Escrow & TitleIntermediateArizona Exam

A 'subordination, non-disturbance, and attornment agreement' (SNDA) in an Arizona commercial lease transaction protects:

AThe seller's reversionary interest in the property after the lease term ends and the tenant surrenders possession
BThe tenant's right to remain in the property if the landlord defaults and a lender forecloses, in exchange for the tenant recognizing the lender's priorityCorrect
CThe lender's right to accelerate the full loan balance immediately upon any technical default under the deed of trust
DThe landlord's right to renegotiate rent above the lease rate with any court-appointed receiver following the lender's foreclosure

Why The tenant's right to remain in the property if the landlord defaults and a lender forecloses, in exchange for the tenant recognizing the lender's priority Is Correct

Answer B: The tenant's right to remain in the property if the landlord defaults and a lender forecloses, in exchange for the tenant recognizing the lender's priority

An SNDA provides: Subordination (tenant's lease is junior to the mortgage), Non-Disturbance (lender won't disturb tenant's possession if they're not in default), Attornment (tenant recognizes the new owner after foreclosure). It protects both the lender and the tenant.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

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