The Subordination, Non-disturbance and Attornment Agreement (SNDA) achieves the subordination of the tenant’s lease to the mortgage on the landlord’s fee estate and the contemporaneous protection of the tenant against the foreclosure of such mortgage. A full subordination clause contained in an SNDA has two principal components: (1) the leasehold estate in the lease is made subordinate in priority to the lien of the mortgage, and (2) in the event of any inconsistency between the terms of the mortgage and the terms of the lease, the terms of the mortgage will prevail.
Subordinating the leasehold estate to only the lien of the mortgage constitutes a property interest subordination, and affects only rights in identified collateral. By executing a lien subordination agreement, the subordinating party agrees to demote the priority of its lien in identified collateral to that of another secured creditor, thereby delaying its recourse to such collateral until the other creditor’s secured claim has been satisfied. (In re Lantana Motel, 124 B. R. 252 (1990)).
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