Subordination, Non-Disturbance, and Attornment Agreements: Drafting to Protect Lenders, Tenants, and Landlords

This CLE course will discuss the purpose and objectives of subordination, non-disturbance, and attornment agreements (SNDAs) for all key stakeholders--lenders, tenants, and landlords. The panel will outline best practices for drafting and negotiating SNDAs and other related provisions such as estoppel certificates.

Description:

One of the most significant issues in commercial leasing and real estate finance is the priority of the secured loan concerning the property owner's tenants. SNDAs are critical to set out the rights and obligations of the landlord, tenant, and lender.

The SNDA agreement addresses how and when the tenant's rights are subordinate to the lender's rights. Non-disturbance provisions assure that the tenant's rights to the premises will be preserved and not be disturbed if the landlord defaults on its loan and the lender forecloses. Attornment provisions assure that the tenant will recognize the lender as the new landlord after foreclosure.

SNDAs include other provisions that may alter the lease terms, including the application of insurance and condemnation proceeds, notice obligations, and lender consent rights in connection with the assignment or amendment of the lease. Estoppel certifications may also be included.

Listen as our authoritative panel of real estate practitioners analyzes the purpose and objectives of SNDA agreements for lenders, tenants, and landlords and explains how to draft and negotiate SNDAs and other related provisions such as estoppel certificates.

Outline:

1. Overview of SNDAs and their objectives
2. Subordination provisions
3. Non-disturbance provisions
4. Attornment provisions
5. Additional provisions that are often included in SNDAs (estoppel, notice, use of property, casualty insurance proceeds)

Benefits:

The panel will review these and other key issues:

• The lender's objectives in negotiating the SNDA agreement and how the lender can protect the future rental stream of the property
• The tenant's objectives beyond non-disturbance of possession of the premises and rights they should seek to negotiate
• The landlord's objectives in drafting and negotiating the SNDA agreement