Document background
The Subordination and Non-Disturbance Agreement (SNDA) is essential in Swiss commercial real estate financing where multiple creditors and tenants are involved. It is typically used when a property has both senior and junior financing, and there are important tenants whose continued occupation rights need to be protected. The document ensures that junior creditors' claims are subordinated to senior creditors' rights, while simultaneously providing assurance to tenants that their lease rights will be preserved even if the senior creditor forecloses on the property. Under Swiss law, these agreements must carefully balance the rights of all parties while complying with Swiss property law, the Swiss Code of Obligations, and debt enforcement regulations. The agreement typically includes detailed provisions about the order of priority among creditors, the conditions for maintaining the lease, and the procedures for enforcement actions.
