Delaware Real Estate Law Update: Changes for Leasehold Mortgages
August 5, 2010
Publication| Real Estate Services
On July 23, 2010, Governor Markell signed into law a bill that clarifies a long-standing ambiguity in Delaware law regarding leasehold mortgages. While Delaware law has long allowed the mortgaging of a leasehold where the term of the lease is 10 years or more, it was unsettled whether the 10-year requirement applied to the original term of the lease as of the date it was entered into or the remaining balance of the term at the time of the leasehold mortgage transaction. The bill follows the generally accepted view that the original length of the term governs—not what remains of the term at the time of the mortgage. This amendment allows for certainty regarding leasehold mortgage transactions in Delaware.