Wake North Carolina Subordination, Non-Disturbance, and Attornment Agreement of a Lease regarding a Commercial Loan

• Category: Loans and Lending
• State: Multi-State
• County: Wake
• 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 Wake North Carolina Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a legal document typically used in commercial real estate transactions involving commercial loans. It outlines the rights and responsibilities of three key parties: the landlord (lessor), the tenant (lessee), and the lender. A subordination clause in the SODA specifies that the leasehold interest of the tenant will be subordinate to the lender's mortgage or lien on the property. This means that in case of default by the landlord, the lender's rights will take precedence over the tenant's lease rights. This clause benefits the lender by providing greater security for their loan. The non-disturbance clause ensures that, in the event of a foreclosure or other actions taken by the lender against the landlord, the tenant's rights under the lease will be recognized and protected. It assures the tenant that their lease agreement will remain in force, and they will not face eviction or disruption of their business operations due to actions taken by the lender. The attornment clause requires the tenant to formally recognize the lender as their new landlord in the event of a foreclosure or other transfer of ownership. This ensures that the tenant's obligations, such as rental payments, remain intact and transfers the tenant-landlord relationship to the new owner. Different subtypes of Wake North Carolina Subordination, Non-Disturbance, and Attornment Agreements may include: 1. Partial SODA: This type of SODA may only include the subordination clause and exclude the non-disturbance and attornment clauses. It is commonly used when the property is not encumbered by existing mortgage or lien. 2. Full SODA: In a full SODA, all three clauses — subordination, non-disturbance, and attornment — are included. This type is typically utilized when the property is subject to an existing loan or lien. 3. Non-Recourse SODA: This type of SODA restricts the lender from seeking personal liability from the tenant in the event of default by the landlord. It is often beneficial for tenants seeking an additional layer of protection from potential liability. Overall, a Wake North Carolina Subordination, Non-Disturbance, and Attornment Agreement of a Lease plays a crucial role in commercial real estate transactions involving commercial loans by protecting the rights and interests of both the tenant and the lender. It provides security and reassurance for tenants while ensuring that lenders have priority access to the property in case of default.

A Wake North Carolina Subordination, Non-Disturbance, and Attornment Agreement (SODA) is a legal document typically used in commercial real estate transactions involving commercial loans. It outlines the rights and responsibilities of three key parties: the landlord (lessor), the tenant (lessee), and the lender. A subordination clause in the SODA specifies that the leasehold interest of the tenant will be subordinate to the lender's mortgage or lien on the property. This means that in case of default by the landlord, the lender's rights will take precedence over the tenant's lease rights. This clause benefits the lender by providing greater security for their loan. The non-disturbance clause ensures that, in the event of a foreclosure or other actions taken by the lender against the landlord, the tenant's rights under the lease will be recognized and protected. It assures the tenant that their lease agreement will remain in force, and they will not face eviction or disruption of their business operations due to actions taken by the lender. The attornment clause requires the tenant to formally recognize the lender as their new landlord in the event of a foreclosure or other transfer of ownership. This ensures that the tenant's obligations, such as rental payments, remain intact and transfers the tenant-landlord relationship to the new owner. Different subtypes of Wake North Carolina Subordination, Non-Disturbance, and Attornment Agreements may include: 1. Partial SODA: This type of SODA may only include the subordination clause and exclude the non-disturbance and attornment clauses. It is commonly used when the property is not encumbered by existing mortgage or lien. 2. Full SODA: In a full SODA, all three clauses — subordination, non-disturbance, and attornment — are included. This type is typically utilized when the property is subject to an existing loan or lien. 3. Non-Recourse SODA: This type of SODA restricts the lender from seeking personal liability from the tenant in the event of default by the landlord. It is often beneficial for tenants seeking an additional layer of protection from potential liability. Overall, a Wake North Carolina Subordination, Non-Disturbance, and Attornment Agreement of a Lease plays a crucial role in commercial real estate transactions involving commercial loans by protecting the rights and interests of both the tenant and the lender. It provides security and reassurance for tenants while ensuring that lenders have priority access to the property in case of default.