Lease Subordination Agreement Template: Mortgage Priority

Lease Subordination Agreement Template

This Lease Subordination Agreement (“Agreement”) is entered into as of [Effective Date], by and among:

Landlord: [Landlord Full Legal Name], of [Address]

Tenant: [Tenant Full Legal Name], of [Address]

Lender or Senior Interest Holder: [Lender Full Legal Name], of [Address]

Together, the parties are referred to as the “Parties.”

1. Property and Lease Information

This Agreement relates to the following property:

Property Address: [Property Address]

City, State, ZIP Code: [City, State, ZIP Code]

Legal Description, if applicable:

[Insert legal description]

The lease affected by this Agreement is described as follows:

Lease Date: [Lease Date]

Landlord: [Landlord Name]

Tenant: [Tenant Name]

Premises: [Description of Leased Premises]

Lease Term: [Start Date] to [End Date]

Any amendment, renewal, extension, guaranty, or related lease document covered by this Agreement is described below:

[Describe related lease documents or write “None”]

2. Senior Interest Information

The Landlord states that the property is subject, or may become subject, to the following senior interest:

☐ Mortgage

☐ Deed of trust

☐ Ground lease

☐ Security instrument

☐ Other senior real property interest: [Describe]

Date of senior instrument: [Date]

Holder of senior interest: [Lender or Senior Interest Holder Name]

Recording information, if applicable:

[Instrument Number / Book / Page / Other]

3. Purpose of Agreement

The purpose of this Agreement is to establish that the Tenant’s rights under the lease are subordinate to the senior interest identified above, subject to any additional terms expressly stated in this Agreement.

4. Subordination of Lease

The Tenant agrees that the lease, and all of Tenant’s rights, claims, and interests arising from the lease, are and shall remain subordinate and junior to the senior interest described in this Agreement, including any renewals, modifications, replacements, consolidations, extensions, restatements, or refinancing of that senior interest, to the extent permitted by law.

This subordination applies whether the senior interest currently exists or is later granted, if the lease or this Agreement allows that result.

5. Scope of Subordination

The subordination described in this Agreement applies to:

• the leasehold estate created by the lease;

• Tenant’s right of possession under the lease, subject to any separate written protections;

• any option, privilege, amendment, or extension under the lease, unless otherwise stated below; and

• any claim that the lease has priority over the senior interest described in this Agreement.

the leasehold estate created by the lease;

Tenant’s right of possession under the lease, subject to any separate written protections;

any option, privilege, amendment, or extension under the lease, unless otherwise stated below; and

any claim that the lease has priority over the senior interest described in this Agreement.

Any limit on the scope of subordination is as follows:

[Describe limits or write “None”]

6. Tenant Acknowledgments

The Tenant acknowledges and agrees that:

• the senior interest holder may rely on this Agreement;

• the Tenant has reviewed or had the opportunity to review the lease and the effect of this Agreement;

• this Agreement changes the priority of interests relating to the property as stated here; and

• except as expressly provided in a separate written agreement, this Agreement does not create any new right in the Tenant against the lender or senior interest holder.

the senior interest holder may rely on this Agreement;

the Tenant has reviewed or had the opportunity to review the lease and the effect of this Agreement;

this Agreement changes the priority of interests relating to the property as stated here; and

except as expressly provided in a separate written agreement, this Agreement does not create any new right in the Tenant against the lender or senior interest holder.

7. Optional Attornment Terms

If the senior interest holder or its successor acquires title to the property through foreclosure, deed in lieu, assignment, sale, or other enforcement action, the Tenant shall, if required under this section, recognize that party as the new landlord under the lease.

☐ Attornment applies automatically

☐ Attornment applies only upon written notice

☐ Attornment does not apply unless separately agreed

Additional attornment terms, if any:

[Describe]

8. Optional Non-Disturbance Terms

The Parties may agree that, if the Tenant is not in default under the lease beyond any applicable notice and cure period, the Tenant’s possession will not be disturbed after enforcement of the senior interest.

☐ No non-disturbance protection is included in this Agreement

☐ Non-disturbance protection is included as follows:

[Describe any non-disturbance protection]

9. Landlord Representations

The Landlord represents, to the best of Landlord’s knowledge, that:

• the Landlord is the current landlord under the lease;

• the lease identified in this Agreement is true and complete, including any amendments disclosed here;

• the Landlord has authority to enter into this Agreement; and

• no additional person’s consent is required except as disclosed below.

the Landlord is the current landlord under the lease;

the lease identified in this Agreement is true and complete, including any amendments disclosed here;

the Landlord has authority to enter into this Agreement; and

no additional person’s consent is required except as disclosed below.

Disclosures or exceptions:

[Insert details or write “None”]

10. Tenant Representations

The Tenant represents, to the best of Tenant’s knowledge, that:

• the lease is currently in effect;

• the Tenant is in possession of the premises, if applicable;

• the Tenant has not assigned the lease or sublet the premises except as disclosed below; and

• no material tenant default exists under the lease except as disclosed below.

the lease is currently in effect;

the Tenant is in possession of the premises, if applicable;

the Tenant has not assigned the lease or sublet the premises except as disclosed below; and

no material tenant default exists under the lease except as disclosed below.

11. Senior Interest Holder Protections

The senior interest holder shall not be bound by:

• any prepaid rent beyond [number] month(s), unless specifically accepted in writing;

• any amendment to the lease made without the senior interest holder’s required consent, if such consent is required;

• any offset, defense, claim, or credit against a prior landlord, except as required by law or expressly assumed in writing; or

• any obligation not expressly accepted by the senior interest holder in writing.

any prepaid rent beyond [number] month(s), unless specifically accepted in writing;

any amendment to the lease made without the senior interest holder’s required consent, if such consent is required;

any offset, defense, claim, or credit against a prior landlord, except as required by law or expressly assumed in writing; or

any obligation not expressly accepted by the senior interest holder in writing.

Any additional protections or limits are as follows:

[Describe or write “None”]

12. Notice Requirements

Any notice required under this Agreement must be in writing and sent to the addresses below, or to any updated address later provided in writing.

For Landlord:

Name: [Name]

Address: [Address]

Email: [Email Address]

For Tenant:

Name: [Name]

Address: [Address]

Email: [Email Address]

For Lender or Senior Interest Holder:

Name: [Name]

Address: [Address]

Email: [Email Address]

Notice is effective upon:

☐ Personal delivery

☐ Confirmed email delivery

☐ Certified mail

☐ Recognized courier

☐ Other: [Describe]

13. No Amendment of Lease Except as Stated

Except as expressly stated in this Agreement, the lease remains unchanged and in full force and effect.

Nothing in this Agreement is intended to modify the lease except with respect to priority, and any optional related terms, expressly stated here.

14. Governing Law

This Agreement shall be governed by the laws of [State/Country], except to the extent mandatory real estate, foreclosure, financing, or landlord-tenant law applies.

15. Entire Agreement

This Agreement contains the complete understanding of the Parties regarding the subordination of the lease to the senior interest described above and supersedes prior oral and written discussions on that subject.

Any amendment to this Agreement must be in writing and signed by the Parties.

16. Counterparts and Recording

This Agreement may be signed in counterparts, each of which will be treated as an original and all of which together will form one agreement.

The Parties may record this Agreement, or a memorandum of it, if permitted or required.

17. Signatures

Landlord:

Signature: __________________________

Name: [Full Name]

Title: [Title]

Company: [Landlord Name, if applicable]

Date: [Date]

Tenant:

Signature: __________________________

Name: [Full Name]

Title: [Title]

Company: [Tenant Name, if applicable]

Date: [Date]

Lender or Senior Interest Holder:

Signature: __________________________

Name: [Full Name]

Title: [Title]

Company: [Lender Name, if applicable]

Date: [Date]

18. Optional Notary Acknowledgment

State of [State]

County of [County]

On this [Day] day of [Month], [Year], before me, the undersigned notary public, personally appeared [Name of Signer], known to me or satisfactorily proven to be the person whose name is subscribed to this document, and acknowledged that they executed it for the purposes stated herein.

Notary Public Signature: __________________________

Printed Name: [Notary Name]

My Commission Expires: [Date]

Notary Seal: __________________________