Attornment is most often associated with real estate rights and aims to recognize the relationship between the parties in a transaction. For example, there may be a separation if a tenant rents an apartment just for the landlord to change during the lease. The agreement does not create new rights for the landlord unless the tenant signs them. The landlord can use a tenant`s refusal to sign as a ground for eviction. Tenants should focus on the scope of subordination and attration. Does it apply only to the current mortgage lender? Or does it also apply to new mortgages or other financial privileges? Owners and lenders will want the scope to be as broad as possible. For tenants, a narrower scope is preferable. Attornment occurs when a tenant recognizes a new owner of the property as the new owner. According to English customary law, attornment was the recognition and acceptance of a new lord by the tenant. As the name suggests, an SNDA consists of three chords, all packed in a neat package.
The three aspects of the SNDA only come into play if the leased property is forcibly auctioned by a lender with a security (mortgage or escrow deed) secured by the rental property. First, let`s look at the “Subordination” part of the SNDA. If the lease exists at the time the lender registers its security right in the asset, the lease is greater than the security right and, in the case of performance by the lender, the title obtained by the buyer at the foreclosure auction is subordinated to or subject to the existing lease. When a tenant signs an SNDA, they agree to reverse the priorities and the result of the resulting foreclosure.