Subordination, Non-Disturbance and Attornment (SNDA)

An SNDA resolves a hidden risk in commercial leasing: what happens to a tenant's lease if the landlord's lender forecloses. It has three parts. Subordination means the tenant agrees its lease is subordinate to the lender's mortgage — the lender's interest comes first. Non-disturbance is the tenant's protection in return: the lender agrees that, as long as the tenant is not in default, it may remain in possession under the existing lease even after foreclosure. Attornment means the tenant agrees to recognize the lender (or a new owner) as its landlord if that happens. For a healthcare practice that has invested heavily in a buildout and depends on its location, the non-disturbance clause is the critical protection — without it, a foreclosure could void the lease and force the practice out. Requesting an SNDA at lease signing, especially for a long-term or build-to-suit space, safeguards the investment.

Without a non-disturbance agreement, a landlord's foreclosure can extinguish a tenant's lease. For practices with expensive buildouts, an SNDA protects both the location and the investment in it.

A practice signs a 12-year lease and invests $300,000 in its buildout. Two years later the landlord defaults. Because the lease included an SNDA with a non-disturbance clause, the practice continues operating undisturbed under the new owner.