WHO'S ON FIRST—PROTECTING THE COMMERCIAL MORTGAGE LENDER: A Lender's Overview of Subordination, Nondisturbance, and Attornment Agreements

A subordination, nondisturbance, and attornment agreement (SNDA) provides a set of contractual terms that govern the relationship between a lender and a tenant should the owner-lessor default on its mortgage loan. A properly drafted SNDA utilizes the 3 legal doctrines to provide the lender with the ability to ensure, if it so elects, that its rights under its mortgages are prior to any of the tenant's rights in the property and to preserve the lease under terms that are satisfactory to both lender and tenant. SNDAs provide on of the sole venues where lenders and tenants can negotiate terms without the threat of an impending foreclosure. By using SNDAs, lenders and tenants can protect their vital interests and reduce, if not eliminate, the uncertainties, exposures, and liabilities that would otherwise accompany a foreclosure if the parties allowed the law to dictate the income.