2023 New York Laws › RPP - Real Property › 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.