Chicago Illinois Subordination Nondisturbance and Attornment Agreement

• Category: Landlord Tenant - Subordination
• State: Multi-State
• City: Chicago
• Control #: US-0734-WG
• Format: Word; Rich Text

Description

Subordination Nondisturbance and Attornment Agreement A Chicago Illinois Subordination Nondisturbance and Attornment Agreement, often referred to as SN DAA, is a legal document that sets out the rights and obligations of three parties: the tenant, the landlord, and the lender. This agreement is typically entered into in the context of commercial real estate leases when there is a mortgage on the property. In simple terms, the purpose of a Chicago Illinois SN DAA is to establish the priority of the lender's mortgage lien over the tenant's leasehold interest in the property. It provides a framework to protect the interests of all parties involved, ensuring that the lender's rights are not disturbed if there is a default by the landlord. The agreement contains several key provisions: 1. Subordination: The tenant agrees that its leasehold interest is subordinate to the lender's mortgage lien. This means that if the property is foreclosed upon, the leasehold interest of the tenant will be subject to the mortgage, and the lender can step into the shoes of the landlord. 2. Nondisturbance: The lender agrees that, as long as the tenant is not in default, it will not disturb the tenant's possession and use of the leased premises. This provides the tenant with some assurance that its lease will remain valid and binding, even in the event of foreclosure. 3. Attornment: The tenant agrees to recognize and attorn to the lender or any entity that acquires the property through foreclosure. This means the tenant will recognize the new owner as the landlord and continue to fulfill its lease obligations. It's important to note that there are different types of SN DAA agreements in Chicago, Illinois, depending on the specific circumstances and parties involved. Some common variations include: 1. Tenant-Focused SN DAA: This type of agreement primarily focuses on protecting the tenant's rights, providing additional assurances that the tenant's leasehold interest will not be affected by a foreclosure. 2. Lender-Focused SN DAA: This agreement places greater emphasis on protecting the lender's interests and provides the lender with more control over the lease in the event of default or foreclosure. 3. Landlord-Focused SN DAA: This type of agreement is designed to safeguard the landlord's position and ensure that the lender's actions do not disrupt the landlord-tenant relationship. In summary, a Chicago Illinois Subordination Nondisturbance and Attornment Agreement is a crucial legal document that clarifies the relationship between tenants, landlords, and lenders in the context of commercial real estate. It establishes the priority of the mortgage lien, protects the tenant's rights, and ensures business continuity in the event of foreclosure. Understanding the different types of SN DAA agreements available allows parties to negotiate terms that align with their specific needs and priorities.

A Chicago Illinois Subordination Nondisturbance and Attornment Agreement, often referred to as SN DAA, is a legal document that sets out the rights and obligations of three parties: the tenant, the landlord, and the lender. This agreement is typically entered into in the context of commercial real estate leases when there is a mortgage on the property. In simple terms, the purpose of a Chicago Illinois SN DAA is to establish the priority of the lender's mortgage lien over the tenant's leasehold interest in the property. It provides a framework to protect the interests of all parties involved, ensuring that the lender's rights are not disturbed if there is a default by the landlord. The agreement contains several key provisions: 1. Subordination: The tenant agrees that its leasehold interest is subordinate to the lender's mortgage lien. This means that if the property is foreclosed upon, the leasehold interest of the tenant will be subject to the mortgage, and the lender can step into the shoes of the landlord. 2. Nondisturbance: The lender agrees that, as long as the tenant is not in default, it will not disturb the tenant's possession and use of the leased premises. This provides the tenant with some assurance that its lease will remain valid and binding, even in the event of foreclosure. 3. Attornment: The tenant agrees to recognize and attorn to the lender or any entity that acquires the property through foreclosure. This means the tenant will recognize the new owner as the landlord and continue to fulfill its lease obligations. It's important to note that there are different types of SN DAA agreements in Chicago, Illinois, depending on the specific circumstances and parties involved. Some common variations include: 1. Tenant-Focused SN DAA: This type of agreement primarily focuses on protecting the tenant's rights, providing additional assurances that the tenant's leasehold interest will not be affected by a foreclosure. 2. Lender-Focused SN DAA: This agreement places greater emphasis on protecting the lender's interests and provides the lender with more control over the lease in the event of default or foreclosure. 3. Landlord-Focused SN DAA: This type of agreement is designed to safeguard the landlord's position and ensure that the lender's actions do not disrupt the landlord-tenant relationship. In summary, a Chicago Illinois Subordination Nondisturbance and Attornment Agreement is a crucial legal document that clarifies the relationship between tenants, landlords, and lenders in the context of commercial real estate. It establishes the priority of the mortgage lien, protects the tenant's rights, and ensures business continuity in the event of foreclosure. Understanding the different types of SN DAA agreements available allows parties to negotiate terms that align with their specific needs and priorities.