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Subordination Non-Disturbance and Attornment Agreement
Understanding the Subordination, Non-Disturbance and Attornment Agreement
Definition & Meaning
A Subordination, Non-Disturbance and Attornment Agreement (often referred to as an SNDA) is a legal contract involving three parties: the tenant, the landlord, and the landlord's lender. In this agreement, the tenant acknowledges that their leasehold interest is subordinate to the lender's mortgage interest. This means that if the landlord defaults on their mortgage, the lender has the right to take possession of the property. However, the lender also agrees to honor the tenant's lease, provided the tenant is not in default. This agreement is essential for protecting the tenant's rights and ensuring that they can continue to occupy the premises under specified conditions, even if the landlord faces foreclosure.
Table of content
Legal Use & context
Subordination, Non-Disturbance and Attornment Agreements are commonly used in real estate and property law. They play a crucial role in transactions involving leased properties, particularly when financing is involved. These agreements help clarify the relationships and rights of tenants and lenders, ensuring that tenants can maintain their occupancy rights despite any issues the landlord may face. Users can often manage these agreements with the help of legal templates available through services like US Legal Forms, which provide resources drafted by experienced attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A commercial tenant leases space in a shopping center. The landlord takes out a mortgage on the property. An SNDA is executed, ensuring that if the landlord defaults, the lender will allow the tenant to continue their lease.
Example 2: A residential tenant signs an SNDA when their landlord refinances the property. The agreement guarantees that the tenant's rights remain intact even if the landlord fails to make mortgage payments (hypothetical example).
State-by-state differences
State
Notable Differences
California
California law often emphasizes tenant rights in foreclosure situations, making SNDA agreements particularly protective.
New York
In New York, SNDAs are commonly required by lenders and must be carefully drafted to comply with specific state regulations.
Texas
Texas law allows for certain modifications in SNDA agreements that may not be permissible in other states.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Common misunderstandings
What to do if this term applies to you
If you are a tenant facing a situation where a Subordination, Non-Disturbance and Attornment Agreement may apply, consider the following steps:
Review your lease and any existing agreements with your landlord and lender.
Consult with a legal professional to understand your rights and obligations.
Explore ready-to-use legal form templates available through US Legal Forms to draft or modify your SNDA efficiently.
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