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Can premises already encumbered to a bank be leased out to a Company with a high deposit and in case of a default who holds the first lien? And will the Company/Occupant be evicted?

April 26, 2017Bank Case COMPANY Default deposit encumbered high holds leased occupant premises

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Can premises already encumbered to a bank be leased out to a Company with a high deposit and in case of a default who holds the first lien? And will the Company/Occupant be evicted?

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Ans. Yes premises already encumbered to a bank can be leased out to a Company with a high deposit. However you may require the No-Objection of the bank. If the deposit monies are with you and in case if you default on payment to the bank,obviously you will continue to hold the deposit money. The Co./occupant can be evicted only if there is a provision to that effect in the lease Agreement.