Also known as: acceleration clause · acceleration-clause · acceleration-clauses · accel clause · acceleration provision
Written by attorneys · grounded in primary & secondary sources — see below
A contractual term in a mortgage or secured obligation empowering the creditor to declare the full unpaid balance immediately due upon the debtor's default. The clause typically requires written notice after default for the acceleration to become effective on the date specified in the notice. Acceleration must be exercised in good faith and may be subject to a cure period before foreclosure rights arise.
Alliance Holdings lent funds to Antonio Alvarado secured by a mortgage on commercial property. The note required written notice of default and a fifteen-day cure period before the lender could declare the full balance due. After Alvarado missed one payment, he tendered the arrears plus fees eight days later. Alliance rejected the tender and filed for foreclosure on the accelerated amount.
Atlas Ventures held a mortgage from Alexandra Armstrong on warehouse property. The documents included an acceleration provision. Armstrong defaulted by missing several installments. Atlas delivered written notice specifying that the full obligation would become due thirty days later. Armstrong tendered only the arrears before the effective date.
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Yes. An acceleration provision becomes effective on the date specified in a written notice delivered by the mortgagee to the mortgagor after default. Without proper notice the acceleration does not take effect and the borrower may still cure by paying only the arrears.
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No. In jurisdictions requiring good faith, a lender's consistent acceptance of late payments without objection creates a reasonable expectation that minor lateness will not trigger acceleration. Abrupt acceleration after such a course of dealing violates the duty of good faith.
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After acceleration the borrower may prevent foreclosure only by tendering the full accelerated obligation. Before acceleration becomes effective the borrower may cure by paying only the amount then owing.
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…by lessee, landlord was entitled to all accrued rental payments). Furthermore, the lease at issue does not contain an acceleration clause. As a result, we hold that the trial court was correct in not allowing Bowdoin Square's claim for future rent. Conclusion Because we hold that the trial court erred in determining…