15-1-704. Bonds; sources of security and limitations; mortgage provisions and limitations.

(a) The principal and interest on any bonds issued under this article shall be secured by a pledge of the revenues of the project for which the bonds were issued and may be secured by a mortgage covering all or any part of the project by a pledge of the lease of the project, or by other security devices deemed advantageous that do not constitute a general obligation of the municipality or county. A municipality or county shall not obligate itself except with respect to the project and the application of its revenues, and shall not incur a pecuniary liability or a charge upon its general credit or against its taxing power.

(b) Any mortgage given to secure the bonds may contain any agreement and provisions customarily contained in instruments securing bonds, including provisions respecting the fixing and collection of rents for any project covered, the terms of the lease of the project, the maintenance and insurance of the project, the creation and maintenance of special funds from the revenues of the project and the rights and remedies available in the event of a default to the bondholders or to the trustee under a mortgage.

(c) Any mortgage securing the bonds may provide that:

(i) In the event of a default in the payment of the principal or interest or in the performance of any of the terms of the agreement or mortgage, payment and performance may be enforced by mandamus or by the appointment of a receiver with power to charge and collect rents and to apply the revenues from the project in accordance with the agreement or mortgage;

(ii) In the event of a default in the payment or the violation of any agreement contained in the mortgage, the mortgage may be foreclosed and sold in any manner permitted by law;

(iii) Any trustee under the mortgage or the holder of any of the bonds secured thereby may become the purchaser at any foreclosure sale.

(d) No breach of any agreement specified in this section may impose any pecuniary liability upon a municipality or county or any charge upon their general credit or against their taxing powers.