DIRT: Real Estate Law, Trends and Analysis

By February 24, 2010 Blog, Real Estate Law

I am a member of a group called DIRT, which is a national, on-line forum for sharing of trends and insights among real estate attorneys and others interested in real estate law.  It was started and continues to be managed by Professor Patrick Randolph from the University of Missouri – Kansas City Law School.  Prof. Randolph has done a remarkable job of creating an active and engaging forum for the sharing of real estate law develops.  Readers are likely to see many entries on this blog that have their genesis in issues raised and discussed on DIRT.
One of the regular insightful participants on DIRT is Jack Murray, Vice President and General Counsel for First American Title Company’s National Commercial Division.  Mr. Murray is a prolific writer, with many of his articles posted in a special First American Underwriting Library dedicated solely to Mr. Murray’s work.  Here is the link.
In addition to scholarly law review articles, Mr. Murray also has a delightful sense of humor.  In a recent posting on DIRT in response to an inquiry about the rights of a secured real estate lender upon the death of the borrower, he states that lenders often insert the following protective provisions in their loan documents to cover this situation:

DEATH.  Upon the death of any individual [Borrower], the lien of this Mortgage will extend to, and include, any cemetery plot, crypt, or other place of final interment of such deceased [Borrower], together with any and all rents, issues, incomes, and profits arising therefrom, and any and all renewals, replacements, accessions, improvements, and substitutions, and a prior perfected security interest in and to any and all effects, articles of personal adornment, gold fillings, and other things of value severed or capable of severance without material injury to the corpse of the deceased [Borrower]. The foregoing lien and security interest may be enforced by any lawful procedure and will continue until whichever of the following occurs first: (i) full payment of the Indebtedness; or (ii) [Lender] is furnished with a substitute hostage of equal or better class, quality, usefulness, and value of the deceased  [Borrower].
END OF THE WORLD.  Upon the occurrence of the end of the world before full payment of the Indebtedness, the Indebtedness, at [Lender]’s option, will become immediately due and payable in full and may be enforced against [Borrower] by any available procedure. For remedial purposes, [Lender] will be deemed aligned with the forces of light, and [Borrower] with the forces of darkness, regardless of the parties’ actual ultimate destinations, unless and until [Lender] elects otherwise in writing.

Thomas B. Jacob, Real Estate Group