CRE glossary
Subordination, non-disturbance, and attornment (SNDA)
A subordination, non-disturbance, and attornment agreement (SNDA) is a three-part agreement between tenant, landlord, and landlord's lender. (1) Subordination: the tenant's lease is junior to the lender's mortgage, so foreclosure can wipe the lease. (2) Non-disturbance: the lender agrees not to terminate the tenant's lease if it forecloses, so long as the tenant isn't in default. (3) Attornment: the tenant agrees to recognize the lender (or whoever buys at foreclosure) as the new landlord and continue paying rent.
Without an SNDA, the tenant is exposed: if the landlord's lender forecloses, the lender can choose to terminate the tenant's lease and re-lease the space at higher market rent. That's a real risk in any down market. The SNDA's non-disturbance clause closes this door, the lender contractually commits to honor the tenant's lease as long as the tenant performs.
SNDAs are negotiated at lease signing or any time the building gets refinanced. The lender drafts the document, and lender-friendly defaults give tenants very little. Tenants should negotiate: (a) the non-disturbance is unconditional, not conditional on the lender's review of the lease, (b) the lender can't modify lease terms post-foreclosure, (c) the lender remains bound by tenant amendments (TI credits, free rent that hasn't been used yet), and (d) the SNDA covers any future lender (not just the current one).
Many leases include a tenant obligation to sign an SNDA whenever the landlord refinances, within 10–15 business days, similar to estoppel. Like estoppel, this can become a deal moment. Read every clause; lender drafts often slip in modifications to the underlying lease that should not be acceptable.
Example
- Lender forecloses with no SNDA
- Lease can be terminated; tenant must vacate or sign new lease at market
- Lender forecloses with SNDA
- Lease continues unchanged; lender steps in as landlord
- Tenant defaults, has SNDA
- SNDA protections fall away; lender can terminate
Broker perspective
Tenants often skip SNDAs, especially in healthy markets where foreclosure feels remote. Don't. The Brooklyn / Williamsburg multifamily defaults in 2009 left tenants without SNDAs scrambling to renegotiate from scratch with foreclosure-buyer-landlords who had no obligation to honor the original deal. Get the SNDA at signing or at the latest the next refinance.
Frequently asked
People also ask
Do I need an SNDA?
Strongly recommended for any lease over $500k total rent. Smaller deals depend on lender willingness, some won't bother for short leases.
Who drafts the SNDA?
The lender. Lender drafts default to lender-favorable. Negotiate.
Does the SNDA protect a tenant in default?
No, tenant must be in compliance with the lease for the non-disturbance protection to kick in.
What if there's no SNDA in my lease?
Ask. Most lenders will sign one even if not contractually required, especially for material tenants. The cost is paperwork.
Related terms
Estoppel certificate
A signed statement from the tenant confirming the lease terms, used by the landlord during sale or refinance.
Letter of intent (LOI)
A non-binding outline of the major business terms, rent, term, TI, options, that becomes the basis for the binding lease.
Good guy guaranty
A limited personal guaranty that protects the landlord against unpaid rent only if the tenant doesn't surrender the space cleanly.
Default and cure period
When a tenant breaches the lease and the time the landlord must give them to fix it before pursuing remedies.
See subordination, non-disturbance, and attornment (snda) extracted from a real lease.
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