Subordination means an agreement to put a debt or claim which has priority in a lower position behind another debt, particularly a new loan. A property owner with a loan secured by the property who applies for a second mortgage to make additions or repairs usually must get a subordination of the original loan so the new loan has first priority. A declaration of homestead must always be subordinated to a loan.
A Gresham Oregon Lease Subordination Agreement is a legal document that outlines the relationship between a landlord, a tenant, and a lender in the context of a commercial lease. This agreement is used when a tenant wants to obtain financing and must provide assurance to the lender that their lease will be subordinate to the lender's lien or security interest. In simpler terms, this agreement establishes the priority of rights between the landlord and the lender. It ensures that the lender's interests are protected in case the tenant defaults on their loan and allows the lender to step in and take over the lease. There are various types of Gresham Oregon Lease Subordination Agreements, including: 1. Absolute Subordination: This type of agreement grants the lender complete priority over the lease. In the event of default by the tenant, the lender has the right to terminate the lease and assume control of the property. 2. Non-Disturbance: This agreement offers additional protection to the tenant by ensuring that if the lender assumes the property, they will honor the terms of the lease, allowing the tenant to continue their occupancy despite the change in ownership. 3. Attornment: This provision binds the tenant to recognize and attorn to the new owner of the property in the event of foreclosure or transfer of ownership. It ensures a smooth transition of rights and responsibilities between the original landlord and the lender. 4. Partial Subordination: In this type of agreement, only a portion of the tenant's lease is subordinated to the lender's interest. This could be limited to a specific floor or section of the leased premises. 5. Limited Subordination: This agreement subordinates the lease for a specified period or until certain conditions are met. It provides flexibility for the lender and reassurance for the tenant, as the lease will regain its priority once the specified timeframe or conditions are fulfilled. Gresham Oregon Lease Subordination Agreements are crucial documents that protect the interests of lenders and tenants in commercial lease transactions. They ensure a clear understanding of the priority of rights and help maintain stability and continuity in the event of default or ownership transfer.
