Legality of Proposed Financing of Construction of Building To Be Leased to General Services Administration

A decision was requested regarding the legality of the proposed assignment of rents and conveyance of land incident to financing of the construction of an office building to be leased to the General Services Administration. A valid assignment of the contract payments may be made to the bank as agent or trustee of all of the parties participating in the financing. The conveyance of the land by the lessor to the organization representing the purchasers and holders of the bonds cannot be regarded as a transfer of a contract since the lessor will not transfer his right to receive rent, the agreement for the conveyance will specify that the conveyance is subject to the existing lease with the Government, and the lessor is not released from his obligations under that lease.