Dictionary of Business Terms: leasehold mortgage
leasehold mortgage
lien on the tenant's interest in real estate; generally subordinate to other liens on the property.
Dictionary of Real Estate Terms: leasehold mortgage
leasehold mortgage
a lien on the tenant's interest in real estate.
Example: Abel is leasing land from Baker under a 50-year lease. Abel builds a shopping center and borrows money from the Big Money Assurance Company to do so. Big Money Assurance Company secures the loan with a leasehold mortgage. The mortgage will be lower in priority (subordinate) to land lease because the lease was contracted first. Had the mortgage been arranged before the lease, the mortgage would have priority. The holder of a prior lien has first claim to the income and assets if in default.
