Utah Code 17D-2-505. Security for local building authority bonds
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(1) The principal of and interest on bonds that a local building authority issues under this part:
Terms Used In Utah Code 17D-2-505
- Bond: includes a bond, note, or other instrument issued under this chapter evidencing an indebtedness of a local building authority. See Utah Code 17D-2-102
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage: means any instrument under which property may be encumbered as security for an obligation, including a mortgage, trust deed, indenture, pledge, assignment, security agreement, and financing statement. See Utah Code 17D-2-102
- Project: means an improvement, facility, property, or appurtenance to property that a local entity is permitted under law to own or acquire, whether located inside or outside the local entity's boundary, including:(8)(a) a public building or other structure of any kind; and(8)(b) a joint or partial interest in the improvement, facility, property, or appurtenance to property. See Utah Code 17D-2-102
- Trustee: A person or institution holding and administering property in trust.
(1)(a) shall be secured by a pledge and assignment of the revenue that the local building authority receives under its lease agreement with respect to the project that was financed with the bond proceeds;(1)(b) may be secured by:(1)(b)(i) a mortgage covering some or all of the project;(1)(b)(ii) a pledge and assignment of the lease agreement for that project;(1)(b)(iii) money held in a reserve fund; and(1)(b)(iv) any other security device with respect to the project that the local building authority considers most advantageous.
(2) A proceeding under which a mortgage is given to secure the bonds of a local building authority may contain any agreement or provision listed in Section 17D-2-503 that could be contained in a proceeding under which a local building authority is authorized to issue bonds under this part.
(3) A mortgage to secure bonds issued by a local building authority under this part may provide that:
(3)(a) upon default in its payment or the violation of any covenant or agreement contained in the mortgage, the mortgage may be foreclosed in the manner permitted by law; and
(3)(b) the trustee or holder of any bond secured by the mortgage may become the purchaser at a foreclosure sale, if the trustee or holder is the highest bidder.