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Landlord Lien Subordination Agreement

Landlord Lien Subordination Agreement Template for India

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Key Requirements PROMPT example:

Landlord Lien Subordination Agreement

"Need a Landlord Lien Subordination Agreement for our manufacturing facility in Mumbai, where we're seeking equipment financing of INR 5 crore from State Bank of India, and our landlord must subordinate their lien rights to the bank's security interest in our machinery, effective March 1, 2025."

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Document background
The Landlord Lien Subordination Agreement is essential in commercial leasing and financing transactions in India where a tenant requires both leased premises and asset-based financing. Under Indian property law, landlords typically possess statutory and contractual liens on tenant's property located within the leased premises as security for rent payment and other lease obligations. However, when tenants seek financing, lenders often require first-priority security interest in the tenant's assets. This document resolves this potential conflict by having the landlord agree to subordinate their lien rights to the lender's security interest, thereby facilitating the tenant's ability to obtain financing while maintaining their lease. The agreement must comply with Indian contract law, property law, and relevant state-specific regulations governing commercial leases and security interests.
Suggested Sections

1. Parties: Identification of all parties to the agreement including the landlord, tenant, and lender(s)

2. Background: Recitals explaining the lease arrangement, existing liens, and the need for subordination

3. Definitions: Definitions of key terms used throughout the agreement including Property, Lease, Landlord's Lien, Security Interest, etc.

4. Subordination: Core provision establishing the subordination of landlord's lien to the lender's security interest

5. Representations and Warranties: Statements by the landlord regarding their authority, ownership, and existing liens

6. Landlord's Covenants: Specific promises by the landlord regarding the subordinated position and future actions

7. Notice Requirements: Procedures for providing notices between parties regarding defaults, enforcement, or other significant events

8. Term and Termination: Duration of the subordination agreement and circumstances for termination

9. Governing Law: Specification of Indian law as governing law and jurisdiction provisions

Optional Sections

1. Further Assurance: Additional commitments to execute further documents if needed - include when dealing with complex security arrangements

2. Access Rights: Provisions granting lender access to the property - include when lender requires specific access rights

3. Insurance and Casualty: Provisions regarding insurance proceeds and casualty events - include when significant insurance concerns exist

4. Assignment and Transfer: Provisions regarding the ability to assign rights under the agreement - include when assignments are contemplated

5. Dispute Resolution: Detailed arbitration or mediation procedures - include when parties prefer alternative dispute resolution

Suggested Schedules

1. Property Description: Detailed legal description of the property subject to the agreement

2. Lease Details: Summary of key lease terms and copy of the lease agreement

3. Existing Liens: List of all existing liens and encumbrances on the property

4. Security Interest Details: Description of the lender's security interest being prioritized

5. Authorized Signatories: List of authorized signatories and their powers for each party

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Real Estate

Banking & Financial Services

Commercial Property

Industrial & Manufacturing

Retail

Hospitality

Logistics & Warehousing

Healthcare

Technology

Relevant Teams

Legal

Real Estate

Finance

Risk Management

Property Management

Corporate Services

Facilities Management

Commercial Operations

Treasury

Relevant Roles

Real Estate Manager

Property Manager

Legal Counsel

Finance Director

Commercial Lease Manager

Risk Manager

Corporate Counsel

Asset Manager

Facility Manager

Commercial Property Director

Banking Relationship Manager

Security Trustee Manager

Industries
Transfer of Property Act, 1882: Governs the transfer of property rights and interests in India, including leases and creation of charges on property. Particularly relevant for understanding the nature of landlord's rights and liens.
Indian Contract Act, 1872: Provides the fundamental principles of contract formation and enforcement, essential for the validity and enforceability of the subordination agreement.
Registration Act, 1908: Determines whether the subordination agreement needs to be registered and the formal requirements for registration of property-related documents.
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI): Relevant for understanding the priorities and enforcement of security interests, particularly when banks or financial institutions are involved.
Indian Easements Act, 1882: Governs rights and liabilities attached to property, including subordinate rights and interests in immovable property.
State-specific Rent Control Acts: Local laws that regulate landlord-tenant relationships and may affect the enforceability of certain provisions in the subordination agreement.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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