Property Management
A Virginia commercial lease 'subordination' clause means:
AThe tenant's lease has priority over the landlord's mortgage
BThe tenant's lease is subordinate (inferior) to existing or future mortgages on the property✓ Correct
CThe tenant cannot sublease
DThe landlord cannot sell the property
Explanation
A subordination clause makes the tenant's leasehold interest subordinate to the landlord's mortgage, meaning a foreclosing lender could extinguish the lease. Non-disturbance agreements protect tenants in these situations.
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Key Terms to Know
Short Sale
A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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