Subordination, Non-disturbance, and Attornment Agreement
(Pro-Lender) (MD)

Summary

This subordination, non-disturbance, and attornment agreement (SNDA) template may be used in a Maryland acquisition loan transaction when a mortgaged property in Maryland is subject to existing tenancies. This template includes practical guidance, drafting notes, and alternate and optional clauses. By executing an SNDA, the tenant agrees to subordinate its leasehold interest in the leased premises to the lien of the lender's mortgage, and to recognize and attorn to any subsequent landlord who acquires title to the mortgaged property (e.g., by means of a foreclosure sale). In turn, the lender agrees not to terminate or disturb the tenant's rights under its lease if the tenant is not in default when the lender forecloses on the mortgaged property. Deeds of trust and mortgages are used to secure debt in Maryland, but deeds of trust are the prevailing type. Md. Code Ann., Real Prop. § 7-101. This template uses the term mortgage but can be modified if required. This SNDA is drafted from the perspective of the lender but contains drafting notes and guidance for the tenant. This SNDA may be recorded in the property records where the real property is located; however, it needn't be recorded to be enforceable. Recording the SNDA puts third-party buyers on notice that the tenant's lease cannot be terminated by purchase of the property at a foreclosure sale. For more information on recording procedures, see Recording Real Property Documents. For further information on SNDAs, see Subordination, Non-disturbance, and Attornment Agreements in an Acquisition Loan. For information on Maryland commercial real estate leasing, see Commercial Real Estate Leasing (MD). For information on financing Maryland commercial real estate, see Commercial Real Estate Financing (MD). For general information on acquisitions, see Real Estate in Asset Acquisitions Resource Kit and Real Estate in Stock Acquisition Resource Kit. For general information on mergers, see Real Estate in Mergers Resource Kit.