Bexar Texas Subordination of Mortgage and Attornment Agreement

State:
Multi-State
County:
Bexar
Control #:
US-OL20072
Format:
Word; 
PDF
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Description

This office lease form is an agreement entered into in connection with a certain loan which the lender has made to the landlord and secured, in part, by a mortgage, assignment of the leases and rents and security agreement on the premises. This form describes the issues of mortgage subordination and a tenants agreement to hold the land as the tenant of a new landlord.

Bexar Texas Subordination of Mortgage and Attornment Agreement is a legal document that outlines the relationship between a lender, borrower, and a third party in the context of a mortgage. It is specifically relevant in Bexar County, Texas, where it serves to protect the interests of lenders and the rights of tenants when there is a change in the property's ownership or the borrower refinances their mortgage. Keywords: Bexar Texas, subordination, mortgage, attornment agreement, lender, borrower, third party, property ownership, refinancing, tenants. Two common types of Bexar Texas Subordination of Mortgage and Attornment Agreements are the: 1. Commercial Mortgage Subordination and Attornment Agreement: This type of agreement is used primarily in commercial real estate transactions. It allows a new lender to issue a loan that takes priority over an existing mortgage, while ensuring the tenant's lease survives any change in ownership. It protects the tenant's rights, such as the right to occupy the premises, even if there is a foreclosure or transfer of ownership. 2. Residential Mortgage Subordination and Attornment Agreement: In the residential real estate context, this agreement is crucial when the homeowner seeks to refinance their mortgage. By signing this agreement, the lender holding the original mortgage agrees to subordinate their lien to the refinancing lender's lien. This means that if the homeowner defaults on their refinanced loan, the new lender will have priority in recovering their debt. It also ensures that any existing tenants on the property are protected and will not face eviction due to the refinancing process. Overall, the Bexar Texas Subordination of Mortgage and Attornment Agreement provides clarity and protection for all parties involved in a mortgage transaction within Bexar County, Texas. It balances the interests of lenders, borrowers, and tenants, ensuring the smooth transfer of property ownership and preserving the tenant's rights in case of any changes or refinancing.

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FAQ

A nondisturbance clause is a provision in a mortgage contract that ensures that a rental agreement between the tenant and the landlord will continue under any circumstances. This is done primarily to protect the renter from eviction by the mortgagor if the property is foreclosed upon by the lender.

The subordination clause gives the third-party lender the option to terminate the lease in the event of commercial foreclosure. A non-disturbance clause or agreement provides the tenant the right to continue occupying the leased premises as long as they do not default.

An attornment occurs when the title to an immovable property is transferred from the hands of one lessor to another. In such cases, the existing lessor will usually send a letter of attornment to the lessee notifying him of such sale and request him to make all further lease payments directly to the new lessor.

Why is an SNDA important? In the absence of an SNDA or similar document, the lender and tenant do not have privity of contract (or a written contractual relationship). Landlord and lender establish privity through the loan documents, and landlord and tenant establish privity through the lease document.

Overview. An SNDA is a tri-party agreement between a tenant, landlord, and landlord's mortgagee under which the tenant agrees to subordinate its lease to the mortgagee's lien in exchange for the mortgagee's agreement to honor the terms of the lease if mortgagee forecloses on the property.

The attornment clause in an SNDA obligates the tenant to recognize the new owner of the property as its landlord regardless of whether the new owner acquired the property through a normal sale or a foreclosure.

A lender typically wants to have an SNDA because of its subordination clause if, in the absence of such an agreement, the lease would be prior to the mortgage.

A subordination, non-disturbance, and attornment agreement (SNDA) is a three-party agreement among: A lender who has (or is about to take) a security interest in real property that is being: encumbered by a mortgage, deed of trust, or other security instrument; and. affected by one or more commercial leases.

What is Attornment? The "attornment" part of the agreement, which perhaps is the most confusing part of an SNDA, simply means that the tenant is agreeing to acknowledge the purchaser at the foreclosure sale as the new landlord under the lease.

Definition of 'Subordination of Lease' Subordination of lease refers to the tenant's consent to subordinate his or her rights over a property to the rights of the bank holding the mortgage on the property. A subordination of lease agreement is created for this purpose.

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Bexar Texas Subordination of Mortgage and Attornment Agreement