Escrow & Title
A Massachusetts first mortgage contains a 'subordination, non-disturbance, and attornment agreement' (SNDA) for tenants. This protects the tenant by:
AGuaranteeing the tenant's rent will not increase
BProviding that if the lender forecloses, the tenant's lease will not be disturbed as long as the tenant complies with lease terms✓ Correct
CMaking the tenant's lease superior to the mortgage
DAllowing the tenant to occupy without paying rent if the landlord defaults
Explanation
An SNDA agreement protects commercial tenants by providing: the tenant subordinates to the mortgage (Subordination), the lender agrees not to disturb the tenancy upon foreclosure (Non-Disturbance), and the tenant agrees to recognize the lender/new owner as landlord (Attornment).
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Key Terms to Know
Listing Agreement
A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
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