What can cause a default and acceleration in a commercial mortgage?
Generally, the causes for default activating a lender’s right to foreclose are set forth expressly in the mortgage. Florida courts are liberal as to allowing the parties to freely determine what events may constitute default. Fundamentally, mortgage defaults are classified as monetary or non-monetary defaults. Monetary defaults include failure to make payment when due, since failure to pay goes to the very essence of the loan agreement. Non-monetary defaults are normally violations of one of the long list of covenants and conditions with which the borrower must comply. For example, borrowers are usually required to maintain insurance on the property, to pay all property taxes, to keep the property in good repair, to pay senior loans, to prevent cross-collateralized defaults and many other things. The purpose of most of these conditions is to require the borrower to protect the lender’s collateral. If the borrower does not maintain insurance, for example, and the collateralized structur
