Property Management
What is a subordination clause in a commercial lease?
AA clause making the tenant subordinate to the landlord
BA clause where the tenant agrees their leasehold interest is subordinate to any mortgage on the property✓ Correct
CA clause reducing rent for long-term tenants
DA clause requiring tenant permission for property sale
Explanation
A subordination clause in a commercial lease makes the tenant's leasehold interest subordinate to the landlord's mortgage. This is typically paired with a non-disturbance provision (SNDA) ensuring the tenant will not be disturbed if the lender forecloses.
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