SNDA (Subordination, Non-Disturbance & Attornment Agreement)

A SNDA, or Subordination, Non-Disturbance and Attornment Agreement, is a three-part contract between a landlord, tenant, and lender that clarifies priority and tenant rights in the event of a mortgage default. The subordination portion places a lease below the mortgage priority; the non-disturbance provision ensures tenants can remain under their lease if the lender forecloses, provided they are not in default; and attornment requires the tenant to recognize a new owner or lender as landlord following foreclosure. SNDAs reduce uncertainty for tenants and lenders alike.

Lenders require executed SNDAs during underwriting to ensure lease priority and income continuity, while tenants want non-disturbance protection to secure occupancy. Brokers should coordinate SNDA signatures as part of closing deliverables, ensuring tenants understand their post-foreclosure obligations and rights. Negotiate the SNDA language to limit tenant covenants that could hinder lender remedies and to define conditions for non-disturbance, such as payment status and lease compliance. Accurate SNDA handling preserves cash flow assumptions used in loan underwriting.

SNDAs are important because they balance the lender's need for priority against the tenant's need for occupancy security, which supports property value and debt service. Without a SNDA tenants may face eviction after foreclosure, which can reduce rent collection and asset recoverability. Properly executed SNDAs maintain stable income for the lender and reassure tenants, reducing vacancy risk and litigation. For sponsors and brokers timely SNDA execution is essential to satisfy lender CPs and avoid funding delays.