Leases may contain provisions authorizing the lessee or such one’s successors in interest to sublease the premises, in whole or in part, assign the same, or encumber the leasehold interest for the sole purposes of borrowing capital for development, improvement or purchase and sale of the leasehold interest including improvements. Such provisions may be with or without approval of the lessor but if without such approval, any sublease, assignment or encumbrance shall not serve to relieve any sublessor, assignor or purchaser upon foreclosure for any liability or obligation to perform the terms, conditions and covenants of the original lessee under the lease, including that for payment of rent unless the lease expressly so provides. In the event of any sublease, assignment or encumbrance by lessee or such one’s successor in interest of the leasehold interest, the lessor may require notification thereof together with a copy of the sublease, assignment or encumbrance. All leases containing suretyship provisions shall provide that any surety under any bond shall first consent in writing to any sublease, assignment, encumbrance or amendment of the lease before any of such shall be valid and binding upon the lessor. Notwithstanding the provisions of this article, any lease granted hereunder authorizing the encumbrance of leasehold interest may contain such provisions necessary to conform with the eligibility requirements for leasehold secured lending as may now or hereafter be promulgated by FNMA, FHLMC, FHA/HUD and/or VA in the discretion of the Board of Directors.
(Ord. 47 § 8, 4-5-1980; Ord. 47 § 8, 3-7-1981; Res. 86-0284; Ord. 47 § 8, 3-8-2003 (Res. 2003-085); Ord. 47A § 8, 1-9-2004 (Res. 2004-006))