skip to Main Content
What Is An SNDA, And When Do I Need One?

What Is an SNDA, and When Do I Need One?

Avatar photo
What Is An SNDA, And When Do I Need One?

A subordination, non-disturbance, and attornment agreement (SNDA) is a common provision in real estate transactions involving a leased property. Although it’s a long title, it’s not too complicated to understand what the contract does.

SNDAs are standard in lease agreements and establish the relationship between a landlord’s lender and a tenant. It also outlines each party’s responsibilities and addresses various matters involved in the relationship. 

What Is an SNDA?

An SNDA consists of three primary components:


The SNDA includes a subordination provision. This means the tenant agrees to subordinate their interests in the property to the lender’s mortgage with the landlord. When a lender considers taking a security interest in the real property of a landlord as collateral for repayment of the loan, they want to ensure that the security deed takes priority over other interests in the property.

A security deed that is recorded before entering into a lease agreement automatically takes priority over any other interest in the real property, including the existing tenant’s rights. However, commercial property landlords should confirm that the contract contains subordination language and requires tenants to sign an SNDA upon request. A subordination provision makes obtaining capital easier for the landlord, and the lender feels more comfortable during the underwriting process.


The subordination provision protects a lender’s interest in real property. They want to ensure the agreement prioritizes their security deed over the lease.

Similarly, tenants want to protect themselves. They want to take measures to continue operating for the rest of the lease term on the premises despite the landlord defaulting on the loan and the lender foreclosing on the property.

The non-disturbance provision can be valuable to a tenant conducting business on leased property. If the lease agreement doesn’t include this provision, the foreclosing lender can prioritize their security deed. Additionally, the transferee could refuse to honor the lease terms and the tenant’s possession rights.

A tenant should ask about security interest in the property held by any lenders while negotiating the lease agreement terms. Upon discovering those interests, they should include a clause for the lender to enter into a non-disturbance arrangement under specific circumstances.


Under an attornment provision, the tenant agrees to attorn to the lender as the new landlord if the property forecloses. This provision protects the lender or transferee by establishing that the tenant will recognize them as the landlord under the lease terms. Without it, the tenant could walk away from their agreement if foreclosure occurs.

Do I Need One?

Multiple parties can benefit from executing an SNDA, including:

  • Lender – A lender takes a substantial risk when taking a lien on real property. The provisions of an SNDA in a lease agreement can protect them if they become the property owner or other circumstances apply.
  • Tenant – Tenants depend on the stability of a lease agreement when conducting business on someone else’s premises. With an SNDA, a tenant can establish their right to remain on the property for the rest of the lease term even if the landlord defaults on their loan.
  • Landlord – As a landlord, creating an SNDA isn’t as crucial. Some of the terms aren’t necessary for their real estate transactions. However, specific SNDA provisions should become effective if the landlord defaults on their loan and loses their interest in the property. Since executing a lease agreement with an SNDA provision isn’t expensive, it might be beneficial to include it.

How We Can Help

Mullen Holland & Cooper P.A. provides comprehensive services to clients involved in sales, leases, contracts, financing, and other real estate matters. We will protect your interests and future while representing you. Our Gastonia commercial real estate legal team has more than 70 years of experience assisting tenants, lenders, and landlords with their cases.

Call us at 704-864-6751 right now for your initial consultation with us, where you can learn more about what we can do for you.

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments
Back To Top