Escrow & Title
What is a 'subordination agreement' in Delaware real estate financing?
AAn agreement by a senior lien holder to accept payments after a junior lien is paid
BAn agreement by a lienholder to accept a lower priority position relative to another lien — often required when refinancing or adding new financing
CAn agreement by a tenant to subordinate their lease rights to the lender's mortgage
DBoth B and C — subordination agreements are used in both mortgage and lease contexts✓ Correct
Explanation
Subordination agreements are used in two real estate contexts: (1) mortgage subordination — a senior lienholder agrees to accept a lower priority to allow a new lender a superior position; (2) lease subordination (SNDA) — a tenant agrees their lease rights are subordinate to the lender's mortgage. Both protect lenders and are common in Delaware commercial real estate transactions.
Related Delaware Escrow & Title Questions
- What is a 'limited warranty deed' (also called a special warranty deed) in Delaware?
- A cloud on title refers to:
- What is the difference between 'joint tenancy' and 'community property' in Delaware?
- What is a 'mortgagee clause' in a Delaware property insurance policy?
- What is an 'escrow holdback' in a Delaware real estate closing?
- In Delaware, which of the following is TRUE about the escrow process in a residential closing?
- What is 'chain of title' in Delaware real estate?
- What is a 'first right of refusal' in a Delaware commercial lease?
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →