Minnesota 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. A Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a legal document commonly used in commercial real estate transactions involving lease agreements and commercial loans. This agreement outlines the rights and obligations of tenants, landlords, and lenders, ensuring a smooth relationship between all parties involved, even if a default or foreclosure occurs. In Minnesota, SODA is structured to protect the interests of lenders, tenants, and landlords by clearly defining their rights and obligations. Here are key points to include in a detailed description of Minnesota Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan: 1. Definition: A Minnesota Subordination, Non-Disturbance, and Attornment Agreement (MIRANDA) is a legally binding contract involving a lease agreement, the landlord (Lessor), tenant (Lessee), and the lender providing a commercial loan (Lender). 2. Subordination: The subordination clause in MIRANDA establishes that the lease agreement will be subordinate to the commercial loan. This means that the lender's rights and security interest take priority over the lease agreement. In the event of a foreclosure or default, the lender can proceed with the commercial loan without interference from the tenant. 3. Non-Disturbance: The non-disturbance clause ensures that if the lender forecloses on the property due to the landlord's default under the commercial loan, the tenant's rights to occupancy will be protected. The tenant should not face eviction or major disruptions to their business operations as long as they comply with the terms of the lease agreement. 4. Attornment: The attornment clause mandates that the tenant recognizes and agrees to recognize the lender as their new landlord if the property is foreclosed upon. This clause ensures that the tenant's lease obligations carry over to the new landlord or lender. Different types of Minnesota Subordination, Non-Disturbance, and Attornment Agreements can be tailored to specific situations or property types. Some possible variations include: a) Multi tenant SODA: When a commercial property has multiple tenants, each tenant's lease agreement can be subject to an MIRANDA. This allows for individual negotiations between the lender and each tenant, granting specific rights and protections. b) Single-Tenant SODA: In cases where a commercial property is occupied by a single tenant, the MIRANDA may be simplified, as there are no concerns about coordinating multiple tenant-related obligations. c) Ground Lease SODA: If the property is subject to a ground lease, where the land is leased to a tenant separate from the building tenant, an MIRANDA can be used to define the relationship between the lender, ground lessor, and building tenant. In summary, a Minnesota Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan is a crucial legal document that protects the rights and obligations of tenants, landlords, and lenders in a commercial real estate transaction. It ensures smooth operations and continuity of lease agreements even during defaults or foreclosures.

A Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a legal document commonly used in commercial real estate transactions involving lease agreements and commercial loans. This agreement outlines the rights and obligations of tenants, landlords, and lenders, ensuring a smooth relationship between all parties involved, even if a default or foreclosure occurs. In Minnesota, SODA is structured to protect the interests of lenders, tenants, and landlords by clearly defining their rights and obligations. Here are key points to include in a detailed description of Minnesota Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan: 1. Definition: A Minnesota Subordination, Non-Disturbance, and Attornment Agreement (MIRANDA) is a legally binding contract involving a lease agreement, the landlord (Lessor), tenant (Lessee), and the lender providing a commercial loan (Lender). 2. Subordination: The subordination clause in MIRANDA establishes that the lease agreement will be subordinate to the commercial loan. This means that the lender's rights and security interest take priority over the lease agreement. In the event of a foreclosure or default, the lender can proceed with the commercial loan without interference from the tenant. 3. Non-Disturbance: The non-disturbance clause ensures that if the lender forecloses on the property due to the landlord's default under the commercial loan, the tenant's rights to occupancy will be protected. The tenant should not face eviction or major disruptions to their business operations as long as they comply with the terms of the lease agreement. 4. Attornment: The attornment clause mandates that the tenant recognizes and agrees to recognize the lender as their new landlord if the property is foreclosed upon. This clause ensures that the tenant's lease obligations carry over to the new landlord or lender. Different types of Minnesota Subordination, Non-Disturbance, and Attornment Agreements can be tailored to specific situations or property types. Some possible variations include: a) Multi tenant SODA: When a commercial property has multiple tenants, each tenant's lease agreement can be subject to an MIRANDA. This allows for individual negotiations between the lender and each tenant, granting specific rights and protections. b) Single-Tenant SODA: In cases where a commercial property is occupied by a single tenant, the MIRANDA may be simplified, as there are no concerns about coordinating multiple tenant-related obligations. c) Ground Lease SODA: If the property is subject to a ground lease, where the land is leased to a tenant separate from the building tenant, an MIRANDA can be used to define the relationship between the lender, ground lessor, and building tenant. In summary, a Minnesota Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan is a crucial legal document that protects the rights and obligations of tenants, landlords, and lenders in a commercial real estate transaction. It ensures smooth operations and continuity of lease agreements even during defaults or foreclosures.