What Is a Subordination Non-Disturbance & Attornment Agreements?

Subordination non-disturbance and attornment agreements are typically part of a lease agreement.

A tenant signs a lease agreement promising to pay her rent on time and meet certain other requirements. Sometimes, however, the landlord fails to meet his obligations by failing to pay his mortgage. Subordination, Non-Disturbance and Attornment Agreements (SNDA) can protect the tenant in these situations.

Subordination

In SNDA agreements, the tenant acknowledges that the mortgage holder has primary rights to the property. This protects the investment of the lender by asserting that the lease is subordinate to the mortgage.

Non-Disturbance

The tenant signing an SNDA is guaranteed that her privacy and premises will be undisturbed as long as her obligations are met, even if the landlord defaults on the mortgage. This protects the tenant from automatic eviction in case of loan default.

Attornment

In the attornment portion of SNDA agreements, the tenant states that she will continue paying their monthly rent payments even if ownership transfers to another landlord. Tenants are also allowed to break their lease in the event of a foreclosure of the property.

References

• Association of Corporate Counsel: The Benefits of Subordination, Non-Disturbance and Attornment Agreements
• McCandlish & Lillard, P.C.: Subordination, Non-Disturbance and Attornment Agreements
• USLegal: Subordination, Non-Disturbance and Attornment Agreements Law & Legal Definition

Resources

• Freddie Mac: Form for Subordination Non-Disturbance & Attornment Agreements