To fill out an SNDA agreement, start with the form the lender’s counsel sends you, verify every pre-filled field against your signed lease and its amendments, negotiate the lender-protective provisions that matter to your tenancy, and then execute the document before a notary so it can be recorded at the county. An SNDA — subordination, non-disturbance, and attornment agreement — is a three-party contract among you, your landlord, and the landlord’s mortgage lender that fixes lien priority and spells out what happens to your lease if the landlord defaults on the loan.
What You Are Agreeing To in Each Clause
Three separate commitments sit inside one document. Reading them as one block is how tenants miss what they are giving up and what they are getting in return.
Subordination
You agree that the lender’s mortgage takes priority over your lease, even if the lease predates the recorded mortgage. You are voluntarily dropping to a lower position in the property’s chain of claims. Lenders insist on this because a senior lease could block a clean foreclosure or a sale free of occupancy rights. It is the concession you make to earn the next clause.
Non-Disturbance
In exchange, the lender promises that as long as you are honoring your lease, the lease survives a foreclosure. The lender cannot terminate it or interfere with your use of the space during or after foreclosure.1American College of Real Estate Lawyers. Tenants Form Subordination, Non-Disturbance, and Attornment Agreement – Section: Non-Disturbance of Tenant This is what lets a retail or office tenant keep operating through a landlord’s financial trouble. Read how “compliance” is defined. Some lender forms set the bar so low that minor or technical lease violations trigger loss of the protection.
Attornment
You agree to recognize whoever acquires the property through foreclosure as your new landlord and to keep paying rent and performing under the existing lease without renegotiation.2American College of Real Estate Lawyers. Tenants Form Subordination, Non-Disturbance, and Attornment Agreement – Section: Attornment Confirm the obligation runs both ways. The successor owner should also be bound by the lease, including landlord obligations like maintaining common areas or funding tenant improvements.
Information to Verify Before You Sign
Lender’s counsel usually sends the form already populated with loan details. Your job is to check every field against the original lease and any amendments. Errors in party names, dates, or property descriptions delay closings and create title problems later.
- Full legal names of tenant, landlord, and lender exactly as they appear on the lease and loan documents. Entity names must match formation papers. “ABC Holdings LLC” and “ABC Holdings, LLC” are not the same for recording purposes.
- The effective date of the original lease plus the date and description of every amendment, extension, or renewal. If the lease has been modified five times, every modification needs to be listed.
- A legal property description, usually metes-and-bounds or lot-and-block, not just a street address. Pull it from the deed or the mortgage exhibit. The parcel identification number should match across all documents.
- The book and page number or instrument number where the mortgage was recorded at the county. This ties the SNDA to the correct loan.
- Current rent, security deposit amount, and any prepaid rent. These figures feed into the lender-exclusion provisions you will want to negotiate.
Lease abstracts help you pull dates and square footage together quickly, but verify every entry against the signed documents. A discrepancy between the SNDA and the recorded lease creates ambiguity that helps no one.
Provisions to Push Back On
The form reflects the lender’s interests because the lender’s attorneys drafted it. Signing without review is a common and expensive mistake. A few standard provisions almost always deserve negotiation.
Lender Consent for Lease Changes
Most lender-drafted SNDAs prohibit you from prepaying rent or agreeing to any amendment, termination, or assignment without the lender’s written consent. If you modify the lease without that approval and a foreclosure follows, the lender can treat the original, unmodified lease as the controlling document. You could end up bound to terms you thought you had already renegotiated.
Ask for carve-outs. Assignments your lease already permits without landlord consent should not suddenly require lender approval. Non-material amendments — signage rule tweaks, minor adjustments to permitted use, administrative corrections — should sit outside the consent requirement.
Security Deposit Liability
Lenders generally refuse responsibility for your security deposit unless the landlord actually transferred the funds to them. If the landlord collected a six-figure deposit, spent it, and then lost the property, the successor owner may disclaim any obligation to return it. One protective move is to require the landlord to place the security deposit with the lender for the life of the loan rather than leaving it in the landlord’s general accounts.
Prior Landlord Defaults
Lender forms almost always exempt the lender or any foreclosure buyer from liability for the prior landlord’s breaches. If your landlord owed you a tenant improvement allowance or was mid-construction when the foreclosure hit, the new owner may refuse to honor it. Try to narrow the exclusion. One reasonable position: a successor must cure ongoing defaults within its practical ability to fix, even if it is not liable for past monetary damages.
Self-Help and Rent Offset Rights
Many commercial leases let the tenant fix problems the landlord ignores, such as a leaking roof or broken HVAC, and deduct the cost from rent. Lenders dislike these clauses because they cut cash flow. The SNDA may try to strip or limit them. If your lease includes self-help remedies, confirm the SNDA does not override them, or at minimum negotiate a reasonable cap instead of a total elimination.
The Estoppel Certificate That Often Arrives With It
Lenders usually request an estoppel certificate alongside the SNDA, and the two get confused. They are different documents. The SNDA is a contract that changes legal priorities and creates new rights between you and the lender. An estoppel certificate is a factual snapshot: you confirm in writing that the lease exists, state the current rent, identify the expiration date, and disclose whether either party is in default.
A typical estoppel confirms lease start and end dates, current rent, any prepaid rent, any offset or lien claims, and whether the tenant is in bankruptcy. Once signed, you are locked into those representations and cannot later claim the facts were different. The lender uses the certificate to verify the property’s income stream before funding.
Your lease will often require you to produce both documents within a set number of days of a request. Refusing can put you in default, so the practical question is not whether to sign but what to negotiate first.
Signing, Notarizing, and Recording
All three parties sign through authorized representatives. If a party is an entity, the signer needs actual authority: an officer, a member-manager, or someone acting under a board resolution or power of attorney that binds the entity. Signatures must be notarized. The notary verifies each signer’s identity and applies the acknowledgment seal that makes the document eligible for recording. Without a proper acknowledgment, most county recorders will reject the filing.
After notarization, the original typically goes to the lender or its title company. The final step is recording the SNDA with the county recorder, sometimes called the registry of deeds, in the county where the property sits. Recording creates a public record of the agreement and puts future buyers, lenders, and title companies on notice of the lien priority arrangement. Recording fees vary by jurisdiction and page count, running from roughly $10 to $80 or more depending on local rules. The landlord or borrower usually covers these costs as part of the loan closing.
Many counties now accept electronic submissions through e-recording portals, which can speed the process considerably. Check with the county recorder’s office for formatting requirements and accepted submission methods before you file.