REAL ESTATE MORTGAGE AND DEED OF TRUST
(Texas Property – Security Instrument)
[// GUIDANCE: This template combines the traditional “Mortgage” terminology requested by the client with the deed-of-trust architecture customarily used in Texas. Replace bracketed items, attach the Promissory Note, and conduct a title review before execution.]
TABLE OF CONTENTS
- Definitions
- Granting Clause
- Secured Obligations
- Representations & Warranties
- Covenants
- Events of Default
- Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution & Acknowledgement
MORTGAGE AND DEED OF TRUST
This Real Estate Mortgage and Deed of Trust (“Security Instrument”) is made as of [EFFECTIVE DATE] (“Effective Date”) by and among:
• [BORROWER LEGAL NAME], a [ENTITY TYPE & STATE] (“Borrower”);
• [LENDER LEGAL NAME], a [ENTITY TYPE & STATE] (“Lender”); and
• [TRUSTEE LEGAL NAME], a [resident/corporate trustee] of Texas (“Trustee”).
Recitals
A. Borrower is indebted to Lender under that certain Promissory Note dated of even date herewith (the “Note”) in the original principal amount of $[PRINCIPAL AMOUNT] (or such lesser or greater amount as may be outstanding from time to time).
B. Borrower desires to secure payment and performance of the Note and all other Obligations (as defined below) by granting Lender a first priority lien on the Property (defined below).
C. The parties intend that this Security Instrument create a mortgage lien and a deed-of-trust lien under Texas law.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, Borrower hereby agrees as follows:
1. DEFINITIONS
For ease of reference, the following capitalized terms shall have the meanings set forth below. Any term defined in the Texas Uniform Commercial Code (“UCC”) and used herein shall have the meaning from the UCC, unless otherwise defined.
“Applicable Law” – All federal, state, and local statutes, regulations, ordinances, and common-law principles governing the Loan, the Property, and this Security Instrument.
“Collateral” – Collectively, the Property, the Rents, the Personal Property, and all other rights and interests encumbered hereby.
“Event of Default” – Any event or circumstance described in Section 6.
“Indebtedness” – The principal, interest, charges, fees, advances, and all other amounts owing under the Note, this Security Instrument, or any other Loan Document.
“Loan” – The financial accommodation evidenced by the Note and secured by this Security Instrument.
“Loan Documents” – The Note, this Security Instrument, all guaranties, assignments, financing statements, environmental indemnities, and all other documents executed in connection with the Loan.
“Personal Property” – All fixtures, improvements, equipment, inventory, accounts, and general intangibles now or hereafter located on, affixed to, or used in connection with the Property, together with replacements and proceeds.
“Property” – The real property described in Exhibit A attached hereto, together with all easements, rights-of-way, privileges, water rights, and appurtenances.
“Rents” – All rents, income, issues, and profits of the Property, whether past, present, or future.
“Secured Obligations” – (i) the Indebtedness, (ii) all obligations under the Loan Documents, and (iii) all renewals, extensions, and modifications thereof.
2. GRANTING CLAUSE
Borrower hereby (i) MORTGAGES, CONVEYS, and WARRANTS to Trustee, in trust for the benefit of Lender, and (ii) GRANTS to Lender a security interest in, the Collateral, to secure prompt payment and performance of the Secured Obligations. Until an Event of Default, Borrower shall have possession of the Collateral and the right to collect and retain the Rents.
3. SECURED OBLIGATIONS
3.1 Note Obligations. Payment of the unpaid principal, accrued interest, late charges, and all other sums due under the Note.
3.2 Additional Advances. Sums advanced by Lender to protect the lien or value of the Collateral, including taxes, insurance, or repairs (collectively, “Protective Advances”), together with interest thereon at the Default Rate stated in the Note.
3.3 Further Assurances. Borrower’s obligation to execute such additional agreements, financing statements, and documents as Lender reasonably requests to perfect or continue its lien.
4. REPRESENTATIONS & WARRANTIES
Borrower represents and warrants to Lender as of the Effective Date and on each date any amount is outstanding:
4.1 Organization & Authority. Borrower is duly organized, validly existing, and in good standing under Applicable Law and is authorized to execute and deliver the Loan Documents.
4.2 Title. Borrower holds indefeasible fee simple title to the Property free of all liens except those permitted by Section 5.3.
4.3 Compliance. The Property and its current use comply in all material respects with Applicable Law, including zoning, building codes, and environmental regulations.
4.4 Litigation. No pending or threatened litigation, condemnation, or administrative proceeding would materially impair Borrower’s ability to perform its obligations.
4.5 Financial Statements. All financial information delivered to Lender is true, complete, and fairly presents Borrower’s financial condition.
4.6 Survival. All representations and warranties shall survive repayment of the Indebtedness and any foreclosure hereunder to the extent Lender may have relied upon same.
5. COVENANTS
Borrower covenants and agrees until the Secured Obligations are fully satisfied:
5.1 Payment. Borrower shall timely pay the Indebtedness in accordance with the Note.
5.2 Taxes & Assessments. Borrower shall pay prior to delinquency all taxes, assessments, and governmental charges against the Collateral.
5.3 Liens. Borrower shall not create, permit, or suffer any lien on the Collateral other than (i) this Security Instrument, (ii) liens approved in writing by Lender, and (iii) liens that are being contested in good faith with adequate reserves.
5.4 Insurance. Maintain insurance in form, amounts, and with insurers reasonably satisfactory to Lender, including (a) all-risk property insurance in at least the full replacement cost, (b) commercial general liability insurance, and (c) flood insurance if required by federal law.
5.5 Maintenance. Keep the Property in good repair, free of waste, and compliant with Applicable Law; promptly correct any condition that could materially diminish value.
5.6 Transfers. Except with Lender’s prior written consent, Borrower shall not sell, convey, lease (other than bona fide arm’s-length leases), or otherwise transfer any interest in the Collateral.
5.7 Books & Records; Inspection. Maintain complete records and permit Lender on reasonable notice to inspect the Collateral and examine Borrower’s books.
5.8 Right of Redemption. Borrower waives, to the fullest extent permitted by law, any equitable or statutory right of redemption or reinstatement after foreclosure, except any non-waivable right under Tex. Prop. Code §§ 16.036–.038 (if applicable).
5.9 Financial Reporting. Provide annual financial statements within 120 days after fiscal year-end and such interim statements as Lender reasonably requests.
5.10 Notice of Certain Events. Provide prompt written notice to Lender of (a) any Event of Default, (b) material damage or loss to the Property, or (c) any governmental or litigation notice that could affect the Collateral.
6. EVENTS OF DEFAULT
Each of the following constitutes an “Event of Default”:
6.1 Monetary Default. Failure to pay any amount under the Note or any Protective Advance within ten (10) days after its due date.
6.2 Covenant Default. Failure to perform or observe any non-monetary covenant herein, and such failure continues for thirty (30) days after notice; provided, if the default is not reasonably curable within thirty days, Borrower shall have an additional sixty (60) days, so long as curing is diligently pursued.
6.3 False Representation. Any representation or warranty proves materially false when made or re-made.
6.4 Bankruptcy. Borrower (i) commences a voluntary bankruptcy, (ii) has an involuntary bankruptcy petition filed against it that is not dismissed within 60 days, or (iii) makes a general assignment for benefit of creditors.
6.5 Transfer or Lien. Unauthorized transfer or encumbrance of the Collateral.
7. REMEDIES
Upon an Event of Default, Lender may, at its election and without demand (except as expressly required by statute), exercise any or all of the following cumulative remedies:
7.1 Acceleration. Declare the entire Indebtedness immediately due and payable.
7.2 Foreclosure – Power of Sale. Invoke the Texas power-of-sale procedures in Tex. Prop. Code § 51.002, designating Trustee (or a substitute trustee) to sell the Property at public auction after providing the statutory notices (currently at least 21 days’ written notice of the date, time, and place of sale).
7.3 Foreclosure – Judicial. Commence a judicial foreclosure or seek an order for specific performance.
7.4 Entry & Possession. Enter upon and take possession of the Property, collect Rents, and apply them to the Secured Obligations.
7.5 Receivership. Apply to a court of competent jurisdiction for appointment of a receiver without the necessity of showing insolvency or waste.
7.6 Protective Advances. Make Protective Advances, which shall bear interest at the Default Rate and be secured equally with the principal of the Note.
7.7 Deficiency. To the extent permitted by Tex. Prop. Code § 51.003, seek a personal or deficiency judgment for any unpaid balance after foreclosure, the amount thereof to be reduced by the fair market value as determined pursuant to that statute.
7.8 Attorney Fees. Recover reasonable attorneys’ fees and costs incurred in exercising remedies, which amounts shall be added to the Indebtedness.
8. RISK ALLOCATION
8.1 Indemnification. Borrower shall indemnify, defend, and hold harmless Lender and Trustee from all claims, liabilities, losses, and expenses (including reasonable attorneys’ fees) arising out of (i) ownership, operation, or condition of the Collateral, (ii) any breach of the Loan Documents, or (iii) violation of environmental laws. This obligation survives satisfaction of the Indebtedness and foreclosure. [// GUIDANCE: For environmental indemnity carve-outs, see separate stand-alone agreement if exposure is significant.]
8.2 Limitation of Liability. Lender’s liability to Borrower for any claim arising out of the Loan Documents is limited to the total Secured Obligations actually received by Lender; in no event shall Lender be liable for special, consequential, or punitive damages.
8.3 Force Majeure. Borrower is excused from non-monetary performance hereunder during, and to the extent caused by, acts of God, strikes, war, pandemic, or other events beyond Borrower’s reasonable control, provided Borrower gives prompt notice and resumes performance as soon as practicable.
9. DISPUTE RESOLUTION
9.1 Governing Law. This Security Instrument and the Loan Documents shall be governed by and construed in accordance with the laws of the State of Texas, without regard to conflict-of-laws principles.
9.2 Forum Selection. Borrower irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY, TEXAS] for any action arising out of the Loan Documents, and waives objection based on venue or forum non conveniens.
9.3 Arbitration. The parties expressly exclude arbitration; all disputes shall be resolved in the courts designated above.
9.4 Jury Waiver. To the extent permitted by Applicable Law, each party knowingly and voluntarily waives trial by jury in any action arising out of the Loan Documents.
9.5 Injunctive Relief. Nothing herein shall limit Lender’s right to seek injunctive or equitable relief, including temporary restraining orders or foreclosure-related injunctions.
10. GENERAL PROVISIONS
10.1 Amendments; Waivers. No amendment or waiver is effective unless in writing signed by Lender. A waiver on one occasion is not a waiver on any future occasion.
10.2 Assignment. Lender may assign or participate its interests without Borrower’s consent. Borrower may not assign any right or delegate any duty without Lender’s prior written consent.
10.3 Successors & Assigns. The Loan Documents bind and benefit the parties and their respective successors and permitted assigns.
10.4 Severability. If any provision is invalid, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to achieve its original intent.
10.5 Integration. The Loan Documents collectively constitute the entire agreement regarding the subject matter and supersede prior oral or written agreements.
10.6 Notices. Notices must be in writing and delivered by (i) certified U.S. mail (return receipt requested), (ii) nationally recognized overnight courier, or (iii) personal delivery, to the addresses set forth below (or as subsequently designated), and are effective upon receipt or refusal.
10.7 Counterparts; Electronic Signatures. The Loan Documents may be executed in counterparts, each of which is an original. Electronic signatures, facsimiles, and PDFs shall be deemed originals for all purposes under Tex. Bus. & Com. Code § 322.007.
10.8 Time of the Essence. Time is of the essence as to all obligations.
10.9 Recording. Borrower shall pay all costs of recording this Security Instrument in the real property records of [COUNTY, TEXAS].
11. EXECUTION & ACKNOWLEDGEMENT
IN WITNESS WHEREOF, Borrower has executed this Security Instrument as of the Effective Date.
[Proper signature block for entity type]
[BORROWER LEGAL NAME]
By: _________
Name: [AUTHORIZED SIGNATORY]
Title: [TITLE]
[LENDER LEGAL NAME]
By: _________
Name: [AUTHORIZED SIGNATORY]
Title: [TITLE]
[TRUSTEE SIGNATURE – include if trustee executes]
[TRUSTEE LEGAL NAME], Trustee
TEXAS NOTARY ACKNOWLEDGMENT
State of Texas §
County of ____ §
This instrument was acknowledged before me on _, 20_, by ___, [title] of ____, a __, on behalf of said ___.
Notary Public, State of Texas
My Commission Expires: ____
EXHIBIT A
(Legal Description of the Property)
[Attach full metes-and-bounds or lot-and-block description.]
[// GUIDANCE:
1. Review Tex. Prop. Code §§ 51.002–.003 each time for notice periods or fair-market-value calculation tweaks.
2. Confirm county recording requirements (margins, font size, grantee address block).
3. Update insurance minimums based on project type.
4. For homestead property, consult Texas Constitution art. XVI, § 50 to ensure lien validity.
5. Consider adding a “Single-Disbursement” or “Future Advance” clause if loan structure requires.]