Drafting SNDA agreements manually requires extensive research across multiple legal resources, careful coordination of subordination and non-disturbance provisions, and meticulous review of lease and loan documents. Attorneys spend hours searching for jurisdiction-specific templates, verifying standard clauses from bar associations, and ensuring all three parties' interests are properly balanced.
Drafting Subordination, Non-Disturbance, and Attornment Agreements requires meticulous review of lease and loan documents, careful balancing of competing interests among landlords, tenants, and lenders, and precise legal drafting to protect all parties. Manual SNDA preparation typically takes 4-5 hours of attorney time, involving extensive document review, cross-referencing terms, and ensuring all provisions align with the underlying transaction documents.
CaseMark automates SNDA creation by analyzing your lease agreements and loan documents to generate comprehensive, balanced agreements in minutes. Our AI extracts critical information from all transaction documents, ensures consistency across party names and property descriptions, and drafts tailored subordination, non-disturbance, and attornment provisions that protect tenant rights while securing lender priority.
This workflow is applicable across multiple practice areas and use cases
SNDAs are essential documents in commercial lending transactions where lenders require subordination agreements to protect their security interests in financed properties with existing leases.
Loan and financing attorneys regularly draft SNDAs to ensure lender priority while protecting tenant rights, making this workflow directly applicable to their core practice area.
Commercial leasing attorneys need SNDAs to protect tenant interests when landlords refinance or when negotiating lease terms that address future financing scenarios.
SNDAs are frequently negotiated as part of commercial lease transactions, particularly for major tenants who require non-disturbance protection as a condition of their lease.
Financial services attorneys advising banks and lending institutions use SNDAs to structure loan documentation and ensure proper subordination hierarchies in commercial real estate financing.
Financial institutions require SNDAs as standard loan documentation for commercial properties with tenants, making this workflow valuable for regulatory compliance and risk management.
Corporate finance attorneys handling real estate-backed financing transactions need SNDAs when structuring secured lending arrangements or corporate acquisitions involving income-producing properties.
SNDAs are critical in corporate financing deals involving commercial real estate assets, particularly in sale-leaseback transactions and asset-based lending scenarios.
An SNDA is a tri-party agreement among a landlord, tenant, and lender that establishes the priority of the lender's mortgage over the tenant's lease (subordination), protects the tenant's right to remain in possession if the lender forecloses (non-disturbance), and requires the tenant to recognize a new owner as landlord (attornment). This agreement is typically required by commercial real estate lenders as a condition of financing and protects all parties' interests in the event of foreclosure or ownership transfer.
CaseMark analyzes your uploaded lease agreement and loan documents to extract critical information including party details, property descriptions, lease terms, loan amounts, and recording information. The AI then generates a comprehensive SNDA with tailored subordination provisions, non-disturbance protections conditioned on tenant performance, attornment covenants, representations and warranties, and notice requirements. All provisions are customized based on the specific terms of your transaction documents and the chronological relationship between the lease and mortgage.
A comprehensive SNDA should include: (1) subordination language making the lease subject to the mortgage; (2) non-disturbance covenant protecting tenant occupancy if the lender forecloses, conditioned on tenant performance; (3) attornment provisions requiring tenant recognition of successor landlords; (4) limitations on successor landlord liability for prior landlord defaults; (5) notice and cure rights allowing the lender additional time to remedy defaults; (6) restrictions on lease modifications without lender consent; and (7) representations from all parties regarding the status of the lease and loan. CaseMark automatically includes all essential provisions tailored to your transaction.
Under common law, the priority between a lease and mortgage is generally determined by which was recorded first. If the lease predates the mortgage, the tenant's rights may be superior to the lender's lien, meaning the lease could survive foreclosure without subordination. If the mortgage predates the lease, the lender's lien is already superior. Lenders typically require SNDAs regardless of timing to ensure clear priority and establish the terms under which the lease will continue after foreclosure, providing certainty for all parties.
Manual SNDA preparation typically requires 4-5 hours of attorney time to review the lease and loan documents, extract relevant information, verify consistency across documents, draft tailored provisions balancing all parties' interests, and ensure proper execution formalities. CaseMark reduces this process to approximately 15 minutes by automating document review, information extraction, and initial drafting, allowing attorneys to focus on final review and any transaction-specific customizations rather than starting from scratch.