Document background
A Tenant Subordination Agreement becomes necessary when a property owner seeks new financing or refinancing of a commercial property with existing tenants. This document protects the interests of all parties by establishing clear priorities between the lease and mortgage, while ensuring the tenant's continued occupancy rights. Under U.S. law, these agreements are particularly important in commercial real estate transactions where lenders require assurance that their security interest takes priority over existing leasehold interests. The agreement typically includes provisions for subordination, non-disturbance, and attornment (SNDA), making it a crucial document for securing financing while maintaining stable tenant relationships.
