Subordination, Non-Disturbance, and Attornment Contract (SNDA) (Lender-friendly) (Texas)

This legal template for a Subordination, Non-Disturbance, and Attornment Contract (SNDA) is specifically designed to be lender-friendly and applicable in the state of Texas.

The Subordination, Non-Disturbance, and Attornment Contract (SNDA) is a vital legal agreement typically executed in the context of a real estate transaction involving a mortgage or lease. It involves three key parties: the lender providing the mortgage loan, the tenant occupying the property, and the landlord who owns the property.

The primary purpose of the SNDA is to establish the respective rights and obligations of these three parties in the event of default or foreclosure.

Firstly, the agreement addresses subordination, which means that the tenant's leasehold interest in the property is typically made subject and subordinate to the lender's mortgage. In other words, the lender's rights have priority over the tenant's rights during foreclosure proceedings. This clause provides security to the lender, ensuring that their claims take precedence over the tenant's claims.

Secondly, the SNDA includes provisions for non-disturbance, which aims to protect the tenant's occupancy and leasehold rights in the event of foreclosure by the lender. This provision prevents the lender from terminating the lease or ousting the tenant following a foreclosure, as long as the tenant is not in default of their lease obligations. By signing this agreement, the tenant gains assurance that their tenancy will remain undisturbed, even if there is a change in property ownership due to foreclosure.

Lastly, the contract covers the attornment clause, which solidifies the tenant's agreement to recognize and attorn to the new owner or the lender if ownership changes hands following foreclosure. Essentially, the tenant commits to acknowledging the new landlord or lender as the rightful party with whom they should communicate, pay rent, and perform their lease obligations. This provision is crucial for maintaining a smooth transition between property owners and ensuring continued compliance with the lease terms.

Overall, this legal template provides a comprehensive and lender-friendly framework for establishing the rights and obligations of lenders, tenants, and landlords in a real estate transaction, particularly in the Texas jurisdiction. It aims to protect the lender's interests, preserve the tenant's occupancy rights, and facilitate a seamless transition in the event of foreclosure or change of ownership.