SNDA (Subordination, Non-Disturbance & Attornment Agreement)

The three provisions, and why they have to travel together

Subordination alone would be dangerous for a tenant: without more, a foreclosing lender that outranks the lease could treat the tenant's occupancy as extinguished along with every other junior interest, forcing the tenant out regardless of how much term is left. Non-disturbance is the trade the tenant gets in return — the lender's contractual promise that a foreclosure will not disturb the tenant's possession as long as the tenant keeps performing under the lease.

Attornment closes the loop: it obligates the tenant to accept the lender (or whoever buys the property at foreclosure) as its new landlord under the same lease terms, rather than treating foreclosure as a way out of the deal. A lease can technically subordinate without a non-disturbance promise — that combination is the one tenants' counsel push back on hardest, since it gives the tenant none of the protection the "ND" is supposed to provide.

When an SNDA is required

• ✓New financing or refinancing: the lender's loan committee typically requires SNDAs from all major tenants, sometimes every tenant above a minimum square-footage or rent threshold, before closing
• ✓Most commercial leases contain an SNDA clause obligating the tenant to sign one within a set number of days of a lender's request — mirroring the estoppel timing mechanic, and sometimes in the same clause
• ✓Ground leases: the leasehold mortgagee (lender to the tenant/ground-lessee, not the landlord) often needs its own recognition agreement running the other direction — a distinct document from a standard SNDA and easy to confuse with it
• ✓Sale-leaseback and net-lease portfolios: buyers financing the acquisition typically make delivery of signed SNDAs from key tenants a closing condition, run alongside estoppels

SNDA vs. estoppel certificate

The two documents are requested together and often confused, but they do different jobs. An estoppel certificate is backward- and present-looking: it confirms the facts of the lease as they stand today — rent, term, deposits, defaults. An SNDA is forward-looking: it governs what happens to the lease relationship if the landlord's lender forecloses, and it changes legal priority (subordination) rather than just confirming facts.

A lease abstract should capture both as separate obligations, because they carry separate response deadlines, separate signature thresholds (a deal may need estoppels from 75% of tenants but SNDAs only from anchors, or vice versa), and separate downstream uses — the estoppel feeds the rent roll reconciliation, the SNDA feeds the lender's title and collateral review.

Traps our specialists check for

• ✓Non-negotiated subordination: some older leases subordinate automatically to any future mortgage with no non-disturbance protection at all — a gap worth flagging before a refinancing puts a tenant's leverage at risk
• ✓Self-executing vs. requires-execution language: some leases state the subordination is "self-executing" upon the lender's request, meaning the tenant may already be legally subordinated even without a signed SNDA on file — the abstract needs to distinguish a lease clause from an actual signed agreement
• ✓Recognition scope gaps: an SNDA that protects the base lease but is silent on renewal options, expansion rights, or a right of first refusal can leave those rights unenforceable against a foreclosure buyer
• ✓Non-disturbance conditioned on tenant estoppel: some SNDA forms make the lender's non-disturbance promise conditional on the tenant separately delivering estoppels on request — missing that condition in the abstract means missing a live compliance obligation