Massachusetts 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. Massachusetts Subordination, Non-Disturbance, and Attornment Agreement of a Lease: A Massachusetts Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a crucial legal document that governs the rights and obligations of commercial tenants, landlords, and lenders in the context of a commercial loan. It aims to protect the parties involved by addressing the subordination of leasehold interests, non-disturbance of tenants in case of mortgage default, and attornment to a new landlord. In Massachusetts, there are primarily two main types of SODA agreements: the Tenant SODA and the Landlord SODA. Each plays a distinct role in securing the interests of tenants and landlords in commercial lease arrangements. 1. Tenant SODA: The Tenant SODA is typically entered into between a tenant (lessee) and the lender of the landlord (lessor) who has mortgaged their property. It primarily seeks to safeguard the tenant's rights and ensure that the tenant's leasehold interests are protected if the landlord defaults on their mortgage payments or undergoes foreclosure. Keywords: Massachusetts Tenant SODA, tenant rights, leasehold interests, lender default, foreclosure, tenant protection, mortgage payments. 2. Landlord SODA: The Landlord SODA is predominantly executed between the landlord (lessor) and the lender (usually a mortgagee). Its purpose is to secure the landlord's interests by ensuring that, in the event of a mortgage default, the tenant consents to attorn the tenancy to the new lender or foreclosure purchaser, thereby continuing the lease under the new ownership. Keywords: Massachusetts Landlord SODA, landlord interests, mortgage default, attornment, tenancy, new lender, foreclosure purchaser. In both types of SODA agreements, certain key provisions are commonly included: a) Subordination: This provision establishes that the tenant's leasehold rights are subordinate to the rights of the lender or the mortgagee. It implies that the lender's interests take precedence over the tenant's rights in case of default or foreclosure. b) Non-Disturbance: This clause ensures that, in the event of foreclosure or change of ownership, the tenant will not be disturbed or evicted as long as they comply with the terms of the lease agreement. The new landlord or lender will respect the existing lease and continue the tenancy. c) Attornment: This provision requires the tenant to formally recognize and accept the new landlord or lender as the lawful successor in interest and continue the lease under their ownership. Attornment ensures the uninterrupted tenancy of the tenant even if there is a change in ownership due to default or foreclosure. d) Notice provisions: SODA agreements typically include provisions detailing the process and notice requirements for the tenant, lender, and landlord, allowing for effective communication and coordination between all parties involved. It is essential for both tenants and landlords in Massachusetts involved in commercial lease agreements to familiarize themselves with the intricacies and legal consequences of a Massachusetts Subordination, Non-Disturbance, and Attornment Agreement. Seeking professional legal advice before entering into such agreements is highly recommended ensuring the protection of their respective interests.

Massachusetts Subordination, Non-Disturbance, and Attornment Agreement of a Lease: A Massachusetts Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a crucial legal document that governs the rights and obligations of commercial tenants, landlords, and lenders in the context of a commercial loan. It aims to protect the parties involved by addressing the subordination of leasehold interests, non-disturbance of tenants in case of mortgage default, and attornment to a new landlord. In Massachusetts, there are primarily two main types of SODA agreements: the Tenant SODA and the Landlord SODA. Each plays a distinct role in securing the interests of tenants and landlords in commercial lease arrangements. 1. Tenant SODA: The Tenant SODA is typically entered into between a tenant (lessee) and the lender of the landlord (lessor) who has mortgaged their property. It primarily seeks to safeguard the tenant's rights and ensure that the tenant's leasehold interests are protected if the landlord defaults on their mortgage payments or undergoes foreclosure. Keywords: Massachusetts Tenant SODA, tenant rights, leasehold interests, lender default, foreclosure, tenant protection, mortgage payments. 2. Landlord SODA: The Landlord SODA is predominantly executed between the landlord (lessor) and the lender (usually a mortgagee). Its purpose is to secure the landlord's interests by ensuring that, in the event of a mortgage default, the tenant consents to attorn the tenancy to the new lender or foreclosure purchaser, thereby continuing the lease under the new ownership. Keywords: Massachusetts Landlord SODA, landlord interests, mortgage default, attornment, tenancy, new lender, foreclosure purchaser. In both types of SODA agreements, certain key provisions are commonly included: a) Subordination: This provision establishes that the tenant's leasehold rights are subordinate to the rights of the lender or the mortgagee. It implies that the lender's interests take precedence over the tenant's rights in case of default or foreclosure. b) Non-Disturbance: This clause ensures that, in the event of foreclosure or change of ownership, the tenant will not be disturbed or evicted as long as they comply with the terms of the lease agreement. The new landlord or lender will respect the existing lease and continue the tenancy. c) Attornment: This provision requires the tenant to formally recognize and accept the new landlord or lender as the lawful successor in interest and continue the lease under their ownership. Attornment ensures the uninterrupted tenancy of the tenant even if there is a change in ownership due to default or foreclosure. d) Notice provisions: SODA agreements typically include provisions detailing the process and notice requirements for the tenant, lender, and landlord, allowing for effective communication and coordination between all parties involved. It is essential for both tenants and landlords in Massachusetts involved in commercial lease agreements to familiarize themselves with the intricacies and legal consequences of a Massachusetts Subordination, Non-Disturbance, and Attornment Agreement. Seeking professional legal advice before entering into such agreements is highly recommended ensuring the protection of their respective interests.