Collateral Access Agreement for Canada

Collateral Access Agreement Template for Canada

A Collateral Access Agreement under Canadian law is a tripartite agreement between a lender, a landlord, and a tenant-borrower that establishes the rights and procedures for the lender to access and potentially remove collateral located on the landlord's premises. The agreement navigates the intersection of personal property security interests and real property rights, incorporating provisions that comply with both federal banking regulations and provincial property laws. It addresses crucial aspects such as notice requirements, access protocols, liability allocation, and restoration obligations, while ensuring compliance with applicable Canadian federal and provincial legislation, including the Personal Property Security Act (PPSA) and the Bank Act.

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What is a Collateral Access Agreement?

The Collateral Access Agreement is essential in Canadian secured lending transactions where a borrower's collateral is located on leased or third-party owned premises. This document becomes necessary when a lender takes security over movable assets (such as equipment, inventory, or other personal property) located on premises not owned by the borrower. The agreement ensures that the lender's security interest is protected while respecting the landlord's property rights, addressing potential conflicts between personal property security interests and real property rights. It typically includes detailed provisions for access rights, notice requirements, insurance obligations, and liability allocation, all while ensuring compliance with Canadian federal banking regulations and provincial property laws, including the PPSA. The agreement is particularly crucial in enforcement scenarios, providing clear protocols for the lender to inspect, remove, or sell collateral while minimizing disruption to the landlord's operations.

What sections should be included in a Collateral Access Agreement?

1. Parties: Identification of all parties to the agreement: secured party/lender, property owner/landlord, and borrower/tenant

2. Background: Context of the agreement, reference to relevant security agreements, lease agreements, and the purpose of the collateral access arrangement

3. Definitions: Key terms including Collateral, Premises, Access Period, Security Interest, and other relevant defined terms

4. Grant of Access: Core provision granting the secured party right to access the premises to inspect, remove, or sell collateral

5. Notice Requirements: Procedures and timeframes for giving notice before accessing the premises

6. Landlord's Rights and Obligations: Outline of property owner's obligations to facilitate access and maintain premises

7. Secured Party's Rights and Obligations: Responsibilities of secured party during access, including safety, insurance, and restoration obligations

8. Term and Termination: Duration of the agreement and circumstances for termination

9. Insurance and Liability: Insurance requirements and allocation of liability for damages

10. Notices: Format and method for giving formal notices under the agreement

11. General Provisions: Standard boilerplate including governing law, amendments, assignment, and severability

What sections are optional to include in a Collateral Access Agreement?

1. Multiple Location Provisions: Required when collateral is located at multiple premises, establishing specific procedures for each location

2. Environmental Matters: Needed when collateral includes potentially hazardous materials or environmental concerns

3. Subordination Provisions: Required when there are multiple secured parties or competing interests requiring priority arrangements

4. Storage Fees: Include when the landlord may charge fees for continued storage of collateral after default

5. Security Personnel: Needed when special security arrangements are required for access

6. Third Party Consents: Required when access requires approval from additional parties beyond the main agreement parties

7. Special Handling Requirements: Include when collateral requires specific handling, temperature control, or other special conditions

What schedules should be included in a Collateral Access Agreement?

1. Schedule A - Premises Description: Detailed description and/or floor plans of the premises where collateral is located

2. Schedule B - Collateral Description: Detailed inventory or description of the collateral covered by the agreement

3. Schedule C - Access Protocols: Specific procedures and requirements for accessing different areas of the premises

4. Schedule D - Contact Information: List of authorized representatives and contact details for all parties

5. Schedule E - Insurance Requirements: Detailed insurance requirements and minimum coverage amounts

6. Appendix 1 - Form of Notice: Template for access notices and other required notifications

7. Appendix 2 - Security Procedures: Detailed security protocols and requirements for accessing the premises

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Security Agreement

Cost

Free to use
Relevant Industries

Banking & Financial Services

Commercial Real Estate

Manufacturing

Retail

Warehousing & Logistics

Industrial Equipment

Technology & IT

Healthcare

Agriculture

Construction

Mining & Resources

Relevant Teams

Legal

Credit Risk

Commercial Lending

Real Estate

Operations

Facility Management

Treasury

Compliance

Asset Management

Corporate Finance

Property Management

Loan Administration

Relevant Roles

Commercial Lending Officer

Credit Risk Manager

Property Manager

Real Estate Lawyer

Banking and Finance Lawyer

Loan Administrator

Security Trustee

Collateral Manager

Asset Manager

Commercial Real Estate Manager

Risk Officer

Corporate Counsel

Facilities Manager

Operations Director

Chief Financial Officer

Treasury Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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