MORTGAGE DEED OF TRUST
(Commonwealth of Virginia)
[// GUIDANCE: This instrument functions as both a Mortgage and a Deed of Trust to align with Virginia practice. Replace bracketed placeholders, delete optional text as appropriate, and verify all factual details before execution and recordation.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Granting Clause & Secured Obligations
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution & Acknowledgment
1. DOCUMENT HEADER
1.1 Parties
(a) “Borrower”: [LEGAL NAME, type of entity/individual, state of organization/residence, address]
(b) “Lender”: [LEGAL NAME, type of entity, state of organization, address]
(c) “Trustee”: [NAME of individual or law firm eligible to serve as trustee under VA law, address]
1.2 Effective Date
This Mortgage is made as of [DATE] (the “Effective Date”).
1.3 Consideration & Intent
For valuable consideration, including the loan evidenced by the hereinafter-defined Note, Borrower irrevocably grants and conveys the Property (defined below) in trust, with power of sale, to Trustee for the benefit of Lender, to secure payment and performance of the Secured Obligations.
2. DEFINITIONS
The following terms, in alphabetical order, have the meanings assigned below. Any term not defined herein that is capitalized has the meaning given to it in the Note.
“Advance” – Any disbursement by Lender under the Loan Documents.
“Borrower” – See Section 1.1(a).
“Default Rate” – The post-default interest rate stated in the Note or, if none, [PERCENTAGE %] per annum, not to exceed the maximum lawful rate.
“Environmental Laws” – Any federal, state or local law, regulation, ordinance or common-law duty relating to pollution or protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.) and the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.).
“Event of Default” – Any occurrence described in Article 6.
“Funds for Taxes and Insurance” – Sums described in Section 5.4.
“Indemnified Parties” – Lender and its successors, assigns, officers, directors, employees, agents, and affiliates.
“Loan” – The credit facility evidenced by the Note.
“Loan Documents” – Collectively, this Mortgage, the Note, any guaranty, assignment of rents, financing statements, environmental indemnity, and all other instruments evidencing or securing the Loan.
“Note” – The promissory note dated on or about the Effective Date executed by Borrower payable to Lender in the principal amount of [$______] (or so much as is advanced), together with interest and other amounts as therein stated.
“Property” – The real and personal property described in Exhibit A (Legal Description) and Exhibit B (Collateral Description), together with all replacements, substitutions, additions and accessions.
“Secured Obligations” – All present and future obligations of Borrower to Lender arising under the Loan Documents, including principal, interest, late charges, default interest, Advances, protective disbursements, indemnities, fees, expenses, and any deficiency following foreclosure or other realization upon the Property, subject to the liability cap in Section 7.3.
3. OPERATIVE PROVISIONS
3.1 Granting Clause
Borrower, in consideration of the Loan and to secure punctual payment and performance of the Secured Obligations, hereby:
(a) Grants, bargains, sells, conveys, mortgages, and warrants to Trustee, in trust with power of sale, all of Borrower’s right, title and interest in and to the Property; and
(b) Grants to Lender a security interest in all fixtures and personal property described in Exhibit B;
TO HAVE AND TO HOLD the same to Trustee and its successors and assigns, in trust, forever, for the uses and purposes herein set forth.
3.2 Conditions Precedent
Lender’s obligation to make any Advance is conditioned on satisfaction of all conditions precedent in the Loan Documents, including receipt of: (i) this duly executed and notarized Mortgage, (ii) evidence of title insurance in form and amount satisfactory to Lender, and (iii) all other deliverables specified in the Loan commitment.
4. REPRESENTATIONS & WARRANTIES
Borrower represents and warrants to Lender that as of the Effective Date and continuing until the Secured Obligations are indefeasibly paid in full:
4.1 Due Organization & Authority – Borrower is duly organized, validly existing, and in good standing under the laws of its jurisdiction and has full power to own the Property and execute the Loan Documents.
4.2 Binding Obligation – This Mortgage and the other Loan Documents constitute legal, valid, and binding obligations enforceable against Borrower in accordance with their terms.
4.3 Title – Borrower holds marketable and insurable title to the Property, free of liens except Permitted Encumbrances listed on Schedule 4.3.
4.4 Compliance – The Property and its current use comply with all applicable zoning, building, health, and Environmental Laws.
4.5 Litigation – There is no pending or, to Borrower’s knowledge, threatened action affecting the Property or Borrower’s ability to perform its obligations under the Loan Documents, except as disclosed on Schedule 4.5.
[// GUIDANCE: Add additional representations (e.g., leases, flood zone status) as deal-specific.]
All representations and warranties survive closing and shall not be affected by any investigation by Lender.
5. COVENANTS & RESTRICTIONS
Borrower covenants and agrees:
5.1 Payment – To pay the Secured Obligations when due in accordance with the Note.
5.2 Maintenance – To keep the Property in good repair, free of waste, and in compliance with applicable law; to make no material alteration without Lender’s prior written consent.
5.3 Insurance – To maintain insurance of types and amounts, and with insurers, acceptable to Lender, naming Lender as mortgagee and loss payee via standard mortgagee clause.
5.4 Taxes & Impositions – To pay, before delinquency, all taxes, assessments, and similar charges on or against the Property. At Lender’s election after an Event of Default or if required under the Loan Documents, Borrower shall deposit monthly with Lender (or its servicer) Funds for Taxes and Insurance in an amount reasonably estimated by Lender.
5.5 Books & Records; Inspection – To maintain books and records pertaining to the Property and permit Lender to examine them and inspect the Property upon reasonable notice.
5.6 Further Assurances – To execute and deliver such further instruments as Lender may reasonably request to carry out the intent of the Loan Documents.
5.7 Negative Covenants – Without Lender’s prior written consent, Borrower shall not:
(a) Transfer or encumber any interest in the Property (other than Permitted Encumbrances);
(b) Permit a change in ownership or control of Borrower;
(c) Allow hazardous materials on the Property except in compliance with Environmental Laws.
5.8 Notice of Material Events – Borrower shall promptly notify Lender of any Event of Default, litigation, condemnation, or casualty affecting the Property.
6. DEFAULT & REMEDIES
6.1 Events of Default
Each of the following constitutes an “Event of Default”:
(a) Payment Default – Failure to pay any amount under the Loan Documents within [____] days after its due date;
(b) Covenant Default – Failure to perform any covenant within [30] days after written notice (or such shorter period if the default cannot be cured by monetary payment and reasonably threatens the Property or Lender’s security);
(c) False Representation – Any representation or warranty proven materially false when made;
(d) Insolvency – Borrower’s bankruptcy, assignment for benefit of creditors, or similar event;
(e) Transfer – Unauthorized transfer or encumbrance of the Property;
(f) Cross-Default – Any default under another Loan Document or under any indebtedness secured by a lien on the Property senior or junior to this Mortgage.
6.2 Cure Rights
If the default is non-monetary and cannot be reasonably cured within the stated period, Borrower shall have such additional time (not exceeding 90 days) as is reasonably necessary so long as it commences and diligently pursues cure.
6.3 Remedies
Upon an Event of Default and expiration of any applicable cure period, Lender may, at its election and without further demand, do any one or more of the following, cumulatively or successively:
(a) Acceleration – Declare the Secured Obligations immediately due and payable;
(b) Power of Sale Foreclosure – In accordance with Virginia non-judicial foreclosure procedures, instruct Trustee to sell the Property at public auction after advertisement and notice as required by law. Trustee may execute and deliver a deed conveying the Property to the purchaser, who shall take title free of all interests subordinate to this Mortgage.
(c) Receivership – Apply to a court of competent jurisdiction for appointment of a receiver to collect rents and manage the Property.
(d) Entry & Possession – Enter and take possession of the Property to protect and preserve the collateral.
(e) Advances – Make protective Advances (e.g., taxes, insurance, repairs) which shall be Secured Obligations bearing interest at the Default Rate.
(f) Deficiency – After foreclosure, apply the proceeds to the Secured Obligations and recover from Borrower any deficiency to the extent permitted under Virginia law, subject to Section 6.4.
(g) Other Remedies – Exercise all rights and remedies available under the Loan Documents, at law or in equity, including injunctive relief.
6.4 Deficiency Judgment Rules
Any deficiency judgment shall be limited to the difference between (i) the total Secured Obligations and (ii) the greater of the foreclosure sale price or the fair market value of the Property as of the date of sale, as determined in accordance with applicable Virginia law.
6.5 Right of Redemption
Borrower may redeem the Property at any time prior to the foreclosure sale by paying all Secured Obligations in full, together with foreclosure costs and Trustee’s fees. Virginia law provides no statutory right of redemption after the foreclosure sale.
6.6 Attorneys’ Fees & Costs
Borrower shall pay all reasonable attorneys’ fees, Trustee’s fees, and other costs of collection or enforcement incurred by Lender, all of which constitute Secured Obligations.
7. RISK ALLOCATION
7.1 Indemnification by Borrower
Borrower shall indemnify, defend, and hold harmless the Indemnified Parties from and against any and all losses, liabilities, claims, damages, penalties, fees, and expenses (including reasonable attorneys’ fees) arising out of or related to: (a) ownership, operation, or use of the Property; (b) violation of Environmental Laws; (c) breach of any representation, warranty, or covenant; or (d) claims by tenants, invitees, or third parties.
7.2 Environmental Matters
Borrower’s indemnity obligations expressly include environmental liabilities and survive foreclosure, satisfaction of the Loan, and any transfer of title.
7.3 Limitation of Liability
Notwithstanding any provision to the contrary, Borrower’s aggregate liability under the Loan Documents shall not exceed the outstanding Secured Obligations plus enforcement costs; provided, however, the foregoing cap shall not apply to (i) fraud or intentional misconduct, (ii) environmental indemnities, or (iii) misapplication of insurance or condemnation proceeds.
7.4 Insurance Proceeds & Condemnation Awards
Lender may (but is not obligated to) apply insurance proceeds or condemnation awards to restoration of the Property or to reduction of the Secured Obligations, in its sole discretion, subject to applicable Virginia law.
7.5 Force Majeure
Time for performance (other than monetary obligations) shall be extended to the extent delayed by events beyond the reasonable control of the party, including acts of God, war, terrorism, or governmental action; provided, however, this Section shall not defer or excuse payment of any monetary obligation.
8. DISPUTE RESOLUTION
8.1 Governing Law – This Mortgage, the Note, and all related documents shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without regard to its conflict-of-laws principles.
8.2 Forum Selection – Borrower irrevocably submits to the exclusive jurisdiction of the state courts located in the county or city where the Property is situated, and agrees that venue is proper in such courts.
8.3 Jury Trial Waiver – [OPTIONAL: To the extent permitted by law, each party knowingly and voluntarily waives its right to a trial by jury in any action arising out of the Loan Documents.]
8.4 Arbitration – The parties expressly exclude arbitration; all disputes shall be resolved in accordance with Section 8.2.
8.5 Cumulative Remedies; Injunctive Relief – Lender’s remedies are cumulative and not exclusive. Nothing herein shall impair Lender’s right to seek injunctive or equitable relief (including foreclosure) to protect or enforce its security interest.
9. GENERAL PROVISIONS
9.1 Amendments & Waivers – No amendment or waiver is effective unless in a writing executed by the party against whom enforcement is sought. No waiver shall be deemed a continuing waiver.
9.2 Assignment – Lender may assign or participate its interest, in whole or in part, without Borrower’s consent. Borrower may not assign its rights or obligations without Lender’s prior written consent.
9.3 Successors & Assigns – The Loan Documents bind and benefit the parties and their respective successors and permitted assigns.
9.4 Severability – If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to effectuate the parties’ intent.
9.5 Integration – The Loan Documents collectively constitute the entire agreement between the parties with respect to the subject matter and supersede all prior understandings.
9.6 Notices – All notices shall be in writing and delivered by certified mail, reputable overnight courier, or personal delivery to the addresses set forth in Section 1.1, or such other address as a party designates in writing, and shall be deemed given upon receipt (or first refusal).
9.7 Counterparts; Electronic Signatures – This Mortgage may be executed in counterparts, each of which constitutes an original, and all of which together constitute one instrument. Signatures delivered via electronic means (e.g., facsimile, PDF, or approved e-signature platform) are binding to the same extent as original signatures.
9.8 Recording – Borrower shall cause this Mortgage (and any modification) to be promptly recorded in the land records of the county or city where the Property is located and shall pay all recording and transfer taxes and fees.
10. EXECUTION & ACKNOWLEDGMENT
IN WITNESS WHEREOF, the parties have executed this Mortgage as of the Effective Date.
[// GUIDANCE: Insert appropriate signature blocks; ensure corporate authority language for entities; include notarial certificates compliant with VA Code § 47.1 and recordation requirements.]
BORROWER:
[LEGAL NAME]
By: ____
Name: ____
Title: _________
LENDER:
[LEGAL NAME]
By: ____
Name: ____
Title: _________
TRUSTEE:
[NAME] (solely for purposes of accepting the trust)
NOTARY ACKNOWLEDGMENT (Borrower)
Commonwealth of Virginia )
City/County of ______ ) to-wit:
The foregoing instrument was acknowledged before me this ___ day of _, 20_, by _____, [title] of ____, a [state & entity type], on behalf of the entity.
Notary Public
My commission expires: _
Notary Registration No.: _
[Duplicate acknowledgment for each signatory as required.]
EXHIBIT A – LEGAL DESCRIPTION
[Attach metes and bounds or subdivision lot description.]
EXHIBIT B – COLLATERAL DESCRIPTION
- All buildings, structures, and improvements now or hereafter located on the land described in Exhibit A.
- All fixtures, machinery, equipment, building materials, and appliances now or hereafter attached to or used in connection with the Property.
- All leases, rents, issues, and profits of the Property.
- All easements, rights-of-way, and appurtenances benefitting the Property.
- All proceeds, including insurance and condemnation awards, relating to any of the foregoing.
[// GUIDANCE:
1. After customization, have local counsel verify conformance with the most current Virginia statutes, local recording requirements, and any transactional specifics (e.g., commercial vs. residential, consumer disclosure rules).
2. Verify Trustee eligibility and compensation provisions (customarily 5% of sale price or other amount as agreed).
3. Consider adding “Single-Member LLC Non-Recourse Carveout” or other specialized provisions if needed.
4. Arrange for title insurance with standard ALTA lender’s policy endorsements appropriate to the transaction.]