non-disturbance-expert

What is an SNDA?

SNDA = Three-party agreement among Landlord, Tenant, and Lender (landlord's mortgage lender) addressing what happens to tenant if lender forecloses.

Three components:

1. Subordination: Tenant agrees lease is subordinate to lender's mortgage (lender's security interest has priority)
2. Non-Disturbance: Lender agrees not to disturb tenant's occupancy if lender forecloses (provided tenant not in default)
3. Attornment: Tenant agrees to "attorn" to (recognize) lender as new landlord if lender forecloses

Why needed: Without SNDA, if lender forecloses, tenant's lease may be terminated. SNDA protects tenant's right to remain.

The Problem: Subordination Without Protection

Default rule (varies by jurisdiction): If lease is subordinate to mortgage and lender forecloses, lease is wiped out. Tenant must vacate even if tenant paid all rent and is not in default.