Resources for lenders, landlords, and tenants in understanding and successfully negotiating subordination, non-disturbance, and attornment agreements (SNDAs). This toolkit contains jurisdictionally-neutral and state-specific resources.
A commercial tenant with leasehold rights to space located in the mortgaged property under a written lease agreement.
A property owner (or tenant of a ground lease ) in the dual role of: borrower under a commercial loan; and landlord under an existing commercial property lease. SNDAs are routinely required in commercial real estate transactions by:Tenants as a condition precedent to entering into a new or renewal lease (see Office Tenant's Pre-Signing Checklist).
The primary effect of an SNDA is that the tenant agrees to subordinate its lease to the mortgage in exchange for the lender agreeing not to disturb the tenant if the lender forecloses its superior security interest in the real property. Without the protection of a non-disturbance agreement, a subordinate lease is potentially terminable in foreclosure .
The priority of the lien of the lender's security interest in the mortgaged property over the lien of the tenant's leasehold estate that is created under the commercial lease.
The parties' respective rights and obligations if: the landlord defaults under the mortgage loan or the lease; or the lender exercises its foreclosure rights under the mortgage. The tenant's right to be left undisturbed in the event of a loan foreclosure.The tenant's obligation to attorn to (recognize) the lender if the lender succeeds to the interests of the landlord by foreclosure or deed-in-lieu of foreclosure.
Although some leases purport to grant the tenant non-disturbance if a lender forecloses, unless the lender approves the lease with the pre-negotiated SNDA attached, a lender is not a direct party to the lease and not bound to agreements reached between the tenant and the borrower. A non-disturbance agreement must come directly from the lender.
For transactions involving properties in multiple states or when a lender wants consistency for its SNDAs among transactions in different states, refer to our jurisdictionally-neutral SNDA forms below. These documents offer guidance on drafting and negotiating SNDAs and can be modified for use in any jurisdiction. Each resource also contains a link to a redline (in the first drafting note) that highlights the comments and requested changes typical in an SNDA negotiation.
For a single property transaction or when all properties are located in a particular state and the lender does not need consistency, state-specific versions of an SNDA, like those identified below, can instead be used.