Property ManagementIntermediateDelaware Exam

What is 'lease subordination, non-disturbance, and attornment agreement' (SNDA) in Delaware commercial real estate?

ASimply an informal agreement between the buyer and seller only about lease assumption terms at closing, in general

BAn agreement among the landlord, tenant, and lender: the tenant subordinates their lease to the mortgageCorrect

CAn agreement between a property manager and owner about lease authority

DA Delaware government form required for all commercial leases

Why An agreement among the landlord, tenant, and lender: the tenant subordinates their lease to the mortgage Is Correct

Answer B: An agreement among the landlord, tenant, and lender: the tenant subordinates their lease to the mortgage

An SNDA is a three-party agreement: (1) Subordination: the tenant agrees their lease is junior to the lender's mortgage; (2) Non-disturbance: the lender agrees not to terminate the lease in foreclosure as long as the tenant is not in default; (3) Attornment: the tenant agrees to recognize the new owner after foreclosure. SNDAs provide comfort to both tenants (their lease survives foreclosure) and lenders (the tenants will cooperate).

Exam Tip: Property Management

Property management questions cover landlord-tenant law, security deposits, and maintenance responsibilities. Know the differences between gross, net, and percentage leases.

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