Contracts

In Hawaii, what is a 'subordination, non-disturbance, and attornment' (SNDA) agreement typically used for?

AA. In residential transactions to address homeowner association fees
BB. In commercial real estate to coordinate lender, landlord, and tenant rights when a property is sold or foreclosed✓ Correct
CC. In condo transactions to address common area maintenance
DD. In agricultural land transactions involving water rights

Explanation

An SNDA agreement in commercial real estate establishes the relationship between a lender, landlord, and tenant: the tenant's lease is subordinate to the mortgage (subordination), but the lender won't terminate the lease if the borrower defaults (non-disturbance), and the tenant agrees to recognize the new owner after a foreclosure (attornment).

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