40:11A-14. Securing bonds by mortgage or trust indenture; powers of authority after default; pledge of revenue

(1) Any bonds or any issue or issues of bonds of an authority may, in the discretion of the authority, be secured by a mortgage or trust indenture by and between the authority and a trustee or trustees within or without the State of New Jersey. Any such mortgage or trust indenture or any resolution authorizing the issuance of such bonds may include and set forth the agreements, covenants, pledges and other provisions on the part of the authority to be performed and made by the authority pursuant to this act in order to secure the payment of such bonds.

(2) An authority shall have power by its resolution, trust indenture, mortgage, lease, or other contract to confer upon any obligee holding or representing a specified amount in bonds, or holding a lease, the right (in addition to all rights that may otherwise be conferred), upon the happening of an event of default as defined in such resolution or instrument, by suit, action or proceeding in any court of competent jurisdiction:

(a) To cause possession of any parking project or any part thereof to be surrendered to any such obligee.

(b) To obtain the appointment of a receiver of any parking project of said authority or any part thereof and of the rents and profits therefrom who may enter and take possession of such parking project or any part thereof and operate and maintain same, and collect and receive all fees, rents, revenues, or other charges thereafter arising therefrom, and shall keep such moneys in a separate account or accounts and apply the same in accordance with the obligations of said authority as the court shall direct.

(c) To require said authority and the commissioners thereof to account as if it and they were the trustees of an express trust.

(3) Any pledge of revenues or other moneys made by an authority pursuant to this act shall be valid and binding from the time when the pledge is made; the revenues or other moneys so pledged and thereafter received by the authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the authority irrespective of whether such parties have notice thereof. Neither the resolution or resolutions, mortgage or trust indenture, nor any other instrument by which such pledge is created, need be recorded.

(4) In the event of a default by an authority which results in title to a parking project passing to a private mortgagee or person, all tax exemption privilege or other special privilege accorded to such parking project because of its public nature shall cease, except exemptions from tax of bonds or the interest thereon or the income therefrom.

L.1948, c. 198, p. 988, s. 14. Amended by L.1958, c. 22, p. 65, s. 7, eff. April 22, 1958.