Travis Texas Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan

• Category: Loans and Lending
• State: Multi-State
• County: Travis
• 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. Travis Texas Subordination, Non-Disturbance, and Attornment Agreement of a Lease (SODA Agreement) is a crucial legal document that defines the relationship between the lender, borrower, and tenant in a commercial loan scenario. It ensures the stability and protection of the tenant's lease rights in case of property foreclosure or change in ownership. In Travis County, Texas, the SODA Agreement operates as a Tri-City contract involving the landlord (as borrower), the tenant, and the lender. It outlines the terms and conditions that govern the rights and obligations of each party involved. Some important components of the SODA Agreement include subordination, non-disturbance, and attornment clauses. 1. Subordination Clause: The subordination clause stipulates that the tenant's leasehold interest is subordinate or lower in priority to the interest of the lender. In other words, if the landlord defaults on the commercial loan, the lender's rights to the property take precedence over the tenant's lease. Subordination ensures that the lender can foreclose on the property without terminating the tenant's lease. 2. Non-Disturbance Clause: The non-disturbance clause serves to protect the tenant from any disruption caused by the landlord's default or foreclosure proceedings. It ensures that as long as the tenant fulfills its lease obligations, the lender will not terminate the lease or disturb the tenant's right to use and occupy the premises, even if the property ownership changes hands. 3. Attornment Clause: The attornment clause establishes the tenant's agreement to recognize and accept a new landlord or lender, typically following a foreclosure or change in ownership. This clause obligates the tenant to attorn to the new landlord or lender and continue paying rent and fulfilling lease terms and conditions. The SODA Agreement is a necessary protective measure for tenants in commercial lease agreements. It assures tenants that their leasehold interests remain intact and protected even in situations where the landlord encounters financial difficulties or fails to meet loan obligations. While there are no different types of SODA Agreements specific to Travis County, Texas, the agreement's provisions and language may vary based on the complexity of the lease terms and individual requirements of lenders. It is essential for all parties involved to carefully negotiate and draft the Travis Texas SODA Agreement to safeguard their respective interests in a commercial loan transaction.

Travis Texas Subordination, Non-Disturbance, and Attornment Agreement of a Lease (SODA Agreement) is a crucial legal document that defines the relationship between the lender, borrower, and tenant in a commercial loan scenario. It ensures the stability and protection of the tenant's lease rights in case of property foreclosure or change in ownership. In Travis County, Texas, the SODA Agreement operates as a Tri-City contract involving the landlord (as borrower), the tenant, and the lender. It outlines the terms and conditions that govern the rights and obligations of each party involved. Some important components of the SODA Agreement include subordination, non-disturbance, and attornment clauses. 1. Subordination Clause: The subordination clause stipulates that the tenant's leasehold interest is subordinate or lower in priority to the interest of the lender. In other words, if the landlord defaults on the commercial loan, the lender's rights to the property take precedence over the tenant's lease. Subordination ensures that the lender can foreclose on the property without terminating the tenant's lease. 2. Non-Disturbance Clause: The non-disturbance clause serves to protect the tenant from any disruption caused by the landlord's default or foreclosure proceedings. It ensures that as long as the tenant fulfills its lease obligations, the lender will not terminate the lease or disturb the tenant's right to use and occupy the premises, even if the property ownership changes hands. 3. Attornment Clause: The attornment clause establishes the tenant's agreement to recognize and accept a new landlord or lender, typically following a foreclosure or change in ownership. This clause obligates the tenant to attorn to the new landlord or lender and continue paying rent and fulfilling lease terms and conditions. The SODA Agreement is a necessary protective measure for tenants in commercial lease agreements. It assures tenants that their leasehold interests remain intact and protected even in situations where the landlord encounters financial difficulties or fails to meet loan obligations. While there are no different types of SODA Agreements specific to Travis County, Texas, the agreement's provisions and language may vary based on the complexity of the lease terms and individual requirements of lenders. It is essential for all parties involved to carefully negotiate and draft the Travis Texas SODA Agreement to safeguard their respective interests in a commercial loan transaction.