SNDA

An SNDA is an agreement among tenant, landlord, and the landlord’s lender covering what happens to the lease if the lender forecloses. The acronym names its three parts, and each protects a different party.

Subordination

The tenant agrees its lease is subordinate to the lender’s mortgage. Without this, a lease signed before the mortgage would have priority, and a foreclosure would leave the lender unable to clear it. Lenders require subordination as a condition of financing.

This part protects the lender.

Non-disturbance

The lender agrees that so long as the tenant is not in default, its possession will not be disturbed by a foreclosure. The lease survives and continues on its terms with the new owner.

This part protects the tenant, and it is the reason a tenant should want an SNDA rather than merely tolerate one. Subordination without non-disturbance leaves a tenant exposed to losing a valuable below-market lease in a foreclosure — which is exactly when the landlord is least able to help.

Attornment

The tenant agrees to recognize the foreclosing lender or a purchaser as its new landlord and continue performing under the lease.

This part protects whoever ends up owning the building, by ensuring the rent stream continues without renegotiation.

Practical notes

Tenants with significant investment in a space — heavy tenant improvements, a below-market rate, a long term — should treat non-disturbance as a real negotiating point rather than a formality. It is often available simply for asking, and its absence only becomes visible at the worst possible moment.

SNDAs are frequently requested alongside estoppel certificates during a financing or sale, under the same short deadlines. Keeping executed SNDAs stored against the lease they belong to, with the parties recorded, avoids reconstructing them later.