Illinois Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan

• Category: Loans and Lending
• State: Multi-State
• Control #: US-1176BG
• Format: Word; Rich Text

Description

The main purpose of this document is to subordinate the lease to the deed of trust or mortgage (if applicable), and have the tenant agree to be bound by the lease to a new owner in the event of foreclosure. Illinois Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a legal document that governs the relationship between a commercial property tenant, a landlord, and a lender in the context of a commercial loan. This agreement ensures that in the event of default or foreclosure on the commercial loan, the rights and interests of the tenant are protected. In Illinois, there are primarily two types of Subordination, Non-Disturbance, and Attornment Agreements regarding Commercial Loans: 1. Subordination and Non-Disturbance Agreement (SODA): This type of agreement establishes the priority of interests between the lender and tenant regarding the leased commercial property. It generally includes provisions that subordinate the tenant's rights to the lender's mortgage or deed of trust on the property. This means that if the tenant defaults on the lease, the lender has the right to terminate the lease and evict the tenant. However, the tenant's rights are protected by the non-disturbance provision, which ensures that as long as the tenant is not in default, the lender will not disturb their rights to occupy the premises. 2. Subordination, Non-Disturbance, and Attornment Agreement (SODA): This agreement adds a provision, known as Attornment, to the SODA. Attornment refers to the tenant's acknowledgment and consent to recognize a new owner or lender if the property is sold or transferred. This provision makes the tenant legally obligated to continue paying rent to the new owner or lender, even if there is a change in ownership or in the event of a foreclosure. In Illinois, it is important for tenants to carefully review and negotiate the terms of an SODA before signing a commercial lease. Key considerations include the tenant's rights in case of default by the landlord, the lender's rights in the event of foreclosure, the process for obtaining estoppel certificates, rent payment obligations, and notice requirements. In summary, an Illinois Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a crucial document that protects the interests of both tenant and lender in a commercial property lease. It establishes the priority of interests, ensures the tenant's rights are not disturbed as long as they fulfill their obligations, and obligates the tenant to recognize and continue making rent payments to new owners or lenders if there is a change in property ownership. Close attention to the terms of the SODA is essential for all parties involved to mitigate potential risks and disputes.

Illinois Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a legal document that governs the relationship between a commercial property tenant, a landlord, and a lender in the context of a commercial loan. This agreement ensures that in the event of default or foreclosure on the commercial loan, the rights and interests of the tenant are protected. In Illinois, there are primarily two types of Subordination, Non-Disturbance, and Attornment Agreements regarding Commercial Loans: 1. Subordination and Non-Disturbance Agreement (SODA): This type of agreement establishes the priority of interests between the lender and tenant regarding the leased commercial property. It generally includes provisions that subordinate the tenant's rights to the lender's mortgage or deed of trust on the property. This means that if the tenant defaults on the lease, the lender has the right to terminate the lease and evict the tenant. However, the tenant's rights are protected by the non-disturbance provision, which ensures that as long as the tenant is not in default, the lender will not disturb their rights to occupy the premises. 2. Subordination, Non-Disturbance, and Attornment Agreement (SODA): This agreement adds a provision, known as Attornment, to the SODA. Attornment refers to the tenant's acknowledgment and consent to recognize a new owner or lender if the property is sold or transferred. This provision makes the tenant legally obligated to continue paying rent to the new owner or lender, even if there is a change in ownership or in the event of a foreclosure. In Illinois, it is important for tenants to carefully review and negotiate the terms of an SODA before signing a commercial lease. Key considerations include the tenant's rights in case of default by the landlord, the lender's rights in the event of foreclosure, the process for obtaining estoppel certificates, rent payment obligations, and notice requirements. In summary, an Illinois Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a crucial document that protects the interests of both tenant and lender in a commercial property lease. It establishes the priority of interests, ensures the tenant's rights are not disturbed as long as they fulfill their obligations, and obligates the tenant to recognize and continue making rent payments to new owners or lenders if there is a change in property ownership. Close attention to the terms of the SODA is essential for all parties involved to mitigate potential risks and disputes.