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.
New Hampshire Subordination, Non-Disturbance, and Attornment Agreement (SODA) is an important document that governs the relationship between a tenant, landlord, and lender in the context of a commercial loan. It offers protection to all parties involved by clarifying their rights, responsibilities, and obligations in the event of default or foreclosure. This legally binding agreement ensures that the lender's interests are adequately secured while providing the tenant with certain protections to carry on their business operations smoothly. In New Hampshire, there are generally two types of SODA agreements related to a commercial loan: the Subordination, Non-Disturbance, and Attornment Agreement and the Subordination, Non-Disturbance, and Estoppel Agreement. Each type serves a specific purpose and offers unique benefits: 1. Subordination, Non-Disturbance, and Attornment Agreement (SODA): This agreement outlines the respective rights and priorities of the lender and the tenant in the event of foreclosure or default. It typically states that the tenant's leasehold interest is subordinate to the lender's interest, meaning that the lender has first priority in recovering their outstanding loan amount through the sale or lease of the property. The SODA also provides non-disturbance provisions, ensuring that the tenant's right to possession and quiet enjoyment of the premises will be protected even if the property is foreclosed upon. 2. Subordination, Non-Disturbance, and Estoppel Agreement (SIDE): This agreement is similar to SODA but also includes an estoppel provision. It requires the tenant to provide a statement certifying certain facts about the lease, such as its current status, rental payments, and any defaults or breaches. The certificate or estoppel acts as a legally binding representation by the tenant to the lender regarding the terms and conditions of their lease. The SIDE agreement provides the lender with additional assurance that the tenant has no claims or defenses against the landlord, ensuring a smooth transition of ownership or management in case of foreclosure. Both types of agreements are crucial components of a commercial loan transaction in New Hampshire. They protect the lender's financial interests, allowing them to mitigate risks and recover their investment. Simultaneously, they safeguard the tenant's rights and ensure business continuity, providing peace of mind that their leasehold interest will not be disregarded in the event of foreclosure. When drafting or reviewing a New Hampshire Subordination, Non-Disturbance, and Attornment Agreement, it is advisable to consult with experienced legal professionals who possess knowledge of state-specific laws and regulations. They can help ensure that the SODA aligns with the requirements and best practices of New Hampshire commercial property leasing, fostering a transparent and secure business environment for all parties involved.
New Hampshire Subordination, Non-Disturbance, and Attornment Agreement (SODA) is an important document that governs the relationship between a tenant, landlord, and lender in the context of a commercial loan. It offers protection to all parties involved by clarifying their rights, responsibilities, and obligations in the event of default or foreclosure. This legally binding agreement ensures that the lender's interests are adequately secured while providing the tenant with certain protections to carry on their business operations smoothly. In New Hampshire, there are generally two types of SODA agreements related to a commercial loan: the Subordination, Non-Disturbance, and Attornment Agreement and the Subordination, Non-Disturbance, and Estoppel Agreement. Each type serves a specific purpose and offers unique benefits: 1. Subordination, Non-Disturbance, and Attornment Agreement (SODA): This agreement outlines the respective rights and priorities of the lender and the tenant in the event of foreclosure or default. It typically states that the tenant's leasehold interest is subordinate to the lender's interest, meaning that the lender has first priority in recovering their outstanding loan amount through the sale or lease of the property. The SODA also provides non-disturbance provisions, ensuring that the tenant's right to possession and quiet enjoyment of the premises will be protected even if the property is foreclosed upon. 2. Subordination, Non-Disturbance, and Estoppel Agreement (SIDE): This agreement is similar to SODA but also includes an estoppel provision. It requires the tenant to provide a statement certifying certain facts about the lease, such as its current status, rental payments, and any defaults or breaches. The certificate or estoppel acts as a legally binding representation by the tenant to the lender regarding the terms and conditions of their lease. The SIDE agreement provides the lender with additional assurance that the tenant has no claims or defenses against the landlord, ensuring a smooth transition of ownership or management in case of foreclosure. Both types of agreements are crucial components of a commercial loan transaction in New Hampshire. They protect the lender's financial interests, allowing them to mitigate risks and recover their investment. Simultaneously, they safeguard the tenant's rights and ensure business continuity, providing peace of mind that their leasehold interest will not be disregarded in the event of foreclosure. When drafting or reviewing a New Hampshire Subordination, Non-Disturbance, and Attornment Agreement, it is advisable to consult with experienced legal professionals who possess knowledge of state-specific laws and regulations. They can help ensure that the SODA aligns with the requirements and best practices of New Hampshire commercial property leasing, fostering a transparent and secure business environment for all parties involved.