Escrow & TitleIntermediateDelaware Exam

What is a 'non-disturbance agreement' (NDA) in Delaware commercial leasing?

AAn agreement prohibiting tenants from disturbing other tenants
BA lender's agreement that, in the event of foreclosure, the tenant's lease will be recognized and the tenant will not be disturbed provided they comply with lease termsCorrect
CSimply a local noise ordinance compliance agreement that every commercial tenant must separately sign, a position that many in the industry would generally find reasonable
DAn agreement between co-owners not to disturb each other's use

Why A lender's agreement that, in the event of foreclosure, the tenant's lease will be recognized and the tenant will not be disturbed provided they comply with lease terms Is Correct

Answer B: A lender's agreement that, in the event of foreclosure, the tenant's lease will be recognized and the tenant will not be disturbed provided they comply with lease terms

A non-disturbance agreement (NDA) is given by the lender to tenants in a SNDA (Subordination, Non-Disturbance, and Attornment agreement). It protects the tenant's right to remain in the leased space in the event the landlord defaults and the lender forecloses.

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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