C.F.R. » Title 25 » CHAPTER I—BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR › SUBCHAPTER H—LAND AND WATER › PART 166—GRAZING PERMITS › Subpart C—Permit Requirements

25 C.F.R. § 166.224

What factors does the BIA consider when reviewing a leasehold mortgage?

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(a) We will approve the leasehold mortgage if:

(1) All consents required in the permit have been obtained from the Indian landowners and any surety or guarantor;

(2) The mortgage covers only the permit interest, and no unrelated collateral belonging to the permittee;

(3) The financing being obtained will be used only in connection with the development or use of the permitted premises, and the mortgage does not secure any unrelated obligations owed by the permittee to the mortgagee; and

(4) We find no compelling reason to withhold our approval, in order to protect the best interests of the Indian landowner.

(b) In making the finding required by paragraph (a)(4) of this section, we will consider whether:

(1) The ability to perform the permit obligations would be adversely affected by the cumulative mortgage obligations;

(2) Any negotiated permit provisions as to the allocation or control of insurance or condemnation proceeds would be modified;

(3) The remedies available to us or the Indian landowners would be limited (beyond the additional notice and cure rights to be afforded to the mortgagee), if the permittee defaults on the permit;

(4) Any rights of the Indian landowners would be subordinated or adversely affected in the event of a foreclosure, assignment in lieu of foreclosure, or issuance of a “new permit” to the mortgagee.

(c) We will notify the Indian landowners of our approval of the leasehold mortgage.

Notes of Decisions
Cited in 1 case, 2016–2016 · leading case: Fredericks v. United States, 125 Fed. Cl. 404 (Fed. Cl. 2016).
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Fredericks v. United States, 125 Fed. Cl. 404 (Fed. Cl. 2016). “243 ; see also 25 C.F.R. § 166.224 . Agricultural leases and permits must also include indemnity clauses that hold “the Indian landowners harmless from any loss, liability, or damages resulting from the tenant’s use or occupation of the leased premises.”
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