SNDA -Essential for NYC Commercial Tenants

Are you leasing commercial property in the heart of New York City? Chances are, your landlord has already or will soon approach you with something called a Subordination, Non-Disturbance, and Attornment Agreement, commonly known as an “SNDA.” While the name might sound complex, its role in shaping the dynamics between tenants, landlords, and lenders is vital. In this article, we aim to provide you with a simplified understanding of SNDAs, their importance, and where to turn for guidance should you encounter one.

An SNDA is a pact involving a tenant, their landlord, and the landlord’s lender. It serves to establish a connection between the tenant and the lender, which wouldn’t naturally exist, and delineates their respective priorities. As the name implies, SNDAs comprise three core elements: subordination, non-disturbance, and attornment.


Within the subordination section of the agreement, tenants typically consent to prioritize the interests of the landlord’s lender’s mortgage or lien over their own stake in the leased premises. Lenders seek assurance that their security interests take precedence over all other property claims, including existing tenant leases. For landlords, it’s wise to incorporate automatic subordination language and SNDA execution requirements into lease documents, instilling confidence in lenders during the loan process.


On the tenant’s side, there’s a desire for assurance. They want to know that if their landlord defaults on a loan and the lender initiates foreclosure, they can continue their operations in the leased space under the new landlord, whether the lender or a transferee. This provision is crucial for tenants as it safeguards their rights. When negotiating a lease, it’s vital to inquire about the lender’s security interests and contemplate the inclusion of non-disturbance clauses in the lease terms.

The decision to request non-disturbance and invest resources in negotiating it hinges on several factors, including the rental rate, the property’s potential for redevelopment, and potential purchasers in foreclosure scenarios. Consulting with a seasoned commercial real estate attorney can provide invaluable guidance in striking a balance between these interests.


The attornment provision ensures that if foreclosure occurs, the tenant acknowledges the lender as the new landlord. Without this provision, tenants might be able to terminate the lease in a foreclosure situation.

When to Negotiate an SNDA:

Timing is of the essence. Negotiating an SNDA before signing the lease offers tenants the greatest leverage. At this stage, landlords are eager to close deals, and lenders are motivated to secure tenants who can meet debt-service requirements. After the lease is executed, lenders hold more leverage, and tenants may already have commitments related to SNDA compliance.

Considerations in SNDA Negotiations:

When negotiating an SNDA, be mindful of key provisions, including subordination terms, post-foreclosure liability of the new landlord, rent-related matters, security deposits, and lease amendments. These aspects should be meticulously negotiated with the assistance of legal counsel.

Negotiating an SNDA is a nuanced process that demands a delicate balance between the interests of lenders and tenants. Determining whether to request one and investing the necessary time and resources is a complex decision. A seasoned commercial real estate attorney experienced in SNDAs can help navigate these complexities and ensure a fair equilibrium among all parties involved.

Whether you’re a tenant, landlord, or lender seeking guidance on lease provisions or SNDA negotiations, don’t hesitate to contact the Wright Law Firm for assistance at (212) 619-1500.