he commercial real estate market has been experiencing the kind of instability that requires due diligence from building owners and tenants alike.
A tenant may believe that, by signing a lease, it is assured its space as long as it upholds all stipulations of that lease. But in the event of a building foreclosure, tenants require additional protections to ensure that their investment in the leased space is not lost.
“Subordination, nondisturbance and attornment — or SNDA — provisions are something tenants should pay attention to in their lease in the event of a default by the landlord that leads to foreclosure,” says Cameron McCausland, partner and director of Transaction Management at Southfield, Michigan-based Plante Moran CRESA. “The tenant could end up with a lender for a landlord, who may not have to uphold agreements within the lease, or even the lease itself, if the tenant is not properly protected.”
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