Subordination means an agreement to put a debt or claim which has priority in a lower position behind another debt, particularly a new loan. A property owner with a loan secured by the property who applies for a second mortgage to make additions or repairs usually must get a subordination of the original loan so the new loan has first priority. A declaration of homestead must always be subordinated to a loan.
A Cambridge Massachusetts lease subordination agreement is a legally binding contract that modifies the priority of lease rights and obligations between a landlord, tenant, and a third-party lender. This agreement is commonly used in commercial real estate transactions where a tenant is seeking financing using the leased property as collateral. It allows the lender to take priority over the tenant's lease, should the tenant default on their loan, while ensuring the existing lease remains intact. The Cambridge Massachusetts lease subordination agreement serves to protect the lender's interests, as it establishes their priority in claiming possession or sale proceeds of the property in case of default. The agreement ensures that the lender's lien is superior to the rights of the tenant, therefore reducing their risk in providing financial assistance. There are two main types of Cambridge Massachusetts lease subordination agreements: 1. General Lease Subordination Agreement: This type applies to a standard lease where the tenant occupies the property primarily for business purposes. The agreement specifies the terms and conditions of subordination, including the lender's rights, payment priority, and default resolutions. 2. Estoppel Certificate: This agreement is commonly used in lease subordination scenarios where the property is already subject to an existing mortgage that the lender wants to subordinate. The estoppel certificate is a declaration from the tenant confirming the terms and conditions of the lease, such as rental amounts, lease term, and any existing defaults or breaches. In summary, a Cambridge Massachusetts lease subordination agreement is a vital document in commercial real estate transactions, protecting the interests of lenders while maintaining the tenant's lease rights. Tenants should carefully review and understand the terms of the agreement before signing, as it may impact their rights and obligations in the event of default.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
