Subordination, Non-Disturbance, and Attornment (SNDA) Agreements

Learn how a subordination, non-disturbance, and attornment agreement is and how it will affect you in a foreclosure.

By , J.D. · UCLA School of Law

Commercial leases often contain what is called a subordination, non-disturbance, and attornment agreement (SNDA). SNDAs outline certain rights of the tenant, the landlord, and related third parties, like the landlord's lender or a property purchaser.

The three parts of an SNDA are the subordination clause, the non-disturbance clause, and the attornment clause. Including an SNDA in a commercial lease benefits both tenants and landlords.

What Is a Subordination Clause?

When tenants sign off on a subordination clause in an SNDA, they agree to allow their interest in the property (also known as a "leasehold") to become junior to the interest of a third-party lender.

Commercial landlords often require subordination clauses in their leases to preserve the possibility of using the building as loan collateral. Most lenders won't allow a commercial property to serve as security for a loan unless their mortgage interest is superior to any tenants' leasehold interests. So, in the event of commercial foreclosure, the lender can terminate the tenant's lease.

Why would a commercial tenant agree to give a lender this right? Commercial tenants often don't have the negotiating power to refuse to sign a subordination clause. To protect its leasehold interest, the tenant should do its best to ensure the SNDA includes a non-disturbance clause, described below.

How Non-Disturbance Clauses Work

In exchange for agreeing to subordinate their interest to a lender's interest and recognize any new owner as the landlord (see "The Attornment Clause" below), tenants should ensure that the SNDA has a strong non-disturbance clause. A non-disturbance agreement gives tenants the right to continue occupying the leased premises if they're not in default—even after the property is sold or foreclosed.

The non-disturbance clause assures tenants that their rights to the premises will be preserved even if the landlord doesn't fulfill its duty to pay the lender. Being confident they can remain in a location for the full lease term is essential to business tenants because changing locations can potentially lead to unexpected expenses, inconvenience, and loss of customers.

Whether a landlord will agree to include a non-disturbance clause in the SNDA depends on the tenants' negotiating power.

The Attornment Clause

An "attornment" is the act by which tenants acknowledge a new property owner as their new landlord. The attornment clause in an SNDA obligates the tenants to accept a new owner as their landlord, regardless of whether the new owner acquires the property in a typical sale or following a foreclosure.

The clause provides that, in the event that ownership is transferred, the new owner essentially replaces the former owner in the lease, assuming all of the former owner's rights and responsibilities. Perhaps most importantly, the clause requires the tenants to continue to pay rent regardless of who owns the property.

Getting Legal Assistance

Whether you are a commercial landlord or tenant, it's important to remember that many legal intricacies are involved with commercial leasing. It might be beneficial to employ the services of a qualified attorney to help you prepare or agree to an SNDA.

Talk to a Foreclosure attorney.
We've helped 75 clients find attorneys today.
There was a problem with the submission. Please refresh the page and try again
Full Name is required
Email is required
Please enter a valid Email
Phone Number is required
Please enter a valid Phone Number
Zip Code is required
Please add a valid Zip Code
Please enter a valid Case Description
Description is required

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you