Florida/Georgia Personal Injury & Workers Compensation

...Assuming, arguendo, that the amended complaint properly alleged independent torts which Lennar had the right to prosecute we would still hold that the amended complaint fails to set forth a cause of action upon which relief may be granted. Lennar argues that section 697.07, Florida Statutes (1993) [5] should be applied retroactively and that section 697.07 *497 governs in instant action. We agree with Lennar that section 697.07, Florida Statutes (1993) should be applied retroactively and that it governs in the instant action. In Ormond Beach Assoc. Limited Partnership v. Citation Mortgage, Ltd., 634 So.2d 1091 (Fla. 5th DCA 1994) the court held that section 697.07, Florida Statutes was remedial in nature and thus may be applied retroactively. We agree with our sister court that "section 697.07 does not purport to cause the transfer of an ownership interest in the rents, [but] merely ... establish[es] procedures designed to give effect to the parties' rent assignment." Id. at 1092 (citations omitted). Further, we believe it was the intent of the Legislature that section 697.07 be applied retroactively. In 1993 the Legislature amended section 697.07, in part, in response to several cases which held the statute not to be applicable retroactively....

...ocedural in nature may be applied retroactively. See Alamo v. Mancusi, 632 So.2d 1352 (Fla. 1994); Department of Agriculture and Consumer Services v. Bonanno, 568 So.2d 24 (Fla. 1990); Serna v. Milanese, 643 So.2d 36 (Fla. 3d DCA 1994). We hold that section 697.07, Florida Statutes (1993) is procedural in nature and should be applied retroactively. Lennar alleges that under section 697.07, Florida Statutes their right to the rents vested *498 immediately, without notice, upon default by the borrowers. Lennar reaches this conclusion by interpreting section 697.07(3) as allowing the parties to an assignment of rents to contract away the necessity of a written demand for those rents. We disagree with Lennar's interpretation of the statute. Section 697.07, Florida Statutes is procedural, it sets out the steps a mortgagee must take in order to enforce an assignment of rents. As we understand section 697.07 a mortgagor and mortgagee are free to contract for an assignment of rents, and enforcement of that assignment will be governed by the statute....

...ed prior to Lennar's ownership of the mortgages in question. Assuming, which we don't, that independent torts were committed by either Ginsberg or MLG, those torts could only have been committed against the RTC and thus were personal to the RTC. [5] Section 697.07 Florida Statutes (1993) reads as follows: (1) A mortgage or separate instrument may provide for an assignment of rents of real property or any interests therein as security for payment of an indebtedness....

...(8) Any moneys received by the mortgagee pursuant to this statute shall be applied by the mortgagee in accordance with the mortgage, separate assignment-of-rents instrument, or promissory note, and the mortgagee shall account to the mortgagor for such application. [6] "The bill [amending section 697.07] provides: 1) that the assignment of rents of real property creates a lien on the rents; 2) that a mortgagee is entitled to collect rents due to the mortgagor without the necessity of commencing legal proceedings; 3) that it is only wh...

...ditions have been performed." At best these allegations set forth that the borrowers were notified, by the RTC, that they were in default and nothing more. We hold that these allegations do not sufficiently allege a written demand as required by the section 697.07 Florida Statutes or show that all conditions precedent have been performed either by Lennar or the RTC as required by Shreve....

...Accordingly, it claims that it has an immediate right of possession upon default without the necessity of conducting foreclosure proceedings. Alternatively, Cal Fed argues that its assignment rights vested upon demand under newly enacted Florida Statute § 697.07....

...t is deemed subject to the rules of foreclosure. § 697.01, Florida Statutes; See also, Four Star Aviation, supra. These decisions must now be re-examined in light of the recent amendments to Chapter 679, Florida Statutes. That statute, specifically § 697.07, now provides: A mortgage may provide for an assignment of rents....

...ke away vested rights, the prohibition against retroactive application does not apply. Lakeland v. Catinella, 129 So. 2d 133 (Fla.1961); Johnson v. State, 371 So.2d 556 (Fla. 2d DCA 1979); 49 Fla. Jur.2d Statutes §§ 106-109. Movant has argued that § 697.07 is procedural in nature and fits within the exception to the general rule. The Court agrees. Florida Statute § 697.07 does not create any new rights regarding the ability to assign rents....

...Furthermore, the statute does not impair any existing contract rights as the parties freely contracted for the assignment of rents. All the statute does is merely change the procedural manner in which an assignment of rents becomes effective. Absent an appellate ruling which is binding upon this Court, § 697.07 will be given retroactive effect to all pending cases and an assignment of rent will become effective upon compliance with the statute....

...matured on August 9, 1989. Shortly thereafter, Professional commenced a foreclosure action against the Debtor in Dade County Circuit Court, and made a demand for the turnover of rents under the assignment of rents clause in the Mortgage, pursuant to § 697.07, Fla.Stat....

...third date, March 22, 1990. On March 22, 1990, this Court conducted its final hearing concerning the Motion and Objection. The central issue addressed at that hearing and in this opinion is whether the mortgagee's issuance of the notice provided in § 697.07, Fla.Stat., creates an absolute transfer of the ownership interest of the rents derived from the mortgaged property, such that those rents are not property of the Debtor's estate under Section 541(a) of the Bankruptcy Code, 11 U.S.C. § 541(a), and accordingly not cash collateral as defined in 11 U.S.C. § 363(a). This threshold issue must be resolved prior to addressing the cash collateral issue raised by the Debtor's Motion. If, as Professional contends, the effect of its § 697.07 notice is to transform the collateral assignment of rents into an absolute assignment, then the rents are neither property of the estate nor cash collateral, and the Motion must be denied....

...914, 59 L.Ed.2d 136 (1979), the Supreme Court concluded that the rights to rents and profits derived from mortgaged property is to be determined by the laws of the state in which the property is located, rather than by federal law. Accordingly, the Court must apply Florida law, specifically § 697.07, Fla.Stat., to the case at bar. The Florida assignment of rents statute, § 697.07, became effective on October 1, 1987....

...Since the Note and Mortgage to Professional were executed subsequent to the effective date of the statue, the question of retroactive application, and a good deal of the existing case law, is irrelevant to the issue at hand. Prior to the enactment of § 697.07, Florida common law provided that a mortgagee was not entitled to any of the rents and profits derived from the property unless it had obtained an order of sequestration or actually taken possession of the property, either by consent or the appointment of a receiver....

...881, 882 (1935)); In re Hamlin's Landing Joint Venture, 77 B.R. 916, 919-20 (Bankr. *89 M.D.Fla.1987); In re Parham, 72 B.R. 604, 605-06 (Bankr. M.D.Fla.1987); Bornstein v. Somerson, 341 So.2d 1043, 1048-49 (2d DCA 1977). The above decisions must now be reexamined in light of the enactment of § 697.07, the pertinent portion of which provides: A mortgage may provide for an assignment of rents. If such assignment is made, such assignment shall be absolute upon the mortgagor's default, becoming operative upon written demand made by the mortgagee. § 697.07, Fla.Stat. (1987) (emphasis added). As indicated, Professional contends that upon the Debtor's default and its own compliance with the written demand provisions of § 697.07, the collateral assignment of rents became absolute, such that the postpetition rents are not "cash collateral." In opposition, the Debtor primarily relies upon the decision in the case of In re One Fourth Street North, Ltd., 103 B.R....

...ere by Professional and concluded that although the statutory language suggested precisely that result, the statute "was not meant to create an outright or absolute transfer of ownership interest. . . ." Id. at 321. This Court is of the opinion that § 697.07 does in fact create an absolute transfer of the ownership interests in the rents, and accordingly disagrees with Judge Paskay's decision in In re One Fourth. The statute's legislative history consists of the legislative analysis for House Bill 1153, enacted into law by the Legislature as § 697.07....

...ments containing such clauses. Final Staff Analysis, H.B. 1153, p. 108 (June 17, 1987). It is obvious that the drafters were aware of Florida's common law concerning the assignments of rents. The legislative analysis goes on to state that "[s]ection 697.07, Florida Statutes, is created to provide that any mortgage may contain an assignment of rents, and where such assignment is made it shall be absolute upon default of the mortgagor. The assignment shall become operative upon written demand by the mortgagee." Id. From this history, the Court concludes that after recognizing the problems in enforcing assignments of rents under Florida common law, the Legislature enacted § 697.07 for the specific purpose of solving those problems. As a new law, § 697.07 would remedy the enforcement problem by enabling and authorizing the mortgagee to enforce its assignment of rents clause without the need for the foreclosure proceeding....

...Upon exhaustive review of the legislative history, the Court concludes that the Legislature was well aware of existing law and intended to provide a simple, equitable and inexpensive procedure for mortgagees to enforce provisions calling for the assignment of rents. The Court's interpretation of § 697.07 also receives support from existing case law. See generally In re Camelot Associates Ltd., Partnership, 102 B.R. 161, 165 (Bankr.D.Minn.1989) ("Fla.Stat. § 697.07 makes all Florida assignments of rents into absolute transfers of the ongoing income stream, enforceable after the mortgagor's default upon the mortgagee's subsequent written demand"); In re Aloma Square, Inc. 85 B.R. 623, 625-26 (Bankr.M.D.Fla. 1988) (prohibiting debtor's use of cash collateral upon finding that after § 697.07 demand for turnover of rents, lender was not affected by the automatic stay, thereby implying that rents derived from property were not property of that debtor's estate); Executive Square, Ltd....

...Delray Executive Square Ltd., 546 So.2d 434 (3d DCA 1989) (assignment of rents became absolute upon default and operative upon written demand). In reaching this result, the Court has considered and rejected the Debtor's contention that the remaining text of § 697.07 supports an interpretation that it does not contemplate an absolute transfer of ownership rights in the rents. The pertinent language of § 697.07 provides that: Upon application by the mortgagee, a court of competent jurisdiction may require the mortgagor to deposit such rents in the registry of the court pending adjudication of the mortgagee's right to the rents, any payments therefrom to be made solely to protect the mortgaged property and meet the mortgagor's lawful obligations in connection with the property. Any undisbursed portion of said rents shall be disbursed in accordance with the court's final judgment or decree. § 697.07, Fla.Stat....

...In such case, the mortgagee has the ability to require the mortgagor to deposit the rents into the registry of the court pending adjudication of the mortgagee's rights, a process which may ultimately take several months. The Court also rejects the Debtor's argument that notwithstanding the foregoing interpretation of § 697.07, the equities of the case authorize the Court to allow the use of rents as cash collateral under 11 U.S.C. § 363(c)(2). The Debtor and Professional voluntarily entered into the Note and Mortgage. The Mortgage contained an assignment of rents clause governed by § 697.07, Fla.Stat. It would be utterly improper for the Court to rewrite the Note and Mortgage in order to revive in the mortgagor rights which have passed to the mortgagee by operation of the § 697.07 demand. Principal Mutual Life Insurance Co. v. Lamb, 552 So.2d 1156, 1157 (3d DCA 1989). In summary, the Court is persuaded by the limited case law and available legislative history that § 697.07 is intended to create an absolute transfer of the income stream to the mortgagee, upon default and written demand to the mortgagor, such that the rents derived from the Property are not "cash collateral" within the scope of 11 U.S.C....

...However, when the mortgages went into default, Ginsberg allegedly diverted the rents to his personal use. See id. As a result, Lennar filed suit alleging, inter alia, conversion and civil theft. See id. at 492-93. Both of Lennar's claims were based on Fla. Stat. § 697.07, which governs the steps a mortgagee must take in order to enforce an assignment of rents....

...ortgagor shall turn over all rents in the possession of the mortgagor at the time of the written demand or collected thereafter (the "collected rents") to the mortgagee less payments of any expenses authorized by the mortgagee in writing. Fla. Stat. § 697.07. According to Lennar, § 697.07 afforded it an automatic right to the rents upon default thereby satisfying the immediate possession element of its conversion and civil theft actions....

...rtgage held by Florida Federal. Presently under consideration is the issue of whether or not the conditional assignment set forth in the Mortgage and Assignment of Rents held by Florida Federal has become an absolute assignment pursuant to Fla.Stat. § 697.07, thereby *321 transferring ownership to all rents and incomes generated by the mortgaged property to Florida Federal. Florida Federal contends that it has perfected and established its right to the rents prior to the filing of the bankruptcy case in accordance with Fla.Stat. § 697.07, and, therefore, is entitled to an Order prohibiting use of the rents collected or sequestering the rent. Fla.Stat. § 697.07 provides in pertinent part: A mortgage may provide for an assignment of rent and if such assignment is made, such assignment shall be absolute upon the mortgagor's default, becoming operative upon written demands made by the mortgagee. Under Florida common law prior to the enactment of § 697.07, it was well settled in this State that a mortgagee was not entitled to any of the rents and profits derived from the mortgaged property unless it had obtained an order of sequestration or actually took possession of the property either by consent or through the appointment of a receiver....

...mortgaged properties are not properties of the estate of the Debtor if the written demand was made for the rent by the mortgagee prior to the commencement of the case. Notwithstanding the liberal language of the Statute, this Court is satisfied that § 697.07 was not intended to constitute a complete derogation of the law that had been well settled in this state....

...Such limited effect of the Statute was recognized by the Court in In re Aloma Square, Inc., 85 B.R. 623, 625 (Bankr.M.D. Fla.1988). In that case, which dealt primarily with the issue of whether the statute applied retroactively, the Court, in dicta, agreed that § 697.07 was procedural in nature, merely codified existing case law, and did not create any new rights: All the statute does is merely change the procedural manner in which an assignment of rents becomes effective....

...Consequently, rather than adding to a mortgagee's substantive rights, the statute simply provides a less cumbersome mechanism to perfect the right to the rents obtained from the mortgaged property. This conclusion is also consistent with the balance of the language contained in § 697.07, which states that: Upon application by the mortgagee, a court of competent jurisdiction may require the mortgagor to deposit such rents in the registry of the court pending adjudication of the mortgagee's rights to the rents, any payments...

...itten demand, there would be no further need of any proceeding or an adjudication of the mortgagee's right to the rents, and the Statute contemplates some further adjudication or *322 determination of the mortgagee's right to the rents. In addition, § 697.07 on its face provides that the rent proceeds shall be utilized to protect the mortgaged property....

...First, the creditor asserts that it has a valid, perfected security interest in the hotel revenues of the debtor by virtue of the duly recorded Wrap Around Mortgage. The creditor argues that the room rates collected by the debtor from the operation of the hotel are rents. In conformity with Florida Statute § 697.07, the creditor asserts that the assignment of rents clause in the mortgage vested the creditor with absolute ownership of the rents following the debtor's default on the loan....

...Goldberg testified that between January 18 and January 23, 1995, he did not know whether the escrow agent would deliver the deed. In addition to its first mortgage, Aetna held a perfected lien on all rents from the center. On January 19, 1995 it invoked its rights under Section 697.07 of the Florida Statutes to require that all rents in Midway's possession or subsequently collected be turned over to Aetna....

...[15] The Plan is also non-confirmable since Midway would pay junior creditors with Aetna's cash collateral as defined in Section 363(a). I find that Aetna holds a duly perfected lien on pre-petition and post-petition rents from the center, and that Aetna effectively invoked its right to receive the rents under Section 697.07 of the Florida Statutes....

...In the case at bar, the Court finds that Flagler obtained the entry of a cash collateral and sequestration order during the bankruptcy proceeding, thereby perfecting its security interest in the rental proceeds of these properties. In addition to Flagler's perfection under Florida common law, Florida Statute, Section 697.07, provides that where an assignment of rents is made with a mortgage the assignment becomes absolute upon the mortgagor's default, operative upon written demand by the mortgagee....

...In its foreclosure suit, Metropolitan Annuity named as Defendants Soltesz/Brandt Development Company, a Florida General Partnership, and Robert R. Krilich, an Individual. Shortly after the commencement of the foreclosure action, Metropolitan Annuity filed, pursuant to Florida Statute 697.07, a motion in the Circuit Court and sought an order requiring the deposit of all rents collected from the shopping center into the registry of the Court....

...Pizzo of Fowler, White, Gillen, Boggs, Villareal and Banker, P.A., Tampa, for appellants. Judith A. English of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa, for appellee. PER CURIAM. These two appeals, which we sua sponte consolidate, emanate from the trial court's ruling that section 697.07, Florida Statutes (1987), should be retroactively applied....

...urity interest in the rents generated from the mortgaged property, together with the right to collect the rents upon default by the debtor. This assignment was executed before the effective date of the statute and thus the issue before us is whether section 697.07, which does not expressly provide for retroactive application, should be nevertheless retroactively applied....

...The trial court's order determined that the statute was remedial in nature and should be applied retroactively. A statute which is either remedial or procedural can be applied retroactively. Department *260 of Agriculture and Consumer Services v. Bonanno, 568 So.2d 24 (Fla. 1990). The statute provides: 697.07 Assignment of rents....

...the mortgagor's lawful obligations in connection with the property. Any undisbursed portion of said rents shall be disbursed in accordance with the court's final judgment or decree. No Florida state court has addressed the issue of retroactivity of section 697.07. There is a split of authority among federal courts on the issue. We agree with the creditor that the court was correct in determining the statute procedural or remedial and thus retroactive. Prior to the enactment of section 697.07, Florida common law provided that a mortgagee was not entitled to any of the rents and profits from the property when it had obtained an order of sequestration or actually taken possession of the property, either by consent or the appointment of a receiver. In re 163rd St. Mini Storage, Inc., 113 B.R. 87 (Bankr., S.D.Fla. 1990). The legislative analysis for House Bill 1153, enacted into law by the legislature as section 697.07, reflects that the drafters were specifically concerned with the problems encountered by mortgagees in enforcing assignment of rent clauses: Despite ......

...ments containing such clauses. Final Staff Analysis, H.B. 1153, p. 108 (June 17, 1987). It is obvious that the drafters were aware of Florida's common law concerning the assignments of rents. The legislative analysis goes on to state that "[s]ection 697.07, Florida Statutes, is created to provide that any mortgage may contain an assignment of rents, and where such assignment is made it shall be absolute upon default of the mortgagor. The assignment shall become operative upon written demand by the mortgagee." Id. From this history, the Court concludes that after recognizing the problems in enforcing assignments of rents under Florida common law, the Legislature enacted § 697.07 for the specific purpose of solving those problems. As a new law, § 697.07 would remedy the enforcement problem by enabling and authorizing the mortgagee to enforce its assignment of rents clause without the need for the foreclosure proceeding. In re 163rd Street Mini Storage, Inc., at 89. In concluding that the statute was procedural, the court in In re Aloma Square, Inc., 85 B.R. 623 (Bankr.M.D.Fla. 1988) stated: Florida Statute § 697.07 does not create any new rights regarding the ability to assign rents....

...All the statute does is merely change the procedural manner in which an assignment of rents becomes effective. *261 This analysis was affirmed by the United States District Court for the Middle District of Florida: This court agrees with the finding of the bankruptcy court that section 697.07 is purely a remedial or procedural statute and, therefore, can be applied retrospectively in the instant case. (Cites). The appellee was not granted any new substantive right by section 697.07; instead, the new statute provides a simplified procedure to enforce an assignment of rents clause....

...uested the court to *828 sequester such rents and profits. [1] The court concluded that the Appellant was not entitled to such proceeds after finding that the Appellee had perfected its interest in such proceeds by complying with the requirements of section 697.07, Florida Statutes. On this appeal, the Appellant is not questioning specifically the court's finding that the Appellee satisfied the requirements of section 697.07 for perfection of an interest in rental proceeds pursuant to an assignment of rents clause. [2] Instead, the Appellant challenges the court's application of section 697.07 to the facts of instant case. The Appellant argues that the issue whether the Appellee perfected its interest in the rental proceeds should have been evaluated pursuant to the common law of Florida, not pursuant to section 697.07. Under the common law which governed mortgage foreclosures in Florida prior to the enactment of section 697.07, a mortgagee became entitled to his mortgagor's rents pursuant to an assignment of rents clause only at such time he takes possession of the property either by consent of the owner or through the appointment of a receiver in a foreclosure proceeding....

...pellee never perfected its interest in the rental proceeds. [3] Accordingly, such proceeds should have remained with the Appellant. The bankruptcy court evaluated the issue whether the Appellee had perfected its interest in the rental proceeds under section 697.07 instead of under Florida common law because it found that section 697.07 should be applied retroactively. The court concluded that the section 697.07 had retroactive application because it is purely a remedial or procedural statute which neither creates, nor takes away, vested rights. The Appellant contends, on the other hand, that section 697.07 effectively abolished its substantive right to use of the rent proceeds. Section 697.07 therefore cannot be applied retrospectively to deprive Appellant of the rental proceeds. The determinative issue on this appeal, therefore, is whether section 697.07 may be given retrospective effect....

...firmation of rights already existing, do not fall within the prohibition against retroactive legislation. City of Lakeland v. Catinella, 129 So.2d 133 (Fla.1961); see also St. John's Village I v. Dep't of State, 497 So.2d 990 (Fla.Dist.Ct.App.1986). Section 697.07, Florida Statutes, provides: *829 A mortgage may provide for an assignment of rents....

...or changes a remedy; a remedy is the means employed in enforcing a right or in redressing an injury." Birnholz, 880 F.2d at 339 (quoting St. John's Village I., Ltd., 497 So.2d at 993). This Court agrees with the finding of the bankruptcy court that section 697.07 is purely a remedial or procedural statute and, therefore, can be applied retrospectively in the instant case. In re Aloma Square, Inc., 85 B.R. at 625; see also In re One Fourth Street North, 103 B.R. 320 (Bankr.M.D.Fla.1989). The Appellee was not granted any new substantive right by section 697.07; instead, the new statute provides a simplified procedure to enforce an assignment of rents clause. In re One Fourth Street North, 103 B.R. at 321; see also In re 163rd Street Mini Storage, Inc., 113 B.R. 87 (Bankr.S.D.Fla.1990) (determining that notice pursuant to section 697.07 was intended to transform the collateral assignment of rents into an absolute assignment, the court nevertheless recognized that the Florida legislature enacted section 697.07 in order to remedy the problems facing mortgagees when attempting to enforce an assignment of rents clause under Florida common law by providing them instead with "a simple, equitable and inexpensive procedure" to enforce such clauses)....

...For the reasons stated herein, the Order of the Bankruptcy Court is AFFIRMED. DONE AND ORDERED. NOTES [1] The Appellee had acquired such interest pursuant to an assignment of rents clause contained in a mortgage granted in the subject property by the Appellant to the Appellee. [2] If section 697.07 is applied to the instant case, then the Appellee, as a mortgagee, perfected its interest in rental proceeds. Prior to the filing of the bankruptcy petition, the Appellee served a written request on the Appellant, the mortgagor, to honor the assignment of rents clause contained in the mortgage. The Appellee therefore satisfied the only requirement under section 697.07 to perfect the proceeds....

...Because the automatic stay prevented any post-petition perfection, the Appellant argues, the Appellee therefore failed to perfect its interest according to the mortgage foreclosure law of Florida as it existed prior to October 1, 1987, the effective date of section 697.07.

...Pizzo and Hala Mary Ayoub of Fowler, White, Gillen, Boggs, Villareal and Banker, P.A., Tampa, for appellants. Judith A. English and J. Gregory Jacobs of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa, for appellee. DAUKSCH, Judge. This is an appeal from an order awarding an assignment of rents pursuant to section 697.07, Florida Statutes (1989)....

...ent of rents and leases. She alleged in her foreclosure complaint that she had served appellant with a written demand letter requesting payment of all rents, incomes, issues, profits and other revenues arising from the mortgaged property pursuant to section 697.07, Florida Statutes (1989)....

...She therefore sought appointment of a receiver and an order requiring appellant to deposit its rents into the court's registry from the date of her demand letter, pending adjudication of her right to the rents. A hearing was held, after which the trial court ruled that section 697.07, Florida Statutes (1989) should be applied retroactively. Appellant was ordered to deposit its rents into the court's registry. Appellant has appealed this order. The issue on appeal is whether the trial court erred by determining that section 697.07, Florida Statutes (1989) should be applied retroactively. This statute provides: 697.07 Assignment of Rents....

...In Nassau Square Associates, Ltd. & SHL Management, Inc. v. Insurance Commissioner of the State of California, Sandalfoot Square Associates, et. al., 579 So.2d 259 (Fla. 4th DCA 1991), the district court affirmed the trial court's determination that section 697.07, Florida Statutes (1987) was remedial in nature and that it should be retroactively applied....

...s common law precluded a mortgagee from obtaining rents and profits pursuant to a sequestration order or when it had taken possession of the property, either by consent or appointment of a receiver. The district court emphasized that the drafters of section 697.07, Florida Statutes (1987) were concerned with mortgagees' problems in enforcing assignment-of-rents clauses....

...seek enforcement of documents containing assignment-of-rents clauses because the mortgagors were entitled to receive rents from property in default until a foreclosure had been completed. The district court concluded that the legislature had enacted section 697.07, Florida *945 Statutes (1987) to remedy the mortgagees' enforcement problems by enabling them to enforce assignment-of-rents clauses without the need of a foreclosure proceeding. The court relied upon the reasoning in In re Aloma Square, Inc., 85 B.R. 623 (Bankr. M.D.Fla. 1988) in which the court stated: Florida Statutes § 697.07 does not create any new rights regarding the ability to assign rents....

...of rents becomes effective. The Nassau court further noted that the foregoing analysis was affirmed in In re Aloma Square, Inc., 116 B.R. 827 (M.D. Fla. 1990) in which the court stated: This court agrees with the finding of the Bankruptcy Court that section 697.07 is purely a remedial or procedural statute and, therefore, can be applied retrospectively in the instant case. The appellee was not granted any new substantive right by section 697.07; instead, the new statute provides a simplified procedure to enforce an assignment of rents clause....

...tnote: Specifically, the amendments to § 702.01, Fla. Stat. (1987), were part of CS for HB 1153 which the legislature enacted during the 1987 session. According to the final staff analysis of the House Commerce Committee, that legislation amended §§ 697.07, 201.022 and 702.01 to create a simple, equitable, and inexpensive method by which a mortgage lender could enforce an assignment of rents contract....

...This footnote is supportive of the Nassau court's interpretation of the statute and of those federal cases which have held that it may be retroactively applied. There is a split of authority among federal courts as to the outcome of the issue presented in this case. There are several federal courts deeming section 697.07, Florida Statutes (1989) remedial in nature and applying it retroactively....

...In Camelot, the court specifically rejected the mortgagee's claim to rents allegedly due under an assignment-of-rents clause after the mortgagors defaulted and filed for bankruptcy. The court found that the Aloma court had mischaracterized the nature of section 697.07, Florida Statutes (1987) as procedural rather than substantive stating: FLA. STAT. s. 697.07 makes all Florida assignments of rents into absolute transfers of the ongoing income stream, enforceable after the mortgagor's default upon the mortgagee's subsequent written demand....

...Moreover, there would be no need for deposit of the rents into the court registry and the mortgagor would not be authorized to pay the operating expenses with the rents. The court characterized this as an absurd result. The trial court's retroactive application of section 697.07, Florida Statutes (1989) should be affirmed because the statute does not operate to impair rights vested before enactment, create new obligations for the parties in a pre-existing legal relationship or impose new penalties on conduct which occurred before enactment....

...FMCC was granted relief from the stay on September 21, 1990. Pursuant to said relief being granted, FMCC filed the instant motion along with a written demand *846 for all the rents and profits received by the debtor. The written demand was made in an attempt to comply with Fla. Stat. § 697.07 (1987). The effective date of said statute is October 1, 1987. CONCLUSIONS OF LAW Section 697.07 provides in part that a mortgage may contain "an assignment of rents" . . . which becomes "absolute upon the mortgagor's default, becoming operative upon written demand made by the mortgagee." Fla.Stat. § 697.07 (1987). FMCC argues that the proper recording of its' mortgage on the debtor's property perfected the security interest in the rents and profits of the hotel. It further argues that § 697.07 cited above specifically provides for perfection without the need to file a separate U.C.C. financing statement with the Secretary of State. The Trustee argues that § 697.07 does not apply because it became effective after the execution and recordation of the mortgage in question and that the statute is not to be given retroactive effect....

...D.Okla.1988); but see, In re Mid-City Hotel Associates, 114 B.R. 634 (Bkrtcy.D. Minn.1990). This Court agrees with the holdings of the majority cases cited above and holds that the debtor's revenues from hotel room sales is an account receivable rather than rent from real property and that § 697.07 does not apply....

...Under Florida law, the filing of a financing statement with the Secretary of State is necessary to perfect a security interest in accounts receivable. Fla.Stat. § 679.302 (1989). As FMCC has not filed such a statement it is not perfected. The holding that § 697.07 does not apply pretermits a finding on the retroactivity of the statute....

...sure action. DONE AND ORDERED. NOTES [1] Glendale took the position their properly recorded assignment of rents from the Debtors was absolute. Therefore, Debtors had no interest in the rents. Such a position is suggested by the language in Fla.Stat. § 697.07....

...To read the statute regarding assignments of rent as Glendale would wish would create a forfeiture within the lien context without a judicial foreclosure which is required by Florida law. Carolina Portland Cement Corp. v. Baumgartner, 99 Fla. 987, 128 So. 241 (1930); Fla.Stat. § 702.01. Fla.Stat. § 697.07 does nothing more than dispel the necessity of a mortgagee to seek a receiver to protect rents....

...("Mevabi") on or about November 20, 1985 (the "Second Mortgage Loan"). The current principal balance due under the Second Mortgage Loan is approximately $1,186,284. On or about August 19, 1992, Frankel sent Ameriswiss a letter purporting to demand payment of the Rents pursuant to Fla.Stat. § 697.07....

...CONCLUSIONS OF LAW The bases for Frankel's opposition to Ameriswiss's motion are that (i) this Court *351 lacks jurisdiction over the Rents because Ameriswiss is neither the legal nor equitable owner of the Property; and (ii) by virtue of the demand made by Frankel under Fla.Stat. § 697.07 (1991), there was an absolute transfer of the Rents to Frankel prior to the Petition Date....

...h the bankruptcy laws. *352 Id. [3] Accordingly, pursuant to both the terms of the Trust and applicable decisional law, the Rents are property of Ameriswiss's bankruptcy estate. 11 U.S.C. § 541. (B) Notice was given by Frankel pursuant to Fla.Stat. § 697.07 (1991) Fla.Stat. § 697.07 (1991) provides that: A mortgage may provide for an assignment of rents....

...ffective since Frankel served the notice on the Debtor and not on the Trustee/mortgagor. However, the Court having concluded that the Rents are property of the Debtor's estate, notice to the Debtor alone would be sufficient for purposes of Fla.Stat. § 697.07....

...Rather, the Debtor argues that such payment was excused by virtue of Frankel's conduct in acquiring the First Mortgage Loan from Mellon. Whether that is so will presumably be determined in the Ameriswiss Action. The fact that the payment was not made is all that is relevant to the applicability of Fla.Stat. § 697.07. Accordingly, the Court deems that notice was given by Frankel to Ameriswiss pursuant to Fla.Stat. § 697.07. (C) Fla.Stat. § 697.07 (1991) effects an absolute transfer of rents This Court has previously held that Fla.Stat. § 697.07 "is intended to create an absolute transfer of the income stream to the mortgagee, upon default and written demand to the mortgagor." In re 163rd Street Mini Storage, Inc., 113 B.R....

...mediate appellate courts in Nassau Square Associates, Ltd. v. Insurance Comm'r of State of Cal., 579 So.2d 259 (Fla. 4th DCA 1991), and Oakbrooke Associates, Ltd. v. Insurance Comm'r of State of Cal., 581 So.2d 943 (Fla. 5th DCA 1991). (D) Fla.Stat. § 697.07 (1991) is substantive and, therefore, is not retroactive While Fla.Stat. § 697.07 engenders a notice-type procedure triggering an absolute transfer of ownership of rents upon demand, the effect of the statute is to change the substantive property rights of an assignor and assignee in respect of assigned rents....

...ect. In re Camelot Associates Ltd. *353 Partnership, 102 B.R. 161, 165-166 (Bankr. D.Minn.1989). It is axiomatic under Florida Constitutional law that a statute affecting substantive rights cannot be applied retroactively, and accordingly, Fla.Stat. § 697.07 does not govern the enforcement of assignment of rents prior to its effective date (i.e., October 1, 1987). In re Thymewood Apartments, Ltd., 129 B.R. 505, 512 (Bankr.S.D.Ohio 1991); Accord Camelot Associates, supra . Accordingly, the Court concludes that the notice given by Frankel to Ameriswiss pursuant to Fla.Stat. § 697.07 was ineffectual to create an absolute transfer of the Debtor's interests in the Rents to Frankel inasmuch as the Assignment of Rentals and Leases and all supplements thereto were executed by the Debtor in favor of its first mortgage lender prior to the effective date of the statute. (E) Frankel's interest in rents is determined by reference to applicable common law Having concluded that Frankel's notice pursuant to Fla.Stat. § 697.07 was ineffectual in creating an absolute transfer of the Debtor's interest in the Rents since the statute post-dates the operative contracts of assignment, Frankel's rights in the Rents is governed by applicable common law. In re 163rd Street, supra at 88-89; White v. Anthony Inv. Co., 119 Fla. 108, 160 So. 881, 882 (1935). Prior to the enactment of Fla.Stat. § 697.07, Florida common law provided that an assignee of rents was not entitled to any of the rents and profits derived from the property unless it had obtained an order of sequestration or actually taken possession of the property, either by consent or the appointment of a receiver....

...perty is $4,500,000. 16. On October 31, 1988, the mortgage note to Investors matured according to its terms, and debtor failed to pay the amount due at maturity. 17. On November 14, 1988, Investors made written demand on debtor for rents pursuant to § 697.07, Florida Statutes, predicated upon the mortgage to Investors which included an assignment of rents....

...ssuming the speculative testimony regarding the unpaid taxes is correct, the standard outlined in Smith is not present. Beneficial attempts to justify its appointment as receiver in both cases by raising, *751 for the first time in its answer brief, section 697.07, Florida Statutes (1987), which allows for a court to require the mortgagor to deposit rents in the registry of the court pending adjudication of the mortgagee's rights to the rent....

...tly to Beneficial. While falling under a literal reading of the rule, we doubt that the harm imposed on the defendant here is the type which requires an immediate interlocutory appeal, since the only property "possessed" is in the form of money. [2] Section 697.07, Florida Statutes (1987), effective October 1, 1987, provides as follows: 697.07 Assignment of rents....

...Taylor, III, and Nancy W. Gregorie of Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A., Fort Lauderdale, for appellees. GRIFFIN, Judge. We affirm the appealed order; however, we do so not on the basis articulated in the lower court's order but on the basis of § 697.07, Florida Statutes (1993)....

...of the mortgagee's written demand, as well as those collected thereafter. The statute also specifies more clearly the procedure for the contestants to obtain an order sequestering rents subject to assignment pending litigation. Appellant urges that § 697.07, Florida Statutes (1993) cannot require sequestration of rents collected by the mortgagor prior to enactment of the statute....

...assignment clauses and of agreements for appointment of a receiver was statutory, in that Florida law denied the power of a mortgage instrument to convey away the mortgagor's right of possession. Carolina Portland, 128 So. at 249. The amendments to section 697.07 have removed any perceived statutory impediment to enforcement of rent assignment clauses and have provided a simple procedure for enforcement of the assignment. Oakbrooke, 581 So.2d at 943. The 1991 version of section 697.07 plainly intended to give effect to the parties' agreement to assign rents by allowing sequestration before the mortgagee obtained possession of the mortgaged property. Application of this statute to mortgages that predated the amendment was validated in Oakbrooke, 581 So.2d at 946. As Oakbrooke pointed out, section 697.07 does not purport to cause the transfer of an ownership interest in rents, merely to establish procedures designed to give effect to the parties' rent assignment agreement....

...ges from the two guarantors. Orlando Hyatt filed an answer and counterclaims. Simultaneously with the service of its complaint, the FDIC also served its Motion Seeking the Appointment of a Receiver and *976 to Compel the Deposit of Rents pursuant to section 697.07, Florida Statutes....

...In this motion, the FDIC requested "an order of this court ... compelling the deposits of rents, incomes, profits and accounts receivables into the Registry of this court." Orlando Hyatt responded with a motion to strike the motion to compel rents in which it urged that section 697.07, Florida Statutes, is inapplicable to revenues generated from the operation of a hotel. At the hearing, the trial court agreed with Orlando Hyatt that section 697.07, the assignment of rents statute, [2] does not apply to hotel revenues....

...case, rather than in a corporate capacity. We agree with Orlando Hyatt and reverse that portion of the court's order that permits the excess funds to be turned over to the FDIC and applied to its mortgage. The parties and the trial court agree that section 697.07, the assignment of rents provision, does not apply to hotel revenues. This leaves other statutory and Florida case law. Prior to the enactment of section 697.07, Florida courts acknowledged that a mortgagor may pledge rents and profits from realty, but such a pledge does not become practically effective until the court either appoints a receiver or the mortgagee goes into actual possession....

...Anthony Investment Co., 119 Fla. 108, 160 So. 881 (1935); Carolina *977 Portland Cement Co. v. Baumgartner, 99 Fla. 987, 128 So. 241 (1930); In re Aloma Square, Inc., 85 B.R. 623 (Bankr.M.D.Fla. 1988). Although this case law no longer applies to long-term rents in light of section 697.07, it still applies to assignment of profits such as hotel revenues....

...sale... . The parties are not permitted to subvert this requirement by entering into a separate assignment of rent agreement, for as long as that assignment secures a debt, it is deemed subject to the rules of foreclosure. (emphasis added). Although section 697.07 amends this rule as it applies to long-term rents, there is no similar statutory provision governing hotel revenues/profits, and therefore, the rule still applies in cases involving these types of funds....

...REVERSED and REMANDED for further action consistent with this opinion. W. SHARP and THOMPSON, JJ., concur. NOTES [1] We reject the contention that Orlando Hyatt Associates, Ltd. lacks standing to pursue this appeal. We have not considered Orlando Hyatt's due process argument because of our ruling in the appeal. [2] Section 697.07 provides: 697.07 Assignment of rents....

...sequent monthly installment payments. On May 6, 1991, Lincoln made written demand upon Maricamp (the "Rent Demand") for, inter alia, the rents, proceeds and profits arising from or connected with the Property (collectively, the "Rents"), pursuant to Section 697.07, Florida Statutes, the Mortgage, and the Assignments of Rents and Leases....

...The foreclosure complaint included a request for the appointment of a receiver. After the foreclosure suit was filed, WHC moved the trial court to sequester the rents received from the tenants of the shopping center. In March of 1995, the trial court granted the motion pursuant to section 697.07, Florida Statutes (1995)....

...he loan and security instruments executed by the Debtors in favor of Citizens Federal and Ocean State. Debtors defaulted under each of the Notes by failing to pay them in full on the maturity dates. In June, 1990, by separate letters and pursuant to section 697.07, Florida Statutes, and the terms of the Mortgages, C & S demanded that all rents received by the Debtors from the properties subject to the mortgages, including the sub-lease, be turned over to C & S. The Debtors did not comply and filed their petitions for relief under Chapter 11 on February 6, 1991. The paramount issue that the Court must address is whether or not under 11 U.S.C. § 363(a) and Florida Statutes § 697.07 the rent proceeds from the sub-lease are cash collateral....

...interest prior to the commencement of this case, creating a pre-petition security interest in both the HRS building and the rents from the sublease. Such security interest continues post-petition and secures the full amount of the consolidated debt. Section 697.07, Florida Statutes, provides in pertinent part: A mortgage may provide for an assignment of rents. If such assignment is made, such assignment shall be absolute upon the mortgagor's default, becoming operative upon written demand made by the mortgagee. C & S has satisfied the requirements of § 697.07 by making a pre-petition written demand on the Debtors to deliver all rental proceeds received under the HRS sub-lease to C & S. Under 697.07 C & S's written demand following the default effected an absolute transfer of the ownership of the rents from the Debtors to C & S prior to the date of the petition....

...First Union contended that EGYB failed to comply with the terms of the stipulation. It then sent EGYB a demand letter ordering that EGYB comply within 15 days. On the same date, First Union sent EGYB another demand letter pursuant to Florida Statutes, section 697.07 (1991) [1] requiring EGYB to relinquish all rents generated from the marina....

...B to present evidence to the contrary. Even if First Union's accusations are true, the court's failure to allow EGYB to present testimony and other evidence on the matter was error. REVERSED and REMANDED. DAUKSCH and PETERSON, JJ., concur. NOTES [1] Section 697.07, Florida Statutes (1991) states in relevant part: A mortgage may provide for an assignment of rents....

...The Note and Mortgage, as modified, have been in default since August 1, 1990. 5. The rents, income and profits attributable to the property were absolutely transferred to Waters upon default and written demand to the Debtor herein, pursuant to Florida Statute § 697.07 (1989)....

...914, 59 L.Ed.2d 136 (1979), the Supreme Court concluded that the rights to rents and profits derived from mortgaged property is to be determined by the laws of the state in which the property is located rather than by Federal law. Florida statute *913 § 697.07 (1989) provides in pertinent part as follows: "A mortgage may provide for an assignment of rents. If such assignment is made, such assignment shall be absolute upon the mortgagor's default, becoming operative upon written demand made by the mortgagee." Based on the Debtor's default and Waters compliance with the provisions of § 697.07 the Assignment of Rents and Leases became an absolute transfer of the income stream to the mortgagee. In re 163rd Street Mini Storage, Inc., 113 B.R. 87 (1990). In accordance with the foregoing findings of fact, Water's compliance with Florida Statute § 697.07 (1989); and this Court's decision....

...This is a Chapter 11 case in which I must determine whether rents generated from the Debtor's shopping center are property of the estate. The answer depends upon whether the mortgagee's pre-petition demand for turnover conveyed ownership of the rents to the mortgagee under § 697.07 of the Florida Statutes....

...Meritor contends that under the promissory note and mortgage, the principal sum of $4,518,745.16 was owed as of the filing date. On or about August 23, 1990, Meritor asserted, by letter, that Shoppes was in default of its obligations under the note. Pursuant to Fla.Stat. § 697.07, Meritor demanded that all rents thereafter received by Shoppes or rental proceeds currently held in Shoppes' possession be paid over to Meritor....

...with respect to the amount, validity or priority of Meritor's claim nor its right to foreclose upon its mortgage on the shopping center. Rather, my decision relies upon the following undisputed facts: 1. Meritor exercised its rights under Fla.Stat. § 697.07 and demanded turnover of the rents prior to the bankruptcy; 2....

...Prior to the filing of the bankruptcy, the state court had not adjudicated Meritor's rights to the rents. These key facts frame the issue — Were the rents property of the estate when the Chapter 11 began? DISCUSSION The controversy stems from the use of the word "absolute" in § 697.07, the assignment of rents statute adopted by the Florida legislature in 1987....

...By using this word, did the legislature intend to foreclose a borrower's rights to the rents for all time, for all purposes and without further adjudication once written demand was served by the mortgagee? My analysis begins with the statute and its legislative history. Fla.Stat. § 697.07, provides that: A mortgage may provide for an assignment of rents....

...hands of the borrower. In re Executive Square, Ltd., 77 B.R. 303 (Bankr.S.D.Fla. 1987), citing and quoting from the Florida Supreme Court's decision in White v. Anthony Inv. Co., 119 Fla. 108, 160 So. 881 (1935). The legislative history of Fla.Stat. § 697.07, cited by the parties here and discussed in various reported cases interpreting the statute, is contained in the Final Staff Analysis for House Bill 1153, dated June 17, 1987 (the "Staff Analysis")....

...Based upon the history, the court concluded that the new law "would remedy the enforcement problem by enabling and authorizing the mortgagee to enforce its assignment of rents clause without the need for the foreclosure proceeding." 113 B.R. at 89. Consistent with this view, the court held that § 697.07 creates an absolute transfer of the income stream upon default and written demand such that the rents are not property of the estate upon a subsequent bankruptcy filing....

...The 163rd Street decision was cited and followed in a lengthy appellate opinion written by United States District Judge Kinneary in In re Thymewood Apartments, Ltd., supra, 123 B.R. at 969. In the decision on appeal, the bankruptcy court concluded that § 697.07 was not meant to provide for an absolute transfer *1021 of ownership rights in rents upon default by a debtor....

...The district court disagreed and reversed holding that the statute does create a transfer of ownership of the rents upon default and demand. The Thymewood court analyzed the language of the statute, the legislative history and case authority and concluded that § 697.07 creates an ownership right in rents for a mortgagee....

...Nevertheless, he could not accept the argument that use of the word "absolute" could mean anything other than full ownership: [G]iven the clear meaning of the word `absolute' and the Florida Legislature's presumed knowledge of that meaning, the mortgagor's argument that its use in section 697.07 was a mere malapropism is untenable....

...320 (Bankr.M.D.Fla.1989), Judge Paskay held that the rents remained property of the estate and that the statute does not grant the mortgagee an absolute right of ownership: Notwithstanding the liberal language of the statute, this Court is satisfied that § 697.07 was not intended to constitute a complete derogation of the law that had been well settled in this state....

...pplied retroactively. In a per curiam opinion, the court affirmed finding that retroactive application is proper since the statute is remedial in nature. In this case, Meritor argued both in its written memoranda and in oral argument, that Fla.Stat. § 697.07 created new substantive rights for mortgagees....

...The opposite result would be illogical, particularly applied to the facts in this case. Before filing its Chapter 11 petition, Shoppes was able to utilize the rents, with permission of the state court, "to protect the mortgaged property and meet the mortgagor's lawful obligations in connection with the property." Fla.Stat. § 697.07....

...SCOPE OF DECISION In finding that the rents here are property of the estate, I do not hold that the statute could never convey absolute ownership. For example, the result might be different in a case in which the borrower responded to a pre-petition demand under § 697.07 by voluntarily paying the rents to the mortgagee rather than into the state court registry....

...de proper written demand under the statute. I do not decide that issue because there was no preliminary or final adjudication in the state action prior to the Chapter 11 filing in this case. CONCLUSION In cases where pre-bankruptcy implementation of § 697.07 results in the deposit of rents into the state court registry and there has been no preliminary or final adjudication of the mortgagee's rights by the state court, the rents in the state court registry and the future stream of rents are property of the estate upon filing of a Chapter 11....

...An assignment of rents is additional security for the lender, and creates a lien against the rental income. The right to collect the rents remains with the debtor until judicial foreclosure and sale. In re Aloma Square, Inc., 85 B.R. 623 (Bkrtcy.M.D.Fla.1988). Prior to the enactment of Section 697.07, Fla.Stats., under Florida common law, a lender was not entitled to the rents until it obtained an order of sequestration through the appointment of a receiver in a foreclosure proceeding or by taking possession of the property. In re Johnny Parham, 72 B.R. 604 (Bkrtcy.M.D.Fla.1987). Florida's new statutory provision governing assignment of rents, Section 697.07, (Fla.Stat.1987), provides: Assignment of rents.—A mortgage may provide for an assignment of rents....

...AmSouth's position is arguably supported by the decision in In re Camelot Associates Ltd. Partnership, 102 B.R. 161 (Bkrtcy.D.Minn.1989). Although AmSouth did not cite this case, the Minnesota bankruptcy court literally interpreted Florida Statute 697.07 in finding a mortgagee's right to receive rents "absolute and unconditional" once default occurs and demand is made....

...for a "final judgment or decree" to determine the allocation of rent. Better reasoned is the decision by the Bankruptcy Court for the Middle District of Florida, in In re One Fourth Street North, Ltd., 103 B.R. 320 (Bkrtcy.M.D.Fla.1989), recognizing Section 697.07, Fla.Stats., "was not meant to create an outright or absolute transfer of ownership interest in rents where none existed before," it merely "change[s] the procedural manner in which an assignment of rents becomes effective." In re One Fourth Street North, Ltd., supra, 103 B.R....

...Under AmSouth's interpretation, even if the mortgage was paid in full, the lender would still be entitled to receive the rental income. This strained construction contradicts the plain language of the statute, which defers a determination of "the mortgagee's right to the rents" until "the court's final judgment or decree." Section 697.07, Fla.Stats. Prior to the petition in this case, AmSouth demanded payment of the rents in accordance with Section 697.07, Florida Statutes, and thereby perfected a security interest in rents obtained from the mortgaged property....

...1989)(The transfer reduced the debtor's contingent liability on a guaranty, and the debtor therefore received reasonably equivalent value.) In this case, it is undisputed that the Debtor owed the Defendants in excess of $6,693,567.50 pursuant to the Mortgage and Mortgage Notes executed in 1982. Pursuant to § 697.07, Florida Statutes, the state court authorized the use of the rents to pay reasonable expenses to protect, preserve, and operate the property, and required the mortgagor to deposit the net rents into a designated depository....

...conclusion of the action in accordance with the court's final judgment or decree." Finally, that statute provides that upon receipt of the actual rents, the Defendants are required to apply the amount received to reduce the indebtedness owed to it. Section 697.07 of the Florida Statutes provides in part: Chapter 697. Instruments Deemed Mortgages and the Nature of a Mortgage 697.07....

...r in the proof of claim filed by the Defendants in this chapter 11 case. *836 The Debtor's contention in this regard does not change the Court's conclusion. The Final Judgment of Foreclosure declared that the Defendants were the owners of the rents. Section 697.07(8), Florida Statutes, provides that any of the rents received by the mortgagee shall be applied in accordance with the documents, and that the mortgagee shall account to the mortgagor for such application....

...Sav. & Loan Ass'n of Panama City, 516 So.2d 344 (Fla. 1st DCA 1987). Third, we conclude that the trial court erred in refusing to order the mortgagor Ronald S. Molko to assign the rents collected on the mortgaged property to the registry of the court. Section 697.07, Florida Statutes (1989), provides that a mortgage may provide, as here, for an assignment of rents, and that if so, the "assignment shall be absolute upon the mortgagor's default, becoming operative upon written demand by the mortgagee." In the instant case, the mortgagor Ronald S....

...The Third District Court of Appeal, however, concluded that the statute only “create[d] a lien on the rents in favor of the mortgagee,” and that “[i]n order to reduce that lien to possession, [the mortgagee] was required to foreclose on the lien.” Id. at 498 (applying Fla. Stat. § 697.07)....

...nkruptcy petition. The Court determined that all of the rents and profits generated from the shopping centers were the property of the mortgagee and not cash collateral inasmuch as the mortgagee had properly perfected its assignment pursuant to F.S. § 697.07....

...The Court granted the mortgagee relief from the automatic stay in order to permit the continuation of the foreclosure proceeding in the state court. On the state court level, the debtor moved for the rents to be placed in the court's registry pursuant to F.S. § 697.07....

...the right and opportunity of the vendor of the personal property to repossession in the event of a default). The trial court also granted summary judgment on counts 7 through 10 and 12 through 14, which are all based on appellants' claim that under section 697.07(3), Florida Statutes (1991), as successors to the assignment of rents, they are entitled to receive all rents derived from the mortgaged property from the date of demand in 1989....

...(count 8), common law conversion of rents (count 9), fraudulent transfer of rents (count 10), unjust enrichment from rents (count 12) and civil theft of rents under Florida's RICO (count 13). *779 In a prior appeal in this case, this court held that section 697.07 of the Florida Statutes (1991), which governs the assignment of rents and the right to possession of rents upon default, "plainly embraces all rents in the possession of the mortgagor at the time of the mortgagee's written demand, as w...

...See also Oakbrooke Associates, Ltd. v. Insurance Commissioner of State of California, 581 So.2d 943 (Fla. 5th DCA 1991). In Ginsberg v. Lennar Florida Holdings, Inc., 645 So.2d 490, 497 (Fla. 3d DCA 1994), rev. denied, 659 So.2d 272 (Fla.1995), the court held that, although section 697.07 gives a mortgagee with an assignment of rents a right to pursue his or her remedies automatically upon default after a written demand for rents, the demand for rents does not transfer title to the rents, but only affords a right to bring an action to foreclose on the rent....

...reclosure proceedings. Admittedly here, the trial court was not addressing a motion for summary judgment. However, in seeking an assignment of rents otherwise payable to Wane, U.S. Bank was legally obligated to comply with the terms of the Rider and section 697.07, Florida Statutes (2012), which requires U.S. Bank to prove its entitlement to such an assignment. It complied with neither. Section 697.07 is entitled “Assignment of rents,” and it “establish[es] procedures designed to give effect to the parties’ rent assignment agreement.” Or-mond Beach Assocs....

...5th DCA 1994); see also Ginsberg v. Lennar Fla. Holdings, Inc., 645 So.2d 490, 498 (Fla. 3d DCA 1994) (stating that “a mortgagor and mortgagee are free to contract for an assignment of rents, and enforcement of that assignment will be governed by [section 697.07]”). Section 697.07 draws a clear line between a motion seeking sequestration of rents into the court registry and a motion seeking an actual assignment of rents to the lender pending foreclosure. Compare § 697.07(4) (dealing with sequestration of rents into the court registry), with § 697.07(3) (dealing with the assignment and collection of rents by the lender)....

...e to find an abuse of discretion. But the court did not order sequestration. Instead, it ordered an assignment of rents directly to U.S. Bank without any competent evidence that U.S. Bank had made either a written demand for the rents as required by section 697.07(3) or given written notice of default as required by paragraph H of the Rider....

...Accordingly, we reverse the order granting the assignment of rents and remand for further proceedings. On remand, the trial court may either order sequestration of the rents, including the rents already received, into the court registry pursuant *935 to section 697.07(4) or it may hold additional proceedings to give U.S. Bank an opportunity to prove that it is entitled to an assignment of rents under section 697.07(3) and paragraph H of the Rider....

...nts and incomes derived and generated by the property encumbered *107 by the mortgage. Florida Federal perfected its rights under the assignment prior to the commencement of this bankruptcy case by making demand upon the Debtor pursuant to Fla.Stat. § 697.07....

...The mortgage provided for the appointment of a receiver and contained an assignment of rents clause. Kraus-Anderson requested the court to appoint The Seasons' current property manager as the *61 receiver. The Seasons did not oppose an order to deposit the rents pursuant to section 697.07, Florida Statutes (1995), but it did object to being divested of control of its property....

...ceiver. Alafaya Square Assoc. v. Great Western Bank, 700 So.2d 38 (Fla. 5th DCA 1997) (footnote omitted). Similarly, The Seasons is applying all of the net rental income to the mortgage debt. Moreover, as in Alafaya Square, Kraus-Anderson may invoke section 697.07, Florida Statutes (1995), to enforce the assignment of rents clause in the mortgage and require The Seasons to deposit the rents into the registry of the court....

...all of the terms and conditions of the 1986 Loan Documents. Amerifirst subsequently went into receivership, and the Resolution Trust Company (the “RTC”), acting in its capacity as Receiver, made a pre-bankruptcy implementation of Florida Statute Section 697.07 (“Section 697.07”) on or about September 9, 1991....

...Judge Marko entered the Sequestration Order based on the RTC’s assertion in its motion that the RTC had a perfected lien upon the rents and profits by reason of the 1986 Loan Documents and the RTC’s written demand for payment of the rents pursuant to Section 697.07....

...CONCLUSIONS OF LAW The bases for Lennar’s opposition to RIVER OAKS’ Motion to Use Cash Collateral are that: 1. The Assumption Agreement, executed in November, 1987, created a novation which brought the 1986 loan documents within the purview of Section 697.07; and 2. The RTC’s pre-bankruptcy implementation of Section 697.07 created an absolute transfer of the Rents to Lennar. The Court disagrees. This Court continues to adhere to the opinion that Section 697.07 is intended to create an absolute transfer of the income stream to the mortgagee, upon default and written demand to the mortgagor. In re 163rd Street Mini Storage, Inc., 118 B.R. 87 , 90 (Bankr.S.D.Fla.1990). Inasmuch as Section 697.07 effects a substantive change from the common law with respect to the property rights of an assign- or and assignee to assigned rents, the statute cannot be applied retroactively pursuant to Florida constitutional law....

...The precise question presented is whether the Assumption Agreement constituted a novation which extinguished the 1986 Loan Documents and reincorporated the terms and conditions therein into a document originating in November, 1987 and within the effective date of the Section 697.07....

...’s counsel and a representative of RIVER OAKS. Accordingly, the Court concludes that the operative loan documents from which Lennar derives an interest in the Rents originated in 1986 and therefore do not come within the purview of Florida Statute 697.07 (1991) which has an effective date of October 1, 1987. The execution of the Assumption Agreement on November 13, 1987 did not constitute a novation, but merely evidenced the parties’ intention to supplement and amend the 1986 Loan Documents. Having concluded that the RTC’s notice pursuant to Section 697.07 was ineffectual in creating an absolute transfer of the Debtor’s interest in the Rents since the Statute post-dates the operative contracts of assignment, Lennar’s rights in the Rents are governed by applicable common law....

...James M. McCann, Jr., and Elizabeth L. Cocanougher, Mershon, Sawyer, Johnston, Dunwody & Cole, West Palm Beach, for appellee First Union. DOWNEY, Judge. This is an appeal of a non-final order denying the appellant, Johnny Williams', motion to declare section 697.07, Florida Statutes (1989), unconstitutional and thereby requiring him to deposit certain funds into the registry of the court....

...ult. He also assumed the obligations of the assignor under a collateral Assignment of Leases and Rents. Williams failed to make the payments for three months, causing First Union to give written notice of the default and demand for rents pursuant to section 697.07, Florida Statutes (1989)....

...During the pendency of the foreclosure action First Union filed a verified motion to require the deposit of rents into the court's registry pursuant to prescribed procedures for the deposit, withdrawal and use of the rents. Williams objected to the motion and asked the court to declare section 697.07 unconstitutional on the ground that it conflicts with Florida Rule of Civil Procedure 1.600. The trial court denied Williams' motion to declare the statute unconstitutional and granted First Union's motion to deposit the rents into the court's registry. The pertinent statute and rule of procedure involved herein are: Section 697.07, Florida Statutes (1989), which provides: Assignment of rents....

...h the court upon notice to every other party and by leave of court. Money paid into court under this rule shall be deposited and withdrawn by order of court. According to the parties, this is a case of first impression since the constitutionality of section 697.07 has not heretofore been considered....

...y, but not an order compelling payment into the court, citing Law v. NCNB National Bank of Florida, 452 So.2d 1119 (Fla. 4th DCA 1984), and Leon v. Franchise Stores Realty Corp., 549 So.2d 822 (Fla. 4th DCA 1989). However, Williams argues that, when 697.07 is enforced, it compels the trial courts of this state to automatically deposit rents into the Registry of the Court....

...vil procedure, which itself permits judicial discretion in the severance of counterclaims. Of course, the statute was unconstitutional under those circumstances since there was a conflict between the statute and the rule. In comparing Rule 1.600 and section 697.07 we find no such conflict that would render the statute unconstitutional....

...The court in Leon and in Law v. NCNB National Bank of Florida , held the court had no authority to order a party to involuntarily deposit money into the court registry because no authority existed for such action. That authority has now been granted by the legislature via section 697.07....

...Williams also contends that the statute is unconstitutional because, when enforced, it is in the nature of an injunction preventing the mortgagor from utilizing the funds prior to the rendering of a judgment. We find no merit in this argument. Accordingly, we hold section 697.07, Florida Statutes (1989), constitutional and affirm the order of the trial court....

...chose. Clearly, that is not the state court's ruling in its order of May 29. There has been no absolute assignment of rents to Investors. [3] Moreover, this interpretation of the state court's order comports with the widely recognized application of Section 697.07 of the Florida Statutes. Section 697.07 of the Florida Statutes provides: A mortgage may provide for an assignment of rents....

...rty. Any undisbursed portion of said rents shall be disbursed in accordance with the court's final judgment or decree. There has been a dichotomy in the case law interpreting this statute, in part because federal courts were called upon to interpret Section 697.07 without the benefit of any state court's interpretation of the statute. Some federal courts have determined Section 697.07 does, indeed, effect an absolute transfer of ownership. See, e.g., In re Thymewood Apartments, 123 B.R. 969 (S.D.Ohio 1991); In re Carter, 126 B.R. 811 (Bankr.M.D.Fla.1991); In re 163rd Street Mini Storage, 113 B.R. 87 (Bankr.S.D.Fla. 1990). Other federal courts have determined Section 697.07 only provides an enforcement mechanism for assignment of rents clauses and no absolute assignment takes place....

...M.D.Fla.1990); In re Shoppes of Hillsboro, 131 B.R. 1018 (Bankr.S.D.Fla.1991); In re Mariner Enterprises of Panama City, 131 B.R. 190 (Bankr.N.D.Fla.1989); In re One Fourth Street North, Ltd., 103 B.R. 320 (Bankr.M.D.Fla.1989). Now, however, Florida state courts have interpreted Section 697.07 and have determined Section 697.07 does not transfer ownership of the rents to the mortgagee, but merely provides a mechanism enabling mortgagees to enforce assignment of rents clauses without the need of a foreclosure proceeding. See Oakbrooke Associates v. Insurance Commissioner of California, 581 So.2d 943 (Fla. 5th DCA 1991) (Fla.Stat. § 697.07 can be applied retroactively because it is remedial in nature and does not effect a party's substantive rights by creating an absolute transfer of ownership interests in rents in the mortgagee), and Nassau Square Associates v. Insurance Commissioner of California, 579 So.2d 259 (Fla. 4th DCA 1991) (Fla.Stat. § 697.07 does not result in an absolute transfer of the rent to the mortgagee)....

...ses. [4] Contrary to Investors assertion that two Florida state court decisions hold the mortgagee is entitled to absolute ownership of rents, Federal Home Loan Mortgage Corp. v. Molko, 584 So.2d 76 (Fla. 3d DCA 1991), merely holds that at a minimum § 697.07 requires a mortgagor to deposit rents into registry of court and thus the mortgagee's motion to require the mortgagor to assign all rents collected to either the court-appointed receiver or the court registry should not have been denied, and Executive Square, Ltd....

...Delray Executive Square, Ltd., 546 So.2d 434 (Fla. 4th DCA), rev. denied, 554 So.2d 1167 (Fla.1989), a per curiam opinion, holds that the trial court did not exceed its jurisdiction by requiring the mortgagor to deposit rents into the registry of the court pursuant to § 697.07.

...cted lien in all rents derived from the Mortgaged Properties pursuant to the Assignments of Rent and that: It is expressly determined that Seaboard has an absolute ownership interest in and to said rental revenues in accordance with Florida Statutes § 697.07....

...The Debtor filed his Petition under Chapter 11 of the Bankruptcy Code on May 7, 1993 which, of course, stopped all further action against the real properties involved. Based on the foregoing, Seaboard asserts that, pursuant to the Final Judgment and Florida Statute 697.07, it is now the owner of the rents and all the rent collected ceased to be property of the Debtor's estate, therefore, the request for all *251 rents collected and all rents owing to Seaboard should be granted. It is well established that property rights are determined by local and not by federal law. Butner v. United States, 440 U.S. 48, 56, 99 S.Ct. 914, 918, 59 L.Ed.2d 136 (1979). Florida Statute § 697.07 (1989) provides: A mortgage may provide for an assignment of rents....

...ee. (Emphasis added) This Court in In re One Fourth Street North, Ltd., 103 B.R. 320 (Bankr.M.D.Fla. 1989), held that the Debtor was authorized to use the rent as cash collateral to maintain operating expenses of the property. This Court stated that § 697.07 was not meant to create an outright transfer of ownership interest in rents where none existed before, but to create a more simplified mechanism for perfection of the right to sequester rents to be applied to the indebtedness secured by the mortgage and was intended to be nothing more than additional security. This Court explained that this now can be accomplished upon written demand for the rent without necessity of any court proceedings, the statute changing the procedural manner in which an assignment of rents becomes effective. The Court held that § 697.07 contemplates further judicial proceedings requiring a determination of the mortgagee's right to the rents....

...tender the payments in accordance with the final judgment. In view of the foregoing, based on the Debtor's default and entry of Final Judgment divesting the Debtor of any interest he had in the rents, and Seaboard's compliance with the provisions of § 697.07, the Assignment of Rents operated as an absolute transfer of the income stream to the mortgagee prior to the filing of the Bankruptcy Petition....

...uptcy Code. The Creditors assert that the Final Judgment has preclusive or collateral estoppel effect with respect to the ownership of the rents, and that ownership of the rents passed to the Creditors when the Final Judgment was entered pursuant to section 697.07 of the Florida Statutes....

...Also on August 12, 1996, the Creditors filed a Motion for Appointment of Receiver and Alternative Motion to Compel Deposit of Rents. In paragraph 8 of the motion, the Creditors allege that they had served the Debtor with written notice of default and a demand for the rents pursuant to Section 697.07 of the Florida Statutes....

...tion for Appointment of Receiver and Alternative Motion to Compel Deposit of Rents. In the Memorandum, the Creditors argue that the assignment of rents contained in the loan documents was absolute, and that they are entitled to the rents pursuant to Section 697.07 of the Florida Statutes. According to the Creditors, Section 697.07 entitles them to the immediate turnover of all rents collected from the Property....

...consideration of the Order Denying the Motion for Appointment of Receiver and Granting Alternative Motion to Compel Deposit of Rents. The Motion was filed *449 on the basis that the Order did not provide the Creditors with the protection intended by Section 697.07 of the Florida Statutes. The focus of the Motion for Reconsideration is the Creditors' claim to "collected rents:" 1. Section 697.07(3) defines "collected rents" as all rents in the possession of the mortgagor at the time that written demand was made for turnover of the rents, or rents collected thereafter....

...On August 2, 1996, the Creditors mailed to the Debtors a written demand for the total amount due under the Mortgage Note and Mortgage "as a result of your material defaults under the Loan Documents." The letter also stated: Further, pursuant to the Loan Documents and Florida Statute § 697.07, demand is hereby made that all rents, issues, proceeds, and profits accruing and to accrue ("Rents") arising from the property described in the Loan Documents ("Property") in your possession or collected hereafter should be forthwith be turned over.... The Debtor did not comply with the Creditors' demands, and the Creditors filed the foreclosure action in the Hillsborough County Circuit Court on August 12, 1996. A. Mortgages, Rents, and Florida Statute § 697.07 (1993)....

...age debt, from the time he takes possession of the property either by consent of the owner or through the appointment of a receiver in foreclosure proceedings. White v. Anthony Investment Co., 160 So. at 882. In 1987, the Florida Legislature enacted Section 697.07, Florida Statutes, to address the assignment of rents. The provisions of the statute as it was initially enacted [1] resulted in divergent views regarding its application. Compare In re 163rd Street Mini Storage, Inc., 113 B.R. 87, 90 (Bankr.S.D.Fla. *451 1990) (Weaver, J.) (§ 697.07 creates an absolute transfer of the ownership interest in the rents, upon default and written demand to the mortgagor) with In re One Fourth Street North, Ltd., 103 B.R....

...M.D.Fla.1990) (Baynes, J.) ("Any reading of the statute to create an absolute transfer of all interest in rents not only goes against the mortgage lien theory, but eliminates any reorganization by a Chapter 11 debtor"). In 1993, the Florida Legislature completely revised Section 697.07, and the statute now contains extensive provisions relating to the assignment of rents....

...lected rents shall be made at the conclusion of the action in accordance with the final judgment. Subsection 6 provides for an expedited hearing on an application to enforce the assignment of rents, and also provides that the procedures set forth in section 697.07 are in addition to any other legal or contractual remedies that the parties may have....

...hip of any other rents arising from the property. Subsection 8 relates to the application of rents received by the lender, and provides that any rents received by the lender must be applied in accordance with the loan documents. It is now clear that Section 697.07 does not provide for the transfer of ownership of rents without the mortgagor's consent or court action....

...the rents to the mortgagee if the mortgagor does not turn the rents over to the mortgagee. The Debtor in this case was not divested of its interest in the rents from the apartment complex solely because the Creditors had pursued their remedies under Section 697.07 of the Florida Statutes....

...ircuit Court subsequently entered a Final Judgment In Foreclosure. Id. In the Final Judgment, the Circuit Court "expressly determined that Seaboard has an absolute ownership interest in and to said rental revenues in accordance with Florida Statutes § 697.07." Id....

...In the bankruptcy case, the creditor filed a motion to prohibit the debtor's use of the rents, and for the entry of an order allowing the creditor to collect all future rents. Id. at 249. The creditor asserted that it was the owner of the rents pursuant to the Final Judgment of Foreclosure and Section 697.07 of the Florida Statutes, and that the rents therefore were not property of the debtor's bankruptcy estate. Id. at 250. Judge Paskay first cited his prior ruling in In re One Fourth Street North, Ltd., 103 B.R. 320 (Bankr.M.D.Fla.1989) for the proposition that Section 697.07 only creates a simplified method to perfect a creditor's right to sequester rents, and contemplates further judicial proceedings before a determination is made regarding a creditor's right to the rents....

...rived from the mortgaged property. Id. at 251. The Court therefore concluded that: [B]ased on the Debtor's default and entry of Final Judgment divesting the Debtor of any interest he had in the rents, and Seaboard's compliance with the provisions of § 697.07, the Assignment of Rents operated as an absolute transfer of the income stream to the mortgagee prior to the filing of the Bankruptcy Petition....

...911 (Bankr.S.D.Fla.1990). Id. at 252. The Court directed the debtor to deliver all rental revenue to the creditor immediately upon receipt, and to do all things necessary to ensure that future rents were paid directly to the creditor. Id. Although Section 697.07 was amended after Brackin was entered, the particular amendment does not affect the reasoning underlying the decision....

...In Shoppes, the debtor, as the owner of a shopping center, executed a note, mortgage, and assignment of leases, rents, and profits in favor of Meritor Savings Bank. Meritor subsequently declared a default by the debtor and made a written demand for turnover of rents pursuant to section 697.07 of the Florida Statutes....

...In reaching this decision, the Court agreed with *454 Judge Paskay's opinion in One Fourth Street, supra, together with a state appellate decision in Nassau Square Associates, Ltd. v. Insurance Commissioner, 579 So.2d 259 (Fla. 4th DCA 1991), determining that Section 697.07 does not effectuate an absolute transfer of rents, but instead contemplates further judicial proceedings to transfer ownership....

...I do not decide that issue because there was no preliminary or final adjudication in the state action prior to the Chapter 11 filing in this case. Id. at 1023. (Emphasis supplied.) The Court's conclusion, therefore, is carefully limited as follows: In cases where pre-bankruptcy implementation of § 697.07 results in the deposit of rents into the state court registry and there has been no preliminary or final adjudication of the mortgagee's rights by the state court, the rents in the state court registry and the future stream of rents are property of the estate upon filing of a Chapter 11....

...re the owners of all rents. According to Judge Paskay's decision in Brackin, therefore, the prepetition order completely divested the Debtor of any interest that it had in the rents, and the Final Judgment coupled with the Creditors' compliance with Section 697.07 operated as an absolute transfer of the income stream generated by the Debtor's apartment complex....

...on. Further, as a proceeding within the foreclosure action, the Creditors filed a Motion to Compel the Deposit of Rents into the court registry, which of course focused specifically on the rents generated from the apartment complex. The Motion cites Section 697.07 of the Florida Statutes....

...Consequently, the Debtor argued that the Creditors were not entitled to foreclose the Mortgage or to the rents. After the state court entered an Order compelling the deposit of rents, only the Creditors filed a motion for reconsideration of the order. The motion for reconsideration again cited Section 697.07, and contended that the order compelling the deposit did not provide the Creditors with all of the protections afforded by the statute....

...However, in this case the Debtor pledged and assigned its interest in the rents, including future rents, to secure the debt, and the Creditors sought to enforce that assignment. Both the state court order compelling the deposit of rents and Fla.Stat. § 697.07 are clear that the disposition of rents was subject to final determination by the state court....

...kruptcy proceeding, *457 even though the claim was captioned differently in the state court action.) Finally, the determination of the disposition of rents was a critical and necessary part of the judgment in the state court action. Florida Statutes § 697.07(4) provides that the state court may require the rents to be deposited into a depository "pending final adjudication" of the action. Florida Statutes § 697.07(5) provides that undisbursed collected rents shall be disbursed in accordance with the court's final judgment or decree....

...The Debtor argues with specific reference to future rents that the elements of collateral estoppel are not satisfied. However, in the Mortgage, the Debtor mortgaged all rents "accruing and to accrue from said premises" and assigned "all rents, profits and income from the property." Florida Statutes Section 697.07(3) addresses all rents in the possession of the mortgagor at the time of the written demand for rents and all rents "collected thereafter." In the Final Judgment, the state court declared the creditors to be the owners of all rents "previously collected ......

...nership, is denied. NOTES [1] "A mortgage may provide for an assignment of rents. If such assignment is made, such assignment shall be absolute upon the mortgagor's default, becoming operative upon written demand made by the mortgagee...." Fla.Stat. § 697.07 (1987).

...The attorneys for Leader Federal Bank, shall forthwith turnover to Small Business Administration all escrowed funds derived from the Debtor's real estate pursuant to the Order for Assignment of Rents entered in the state court foreclosure action. NOTES [1] Fla.Stat. § 697.07(3) provides that an assignment of rents shall be enforceable upon the mortgagor's default and upon written demand for the rents made by the mortgagee to the mortgagor.

...borrower was in default of the note and mortgage. In November 2013, Beltway filed a motion seeking an order from the trial court requiring the borrower “to sequester all collected rents for the real property . . . pursuant to Fla. Stat. Section 697.07(4).” On January 9, 2014, the trial court held a hearing on Beltway’s motion, and the following day, January 10, entered the order on appeal....

...” during the pendency of the foreclosure action. The order also contained the following language: “All of the rents, revenue, income, and profits from the Property shall constitute and be construed as ‘rents’ for all purposes under Section 697.07 (2013), Florida Statutes.” On January 16, 2014, Terant filed a Motion to Vacate and/or Amend the trial court’s January 10 sequestration order....

...on a witness contrary to statute did not warrant reversal because the error was not fundamental to the case). While we agree with the borrower that “rents” which are subject to foreclosure proceeding sequestration pursuant to either (i) Section 697.07, Florida 5 Statutes (2013)1, or (ii) Section H of the mortgage’s assignment of rents rider,2 do 1 The term “rents” contemplated in Section 697.07 does not include the revenues collected by a hotel from charges to hotel guests....

.... Hickey’s Exhibits 5 and 6. . Moreover, even if the tenants paid rent to the Debtors prior to the foreclosure, Hickey did not allege the existence of an assignment of rents clause in the mortgage or demonstrate compliance with the procedures of section 697.07 of the Florida Statutes....

...1989)(The transfer reduced the debtor's contingent liability on a guaranty, and the debtor therefore received reasonably equivalent value.) In this case, it is undisputed that the Debtor owed the Defendants in excess of $7,333,267.89 pursuant to the Mortgage and Mortgage Notes executed in 1983. Pursuant to § 697.07, Florida Statutes, the state court authorized the use of the rents to pay reasonable expenses to protect, preserve, and operate the property, and required the mortgagor to deposit the net rents into a designated depository....

...conclusion of the action in accordance with the court's final judgment or decree." Finally, that statute provides that upon receipt of the actual rents, the Defendants are required to apply the amount received to reduce the indebtedness owed to it. Section 697.07 of the Florida Statutes provides in part: Chapter 697. Instruments Deemed Mortgages and the Nature of a Mortgage 697.07....

...ure or in the proof of claim filed by the Defendants in this chapter 11 case. The Debtor's contention in this regard does not change the Court's conclusion. The Final Judgment of Foreclosure declared that the Defendants were the owners of the rents. Section 697.07(8), Florida Statutes, provides that any of the rents received by the mortgagee shall be applied in accordance with the documents, and that the mortgagee shall account to the mortgagor for such application....

...We find no merit in appellant's argument that the trial court exceeded its jurisdiction when it entered its order requiring appellant to deposit rents into the registry of the court. The assignment of rents became absolute upon appellant's default and operative upon written demand by appellee. § 697.07, Fla. Stat. (1987). Appellant quoted part of section 697.07 but failed to quote the operative language which provides: A mortgage may provide for an assignment of rents....

...Therefore, we must reverse and remand with directions to vacate the ex parte receivership. On remand, if the Bank so wishes, it must be afforded an opportunity to establish the need for a receiver at a properly noticed evidentiary hearing. Reversed and remanded with directions. ALTENBERND and LaROSE, JJ., Concur. NOTES [1] Section 697.07, Florida Statutes (2009), provides a simple method to enforce rent assignment clauses....

...It is without dispute that the Debtor defaulted on the mortgage loan by failing to make the regular monthly payment due on March 1, 1992, and all subsequent payments. Shortly after the initial default, Allstate accelerated all the amounts due on the mortgage loan, and pursuant to Fla. Stat. § 697.07 and an assignment of rents, demanded that the Debtor turn over or sequester all rents collected from the tenants....

...“court registry” to encompass attorneys’ and landlords’ own accounts. This is especially evident when contrasting section 83.232 with other statutes in which the Legislature has chosen to allow for rent or other monies to be paid outside the court registry. For example, section 697.07(5), Florida Statutes (2023), governs assignment of rents during the pendency of foreclosure actions. The statute provides: “[I]n a foreclosure action, and notwithstanding any asserted defenses or counterclaims ....

...It is without dispute that the Debtor defaulted on the mortgage loan by failing to make the regular monthly payment due on March 1, 1991, and all subsequent payments. Shortly after the initial default, MONY accelerated all the amounts due on the mortgage loan and pursuant to Fla. Stat. 697.07 and an assignment of rents, demanded that the Debtor turn over or sequester all rents collected from the tenants....

...e ad valorem taxes for three years, and failed to remit rentals to the mortgagee pursuant to an assignment of rentals after default and after the mortgagee had exercised its right to receive rentals and had made a written demand therefor pursuant to section 697.07, Florida Statutes....

PER CURIAM. We cannot conclude on the record before us that the lower court’s refusal to compel the appellee’s deposit of rents into the court’s registry pending final adjudication was a clear abuse of discretion granted under section 697.07(4), Florida Statutes (1995). Nor can we find error in the court’s denial of an assignment of the rents to the appellants *843 pursuant to section 697.07(3) where the court correctly determined that there was a bona fide dispute between the parties as to whether the appellee was in default of the mortgage....

Per Curiam. We summarily affirm the trial court's order requiring sequestration of rents under section 697.07(4), Florida Statutes (2018)....

...Murphy, III, and Michael L. Gates, Judges; L.T. Case Nos. CACE-15-016505 12 and CACE-16-005839 12. Gary Barcus, Pembroke Pines, for appellants. No appearance for appellee. PER CURIAM. We summarily affirm the trial court’s order requiring sequestration of rents under section 697.07(4), Florida Statutes (2018)....

...On February 7, 1989, two months after service of the writ of garnishment, First Federal declared Lanahan’s mortgage to be in default and (i) accelerated the entire balance of the mortgage note (approximately $236,400) and (ii) demanded payment of the assigned rents pursuant to § 697.07, Florida Statutes....

...DISCUSSION The crucial issue to be decided by this Court is whether the January, 1989, rental payment owing from National Health Laboratories to Lanahan is subject to garnishment. Defendant suggests that the February 7, 1989, letter from First Federal’s attorney constituted a written demand by the mortgagee under § 697.07, Florida Statutes and converted the collateral assignment of rents in the mortgage into an absolute assignment of rents, thereby precluding plaintiff’s attempts at garnishment....

...In March 1992, Appellant accelerated the balance of the notes and mortgages. (Initial Brief of Appellant at 1; Reply Brief of Ap-pellee Debtor at 6). Appellant further made a demand for rents, thus perfecting its security interest in the rents under Florida Statutes § 697.07....

...Raton, for Appellee Residential Credit Opportunities Trust. No appearance for remaining Appellees. BLACK, Judge. Green Emerald Homes, LLC, challenges the order granting Residential Credit Opportunities Trust's motion to sequester rents pursuant to section 697.07, Florida Statutes (2017)....

...Bank of America to Bayview Loan Servicing, LLC, and finally from Bayview to Residential Credit. 2The borrowers were not named as defendants. -2- Earnings, Revenues, Rents, Issues, Profits, and Incomes," relying on section 697.07 and the terms of the mortgage....

...This assignment of rents of the Property shall terminate when the debt secured by the Security Instrument is paid in full. "[A] mortgagor and mortgagee are free to contract for an assignment of rents, and enforcement of that assignment will be governed by [section 697.07]." Ginsberg v. Lennar Fla. Holdings, Inc., 645 So. 2d 490, 498 (Fla. 3d DCA 1994). Section 697.07 "establish[es] procedures designed to give effect to the parties' rent assignment agreement." Wane v. U.S. Bank, Nat'l Ass'n, 128 So. 3d 932, 934 (Fla. 2d DCA 2013) (alteration in original) (quoting Ormond Beach Assocs., Ltd. P'ship v. Citation Mortg., Ltd., 634 So. 2d 1091, 1092 (Fla. 5th DCA 1994)). Section 697.07 provides, in pertinent part: (1) A mortgage or separate instrument may provide for an assignment of rents of real property or any interest therein as security for repayment of an indebtedness...

..."[A]n assignment of rents creates a lien on the rents in favor of the mortgagee, and the mortgagee will have the right to foreclose that lien and collect the rents, without the necessity of foreclosing on the underlying mortgage." Ginsberg, 645 So. 2d at 498; see also § 697.07(2). However, during the pendency of a foreclosure of the mortgage the statute also allows the rents to be deposited into the registry of the court or another depository designated by the court upon motion by the mortgagee or mortgagor. § 697.07(4); see also Wane, 128 So. 3d at 934 ("Section 697.07 draws a clear line between a motion seeking sequestration of rents into the court registry [under subsection (4)] and a motion seeking an actual assignment of rents to the lender pending foreclosure [under subsection (3)].")....

...Thus, Residential Trust became the mortgagee. Green Emerald Homes does dispute, however, Residential Credit's claim of entitlement to sequestration of rents as against Green Emerald Homes.4 Green Emerald Homes asserts that it is not a party to the mortgage and is not the mortgagor for purposes of section 697.07....

...homeowner's association. The title owner was not the borrower under the note 4We note that Residential Credit did not seek to enforce its statutorily- created lien on the rents subject to the assignment of rents provision in the mortgage, pursuant to section 697.07(3); it sought only sequestration of rents, pursuant to section 697.07(4)....

...dit does not make such an allegation in its foreclosure complaint. Finally, while the statute creates a lien on rents which is effective against Green Emerald Homes—as a third party—by virtue of recordation of the mortgage, see § 697.07(2), the statute does not require that the third-party title owner assign to the mortgagee rents owed to it under a separate document not subject to the foreclosure action.5 The statute specifically and repeatedly places the obligation on...

...there are tenants—are long-term renters whose leases originated with the borrowers such that rents paid to the mortgagors/borrowers during the time the mortgagors/borrowers were the owners of record and in default would be subject to sequestration under section 697.07. Nonetheless, because Residential Credit did not -7- It also specifically provides that "[n]othing herein shall alter the lien priorities, rights, or interests among mortgagees or other lienholders." § 697.07(7)....

...sociation dues, property taxes, or property insurance, let alone the mortgage—further discourages a speedy resolution of the mortgage foreclosure action from the third party's perspective. However, we must apply the language of the mortgage and section 697.07 as they are plainly written. Accordingly, we reverse the order granting Green Emerald Homes' motion to sequester rents. Reversed. CASANUEVA and VILLANTI, JJ., Concur....

...NCNB National Bank of Florida, 452 So.2d 1119 (Fla. 4th DCA 1984), and distinguish between the order here compelling the deposit of mortgage payments, and an order compelling the deposit of rents, pursuant to a mortgage provision assigning such rents to the mortgagee. In the latter case, Section 697.07, Fla.Stat....

490, 497 (Fla. 3rd DCA 1994) (Florida Statute section 697.07, providing for simplified procedure to enforce

...Carolina Portland stands for the proposition that even when a Lender has been granted a security interest in rents and profits of real property, that lien or interest is not perfected until such time as a receiver has been appointed. (That requirement has been superseded by statute. Fla. Stat. § 697.07.) Of course, as already noted, since the Association has no real property from which rents or proceeds can be generated, there is no security interest in any cash that could be perfected by appointment of a receiver....

...We find no abuse of discretion in the trial court’s order sequestering rents. See Whud Real Estate Ltd. P’ship v. Oak Grove, Ltd., 699 So.2d 842 (Fla. 3d DCA 1997). Lack of standing is an affirmative defense to foreclosure. See, e.g., Glynn v. First Union Nat’l Bank, 912 So.2d 357, 358 (Fla. 4th DCA 2005). Section 697.07(4), Florida Statutes (2011), provides that a court may order sequestration of rents “notwithstanding any asserted defenses or counterclaims of the mortgagor.” In ruling on a motion to sequester rents, a court should refrain from conclusively ruling on affirmative defenses....

enforcement of the assignment of rents clause. Section 697.07, Florida Statutes (1989) provides that if a

...affecting all or any part of the Property” and to collect “all rents, royalties, issues, profits, revenue, income and other benefits of the Property . . . .” The lender filed a foreclosure complaint in January 2014 and later moved to enforce the assignment of leases and rents under section 697.07, Florida Statutes....

...The trial court granted the motion and ordered the borrowers to deposit into the court registry “any and all revenue derived from, by way of illustration and not limitation, rents, fees, charges, accounts or other payments for the use or occupancy of hotel rooms and other hotel facilities.” The borrowers now appeal. Section 697.07 provides that if a foreclosure action is filed, and there is an assignment of rents securing the loan, the court may require the borrower to deposit collected rents into the court registry pending final judgment, regardless of any asserted defenses or counterclaims. § 697.07(4), Fla....

...3d 912 (Fla. 4th DCA 2012). The court may authorize the borrower, however, to use a portion of the collected rents to pay reasonable expenses “to protect, preserve, and operate” the property and to satisfy any legal obligations related to the property. § 697.07(4)(a), Fla. Stat. (2013). An order sequestering rents into the court registry under section 697.07(4) is reviewed for an abuse of discretion....

...See Tidewater Estates, 83 So. 3d at 912; Whud Real Estate Ltd. P’ship v. Oak Grove, Ltd., 699 So. 2d 842, 842 (Fla. 3d DCA 1997). The borrowers’ primary argument in this case is that hotel revenue cannot be sequestered into the court registry as “rents” under section 697.07(4). They rely on Orlando Hyatt Associates, Ltd. v. FDIC, 629 So. 2d 975 (Fla. 5th DCA 1993), where the Fifth District stated that section 697.07 applies only to “long-term rents” and not to “profits” such as hotel revenue. Id. at 976-77. We distinguish Orlando Hyatt because the parties in that case agreed that section 697.07 does not apply to hotel revenue. Id. at 976. 1 Here, the parties do not agree. 1 The idea that section 697.07 does not apply to hotel revenue stems from a line of bankruptcy cases decided in the early 1990s....

...The borrowers gave the lender the right to collect “all rents, royalties, issues, profits, revenue, income and other benefits of the Property” in the event of default. Considering this broad assignment, we cannot conclude that the trial court abused its discretion under section 697.07(4) by requiring the borrowers to deposit all revenue into the court registry pending final judgment. We therefore affirm the trial court’s order. Our affirmance is without prejudice to the borrowers seeking authorization to pay reasonable expenses related to the property before depositing revenue into the court registry. See § 697.07(4), Fla....

...Florida Federal ceased paying rent in February of 1989. Florida Federal claims that it had a right to withhold the rent payments by virtue of the terms of the provisions of the Mortgage regarding assignments of rents and by the separate assignments of rents provision under Florida Statutes § 697.07, the Security Agreement and Uniform Commercial Code, and the common law permitting the right of self help and setoff....

...hereof, and also all present and future right, title and interest in any lease. Florida Federal, after default by the Debtor, noticed the Debtor of its exercise of its rights under the Assignments of Rents Agreement, and pursuant to Florida Statutes § 697.07 (Exhibit J to the Counterclaim)....

...Nothing in rule 1.600 authorizes a trial court to require a mortgagor to deposit mortgage payments into the court’s registry. Hughes v. First Federal Sav. and Loan Ass’n, 621 So.2d 557 (Fla. 4th DCA 1993); compare Williams v. First Union Nat. Bank, 591 So.2d 1137 (Fla. 4th DCA 1992)(affirming, under § 697.07, Fla....

...determination of property rights was made; rather, what was requested and granted was an order which provided that the rental income stream be placed under the control of the Court, subject of course to final determination of entitlements at trial. Section 697.07(4), Florida Statutes (1993) specifically provides in regard to a motion to sequester rents as follows: “(4) Upon application by the mortgage or mortgagor, in a foreclosure action, and not withstanding any asserted defenses or counter...

...utes, does not apply retroactively. That issue was resolved by this court in Nassau Square Assoc. Ltd. v. Insurance Comm’r of California, 579 So.2d 259 (Fla. 4th DCA 1991). Here, a mortgagor executed an assignment of rents to a mortgagee. Applying section 697.07 retroactively, the assignment of rents became absolute upon the mortgagor’s default and written demand by the assignee-mortgagee. Section 697.07, Fla....

...hich had filed an action to foreclose its lien, see § 720.3085, Fla. Stat. (2010), and the appellant mortgagee Ocean Bank, which maintained a separate but contemporaneous action to foreclose its mortgage and an accompanying assignment of rents. See § 697.07, Fla....

...The order under review does not mention the notices of lis pendens. We therefore analyze this case without regard to them. . We are aware that Williams v. First Union Nat. Bank of Florida, 591 So.2d 1137 (Fla. 4th DCA 1992) notes that both Leon and Law were superseded by section 697.07, Florida Statutes (1989)....

PER CURIAM. This is an appeal from an order denying the plaintiff-mortgagee’s motion for sequestration of rents as provided by section 697.07(4), Florida Statutes (1995)....

...uptcy Code. The Creditors assert that the Final Judgment has preclusive or collateral estoppel effect with respect to the ownership of the rents, and that ownership of the rents passed to the Creditors when the Final Judgment was entered pursuant to section 697.07 of the Florida Statutes....

...Also on August 12, 1996, the Creditors filed a Motion for Appointment of Receiver and Alternative Motion to Compel Deposit of Rents. In paragraph 8 of the motion, the Creditors allege that they had served the Debtor with written notice of default and a demand for the rents pursuant to Section 697.07 of the Florida Statutes....

...tion for Appointment of Receiver and Alternative Motion to Compel Deposit of Rents. In the Memorandum, the Creditors argue that the assignment of rents contained in the loan documents was absolute, and that they are entitled to the rents pursuant to Section 697.07 of the Florida Statutes. According to the Creditors, Section 697.07 entitles them to the immediate turnover of all rents collected from the Property....

...or Reconsideration of the Order Denying the Motion for Appointment of Receiver and Granting Alternative Motion to Compel Deposit of Rents. The Motion was filed on the basis that the Order did not provide the Creditors with the protection intended by Section 697.07 of the Florida Statutes. The focus of the Motion for Reconsideration is the Creditors' claim to "collected rents:" 1. Section 697.07(3) defines "collected rents" as all rents in the possession of the mortgagor at the time that written demand was made for turnover of the rents, or rents collected thereafter....

...On August 2, 1996, the Creditors mailed to the Debtors a written demand for the total amount due under the Mortgage Note and Mortgage "as a result of your material defaults under the Loan Documents." The letter also stated: Further, pursuant to the Loan Documents and Florida Statute § 697.07, demand is hereby made that all rents, issues, proceeds, and profits accruing and to accrue ("Rents") arising from the property described in the Loan Documents ("Property") in your possession or collected hereafter should be forthwith be turned over. . . . The Debtor did not comply with the Creditors' demands, and the Creditors filed the foreclosure action in the Sarasota County Circuit Court on August 12, 1996. A. Mortgages, Rents, and Florida Statute § 697.07 (1993)....

...age debt, from the time he takes possession of the property either by consent of the owner or through the appointment of a receiver in foreclosure proceedings. White v. Anthony Investment Co., 160 So. at 882. In 1987, the Florida Legislature enacted Section 697.07, Florida Statutes, to address the assignment of rents. The provisions of the statute as it was initially enacted [1] resulted in divergent views regarding its application. Compare In re 163rd Street Mini Storage, Inc., 113 B.R. 87, 90 (Bankr.S.D.Fla.1990) (Weaver, J.) *798 (§ 697.07 creates an absolute transfer of the ownership interest in the rents, upon default and written demand to the mortgagor) with In re One Fourth Street North, Ltd., 103 B.R....

...1 (Bankr.M.D.Fla.1990) (Baynes, J.) ("Any reading of the statute to create an absolute transfer of all interest in rents not only goes against the mortgage lien theory, but eliminates any reorganization by a Chapter 11 debtor"). In 1993, the Florida Legislature completely revised Section 697.07, and the statute now contains extensive provisions relating to the assignment of rents....

...lected rents shall be made at the conclusion of the action in accordance with the final judgment. Subsection 6 provides for an expedited hearing on an application to enforce the assignment of rents, and also provides that the procedures set forth in section 697.07 are in addition to any other legal or contractual remedies that the parties may have....

...hip of any other rents arising from the property. Subsection 8 relates to the application of rents received by the lender, and provides that any rents received by the lender must be applied in accordance with the loan documents. It is now clear that Section 697.07 does not provide for the transfer of ownership of rents without the mortgagor's consent or court action....

...the rents to the mortgagee if the mortgagor does not turn the rents over to the mortgagee. The Debtor in this case was not divested of its interest in the rents from the apartment complex solely because the Creditors had pursued their remedies under Section 697.07 of the Florida Statutes....

...ircuit Court subsequently entered a Final Judgment In Foreclosure. Id. In the Final Judgment, the Circuit Court "expressly determined that Seaboard has an absolute ownership interest in and to said rental revenues in accordance with Florida Statutes § 697.07." Id....

...In the bankruptcy case, the creditor filed a motion to prohibit the debtor's use of the rents, and for the entry of an order allowing the creditor to collect all future rents. Id. at 249. The creditor asserted that it was the owner of the rents pursuant to the Final Judgment of Foreclosure and Section 697.07 of the Florida Statutes, and that the rents therefore were not property of the debtor's bankruptcy estate. Id. at 250. Judge Paskay first cited his prior ruling in In re One Fourth Street North, Ltd., 103 B.R. 320 (Bankr.M.D.Fla.1989) for the proposition that Section 697.07 only creates a simplified method to perfect a creditor's right to sequester rents, and contemplates further judicial proceedings before a determination is made regarding a creditor's right to the rents....

...rived from the mortgaged property. Id. at 251. The Court therefore concluded that: [B]ased on the Debtor's default and entry of Final Judgment divesting the Debtor of any interest he had in the rents, and Seaboard's compliance with the provisions of § 697.07, the Assignment of Rents operated as an absolute transfer of the income stream to the mortgagee prior to the filing of the Bankruptcy Petition....

...911 (Bankr.S.D.Fla.1990). Id. at 252. The Court directed the debtor to deliver all rental revenue to the creditor immediately upon receipt, and to do all things necessary to ensure that future rents were paid directly to the creditor. Id. Although Section 697.07 was amended after Brackin was entered, the particular amendment does not affect the reasoning underlying the decision....

...In Shoppes, the debtor, as the owner of a shopping center, executed a note, mortgage, and assignment of leases, rents, and profits in favor of Meritor Savings Bank. Meritor subsequently declared a default by the debtor and made a written demand for turnover of rents pursuant to section 697.07 of the Florida Statutes....

...In reaching this decision, the Court agreed with Judge Paskay's opinion in One Fourth Street, supra, together with a state appellate decision in Nassau Square Associates, Ltd. v. Insurance Commissioner, 579 So.2d 259 (Fla. 4th DCA 1991), determining that Section 697.07 does not effectuate an absolute transfer of rents, but instead contemplates further judicial proceedings to transfer ownership....

...I do not decide that issue because there was no preliminary or final adjudication in the state action prior to the Chapter 11 filing in this case. Id. at 1023. (Emphasis supplied.) The Court's conclusion, therefore, is carefully limited as follows: In cases where pre-bankruptcy implementation of § 697.07 results in the deposit of rents into the state court registry and there has been no preliminary or final adjudication of the mortgagee's rights by the state court, the rents in the state court registry and the future stream of rents are property of the estate upon filing of a Chapter 11....

...re the owners of all rents. According to Judge Paskay's decision in Brackin, therefore, the prepetition order completely divested the Debtor of any interest that it had in the rents, and the Final Judgment coupled with the Creditors' compliance with Section 697.07 operated as an absolute transfer of the income stream generated by the Debtor's apartment complex....

...on. Further, as a proceeding within the foreclosure action, the Creditors filed a Motion to Compel the Deposit of Rents into the court registry, which of course focused specifically on the rents generated from the apartment complex. The Motion cites Section 697.07 of the Florida Statutes....

...Consequently, the Debtor argued that the Creditors were not entitled to foreclose the Mortgage or to the rents. After the state court entered an Order compelling the deposit of rents, only the Creditors filed a motion for reconsideration of the order. The motion for reconsideration again cited Section 697.07, and contended that the order compelling the deposit did not provide the Creditors with all of the protections afforded by the statute....

...However, in this case the Debtor pledged and assigned its interest in the rents, including future rents, to secure the debt, and the Creditors sought to enforce that assignment. Both the state court order compelling the deposit of rents and Fla. Stat. § 697.07 are clear that the disposition of rents was subject to final determination by the state court....

...e bankruptcy proceeding, even though the claim was captioned differently in the state court action.) Finally, the determination of the disposition of rents was a critical and necessary part of the judgment in the state court action. Florida Statutes § 697.07(4) provides that the state court may require the rents to be deposited into a depository "pending final adjudication" of the action. Florida Statutes § 697.07(5) provides that undisbursed collected rents shall be disbursed in accordance with the court's final judgment or decree....

...The Debtor argues with specific reference to future rents that the elements of collateral estoppel are not satisfied. However, in the Mortgage, the Debtor mortgaged all rents "accruing and to accrue from said premises" and assigned "all rents, profits and income from the property." Florida Statutes Section 697.07(3) addresses all rents in the possession of the mortgagor at the time of the written demand for rents and all rents "collected thereafter." In the Final Judgment, the state court declared the creditors to be the owners of all rents "previously collected ....

...hip, is denied. NOTES [1] "A mortgage may provide for an assignment of rents. If such assignment is made, such assignment shall be absolute upon the mortgagor's default, becoming operative upon written demand made by the mortgagee. . . ." Fla. Stat. § 697.07 (1987).

...Upon application by the mortgagee or mortgagor, in a foreclosure action . . . a court of competent jurisdiction, pending final adjudication of any action, may require the mortgagor to deposit the collected rents into the registry of the court . . . .” § 697.07(1), (4), Fla. Stat. (2016). Section 697.07 “was enacted as a public policy matter by the legislature to facilitate commercial lending by banks by enabling them to obtain an assignment of rents as further security in the event of default.” Williams v....