Puerto Rico 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. Puerto Rico Subordination, Non-Disturbance, and Attornment Agreement of a Lease (SODA) is a legally binding agreement commonly used in commercial real estate transactions where a tenant occupies a property that is subject to a commercial loan or mortgage. This agreement outlines the relationship between the lender, borrower, and tenant, ensuring that each party's rights and interests are protected. The Subordination aspect of the SODA agreement refers to the tenant agreeing to subordinate their leasehold interest to the lender's mortgage or security interest. In simpler terms, it means that if the borrower defaults on the loan, the lender has the authority to foreclose on the property, which would naturally terminate the lease. However, by signing the subordination agreement, the tenant acknowledges that the lender's rights take precedence over their lease, allowing them to remain on the premises and accept the new landlord (the lender) if the property is foreclosed. The Non-Disturbance provision aims to protect the tenant from being evicted or disturbed by the lender's actions. It stipulates that as long as the tenant fulfills their lease obligations, they have the right to continue occupying the property, undisturbed by any foreclosure or other actions taken by the lender. Essentially, the non-disturbance provision ensures that the tenant's rights and lease terms remain valid even if a default occurs or the property changes ownership. Lastly, the Attornment clause establishes that in the event of a foreclosure or transfer of the property to a new owner (the lender), the tenant agrees to recognize and attorn to the new landlord as their landlord. This means that the tenant accepts the new owner as the successor landlord and agrees to abide by the terms of their lease. The attornment clause ensures that the tenant's obligations and rights are carried forward even if there is a change in ownership due to foreclosure or transfer. Different types of Puerto Rico Subordination, Non-Disturbance, and Attornment Agreements of a Lease regarding a Commercial Loan can vary depending on the specific arrangements between the parties involved. The content and language of the agreement may be adjusted to suit the requirements of the lender and tenant, while still maintaining the fundamental aspects of subordination, non-disturbance, and attornment. It is crucial for all parties to engage legal professionals knowledgeable in commercial real estate law to draft and review the agreement to ensure that it adequately protects their interests while complying with Puerto Rico's applicable laws and regulations surrounding lease agreements and commercial loans.

Puerto Rico Subordination, Non-Disturbance, and Attornment Agreement of a Lease (SODA) is a legally binding agreement commonly used in commercial real estate transactions where a tenant occupies a property that is subject to a commercial loan or mortgage. This agreement outlines the relationship between the lender, borrower, and tenant, ensuring that each party's rights and interests are protected. The Subordination aspect of the SODA agreement refers to the tenant agreeing to subordinate their leasehold interest to the lender's mortgage or security interest. In simpler terms, it means that if the borrower defaults on the loan, the lender has the authority to foreclose on the property, which would naturally terminate the lease. However, by signing the subordination agreement, the tenant acknowledges that the lender's rights take precedence over their lease, allowing them to remain on the premises and accept the new landlord (the lender) if the property is foreclosed. The Non-Disturbance provision aims to protect the tenant from being evicted or disturbed by the lender's actions. It stipulates that as long as the tenant fulfills their lease obligations, they have the right to continue occupying the property, undisturbed by any foreclosure or other actions taken by the lender. Essentially, the non-disturbance provision ensures that the tenant's rights and lease terms remain valid even if a default occurs or the property changes ownership. Lastly, the Attornment clause establishes that in the event of a foreclosure or transfer of the property to a new owner (the lender), the tenant agrees to recognize and attorn to the new landlord as their landlord. This means that the tenant accepts the new owner as the successor landlord and agrees to abide by the terms of their lease. The attornment clause ensures that the tenant's obligations and rights are carried forward even if there is a change in ownership due to foreclosure or transfer. Different types of Puerto Rico Subordination, Non-Disturbance, and Attornment Agreements of a Lease regarding a Commercial Loan can vary depending on the specific arrangements between the parties involved. The content and language of the agreement may be adjusted to suit the requirements of the lender and tenant, while still maintaining the fundamental aspects of subordination, non-disturbance, and attornment. It is crucial for all parties to engage legal professionals knowledgeable in commercial real estate law to draft and review the agreement to ensure that it adequately protects their interests while complying with Puerto Rico's applicable laws and regulations surrounding lease agreements and commercial loans.