SNDA (Subordination, Non-Disturbance, and Attornment)
What an SNDA is, why lenders require subordination, what non-disturbance protects, and how attornment works after a foreclosure.
Last updated: 2026-05-06
An SNDA — Subordination, Non-Disturbance, and Attornment agreement — is a three-party document signed by a tenant, the landlord, and the landlord's lender. Each of the three parts answers a different question about what happens if the lender ends up owning the building after a default.
The three parts
Subordination says the tenant's lease is junior to the lender's mortgage. Without subordination, the lender's security interest could be jeopardised by the existence of a senior lease. Most institutional lenders require subordination as a condition of financing.
Non-disturbance is the tenant's protection. It says that even though the lease is subordinate to the mortgage, if the lender forecloses, the lender (or whoever buys the building at the foreclosure sale) will honour the lease and not evict the tenant. Without non-disturbance, the lender could foreclose and clear the lease as a junior interest, leaving the tenant scrambling.
Attornment is the tenant's reciprocal commitment. It says that if the lender takes over the building, the tenant will accept the lender (or new owner) as its new landlord, pay rent to that party, and continue to perform under the lease. Attornment is what allows the lender to step into the landlord's shoes seamlessly.
The three together are a balanced compromise: the lender gets priority and operational continuity if it forecloses; the tenant gets continuity of tenancy and is not at risk of eviction; the landlord gets to finance the building.
Why this matters
Without an SNDA, a tenant is exposed in two directions. If the lease is signed before the mortgage, the lease is senior, and a foreclosure may leave the tenant in place but the lender exposed — institutional lenders will generally not lend against a building unless they get subordination. If the lease is signed after the mortgage, the lease is automatically subordinate, and a foreclosure can wipe the lease out — the tenant could be evicted by the foreclosing lender or successor owner.
The SNDA fixes both halves. Subordinate the lease to the mortgage, but extract a binding non-disturbance commitment from the lender at the same time.
Negotiating SNDAs
The leverage runs in both directions. Lenders want the right to refuse non-disturbance for any tenant they consider non-creditworthy or non-strategic to the building. Tenants want non-disturbance baked into the lease itself, so the landlord must deliver an executed SNDA from any current or future lender.
A well-negotiated commercial lease will:
- Require the landlord to deliver an SNDA from the current lender before lease commencement.
- Require the landlord to deliver an SNDA from any future lender within a defined window (typically 30 days of the new financing closing).
- Specify that the SNDA must be on the lender's "commercially reasonable" form, with carve-outs the tenant has reviewed.
- Allow the tenant to terminate the lease (or some other remedy) if the landlord cannot deliver an SNDA.
A common landlord pushback is to commit only to using "reasonable efforts" to obtain an SNDA. This is materially weaker than a hard delivery obligation; the difference is whether the tenant has a remedy when delivery fails.
What the lender's form usually contains
Lender SNDA forms vary, but typical landlord-favourable provisions to push back on include:
A carve-out from non-disturbance for tenant defaults. Reasonable in concept — the lender should not be locked into a defaulting tenancy — but watch for an over-broad definition of "default" that includes minor or curable matters.
A limitation on the lender's liability for prior landlord defaults. Most SNDAs say the lender, if it succeeds to the lease, is not liable for the landlord's pre-foreclosure breaches, prepaid rent more than one month, or unfunded TI allowances. This is standard lender practice, but it shifts unfunded-TI risk to the tenant. Negotiate to preserve TI obligations or to require the landlord to fund the TI before foreclosure.
A modification or cap on the lease's notice and cure rights. Lenders sometimes require longer cure periods than the lease itself provides. This may be acceptable but should be reciprocal.
Estoppel vs SNDA
The two often arrive together but do different work. An estoppel reports facts about the lease as it stands today. An SNDA modifies the lease's relationship to a future lender. Sign each on its own merits, even when the lender's counsel sends both as a single package.
APAC notes
Hong Kong and Singapore institutional financings routinely require SNDAs from major tenants. The substance is the same as US practice; the document may be titled differently (a "tenant acknowledgement" or "lease confirmation").
Japan office financings have historically relied less on SNDA-style instruments and more on direct lender review of leases plus lender-friendly assignment-of-rents arrangements. Foreign-funded transactions in Tokyo and J-REIT financings now request SNDA-style documents more often, especially for anchor tenants in international-grade towers.
If you are abstracting a lease portfolio for a financing or sale, having SNDA delivery obligations, current-lender carve-outs, and the lender's non-disturbance form referenced in the lease all captured per lease — with citations back to the page — is what compresses the diligence cycle. LeaseTrace does that extraction.