Document background
The Subordination And Non Disturbance Agreement (SNDA) is essential in German commercial real estate financing where property owners seek to obtain or refinance mortgage loans while having existing tenants in place. This document serves multiple purposes: it subordinates the tenant's leasehold interest to the lender's mortgage security, provides the tenant with assurance of continued occupancy even if the lender forecloses, and establishes the tenant's obligation to recognize the lender as its new landlord in case of enforcement. Under German law, special attention must be paid to land registration requirements, notarization obligations, and specific provisions of the German Civil Code (BGB) regarding real property rights and security interests. The agreement is particularly crucial in commercial property financing as it helps balance the interests of all parties while ensuring compliance with German property and security laws.
