Virginia 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 Virginia Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a legal document that outlines the relationship between the landlord, the tenant, and the lender in the context of a commercial loan. This agreement is primarily used in the commercial real estate industry to protect the rights and interests of all parties involved. The Subordination aspect of the agreement refers to the tenant agreeing to subordinate their lease to the lender's lien or mortgage on the property. In simpler terms, it means that the lender's interest in the property takes priority over the tenant's lease rights. By signing the SODA, the tenant acknowledges that in the event of a default or foreclosure, the lender has the authority to terminate the lease and take possession of the property. Non-Disturbance is another crucial component of the SODA. It ensures that in the event of a foreclosure or transfer of the property's ownership, the tenant's rights and leasehold interest will be protected. The tenant will not be disturbed or evicted as long as they abide by the terms and conditions of the lease. Essentially, the non-disturbance clause provides security to the tenant against any potential disruptions resulting from actions taken by the lender or new property owner. Lastly, the Attornment clause in the SODA establishes the tenant's obligation to recognize a new landlord or lender that may come into possession of the property through foreclosure or transfer. The tenant agrees to "attorn" to the new landlord or lender, meaning they will accept them as the new landlord and continue to fulfill their lease obligations under the new ownership. In Virginia, there are different types of Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan, which include: 1. Full Subordination: In this type of agreement, the tenant fully subordinates their lease to the lender's lien, meaning the lender's interest takes priority over all lease rights. 2. Limited Subordination: This agreement allows the tenant to maintain certain lease rights that may survive the lender's foreclosure or default. This could include the right to receive notice or an opportunity to cure any defaults before termination. 3. Estoppel Certificate: While not technically a separate type, an Estoppel Certificate is often included as part of the SODA. It is a document signed by the tenant certifying certain facts about their lease, such as the lease term, payment amounts, and any defaults to the lender or potential buyers of the property. In summary, a Virginia Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan is a crucial legal document that protects the interests of the landlord, tenant, and lender in a commercial real estate transaction. By understanding the different types and provisions of the SODA, the parties involved can ensure their respective rights are safeguarded in case of default, foreclosure, or transfers of property ownership.

A Virginia Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a legal document that outlines the relationship between the landlord, the tenant, and the lender in the context of a commercial loan. This agreement is primarily used in the commercial real estate industry to protect the rights and interests of all parties involved. The Subordination aspect of the agreement refers to the tenant agreeing to subordinate their lease to the lender's lien or mortgage on the property. In simpler terms, it means that the lender's interest in the property takes priority over the tenant's lease rights. By signing the SODA, the tenant acknowledges that in the event of a default or foreclosure, the lender has the authority to terminate the lease and take possession of the property. Non-Disturbance is another crucial component of the SODA. It ensures that in the event of a foreclosure or transfer of the property's ownership, the tenant's rights and leasehold interest will be protected. The tenant will not be disturbed or evicted as long as they abide by the terms and conditions of the lease. Essentially, the non-disturbance clause provides security to the tenant against any potential disruptions resulting from actions taken by the lender or new property owner. Lastly, the Attornment clause in the SODA establishes the tenant's obligation to recognize a new landlord or lender that may come into possession of the property through foreclosure or transfer. The tenant agrees to "attorn" to the new landlord or lender, meaning they will accept them as the new landlord and continue to fulfill their lease obligations under the new ownership. In Virginia, there are different types of Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan, which include: 1. Full Subordination: In this type of agreement, the tenant fully subordinates their lease to the lender's lien, meaning the lender's interest takes priority over all lease rights. 2. Limited Subordination: This agreement allows the tenant to maintain certain lease rights that may survive the lender's foreclosure or default. This could include the right to receive notice or an opportunity to cure any defaults before termination. 3. Estoppel Certificate: While not technically a separate type, an Estoppel Certificate is often included as part of the SODA. It is a document signed by the tenant certifying certain facts about their lease, such as the lease term, payment amounts, and any defaults to the lender or potential buyers of the property. In summary, a Virginia Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan is a crucial legal document that protects the interests of the landlord, tenant, and lender in a commercial real estate transaction. By understanding the different types and provisions of the SODA, the parties involved can ensure their respective rights are safeguarded in case of default, foreclosure, or transfers of property ownership.