor and inure to the benefit of whom
258
Short forms of deeds and mortgages
259‑C
Provision in lease of real property for waiver of trial by jury in actions for personal injury or property damage
260
Lands adversely held may be conveyed or mortgaged
261
Maintenance of telegraph or other electric wires raises no presumption of grant
265
Fraudulent intent, question of fact
265‑A
Home equity theft prevention
265‑B
Distressed property consulting contracts
266
Rights of purchaser or incumbrancer for valuable consideration protected
267
Conveyances with power to revoke, determine or alter
268
Disaffirmance of fraudulent act by executor and others
269
When remainderman may pay interest owed by life tenant
270
Powers of courts of equity not abridged
271
Construction of covenants in mortgages on leases of real property and bonds or notes
272
Construction of grant of appurtenances, and all of the rights and estate of the mortgagor
273
What form of mortgage on lease of real property
274
Transfers and mortgages of interest in decedents’ estates
274‑A
Certificate of principal amount unpaid on mortgages of real property
275
Certificate of discharge of mortgage required
276
Effect of certain easements on the right to invest in mortgages
277
Modification and extension of mortgage investment
277‑A
Powers of fiduciaries and others holding guaranteed mortgages or mortgage investments
278
Exchange of mortgage investment
278‑A
Sale or exchange of certain real property or mortgage investments therein authorized
279
Graduated payment mortgage
280
Reverse mortgage loans for persons sixty years of age or older
280‑A
Reverse mortgage loans for persons seventy years of age or older
280‑B
Federal home equity conversion mortgage regulation
280‑D
Federal home equity conversion mortgage default and foreclosure regulation
281
Credit line mortgage
282
Mortgagor’s right to recover attorneys’ fees in actions or proceedings arising out of foreclosures of residential property

Accessed:
Jul. 6, 2024

Last modified:
Sep. 22, 2014

§ 271’s source at nysenate​.gov

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