How do I add an SNDA and Tenant Estoppel?

Description

The SNDA and Tenant Estoppel are used for tenants in commercial projects; lenders do not require such documents for tenants in multi-family housing projects but are used for commercial tenants in a mixed-use property. An agreement entered into by a commercial tenant, the landlord, and Lender, establishing a relationship between tenant and Lender.

An SNDA provides for the following:

Subordination - the tenant agrees to subordinate its interest under the lease to the borrower's obligations under the loan and the lender's rights and remedies.
Non-disturbance - following an Event of Default and a foreclosure sale, Lender agrees to honor the commercial lease (subject to certain limitations on the lender's liability).
Attornment - following an Event of Default and a foreclosure sale, the tenant agrees to attorn to Lender as the new landlord under the commercial lease.

When it comes to commercial real estate, the estoppel is a document, signed by a tenant, that verifies the terms, conditions, and status of the lease they have signed off on and is highly recommended as an additional way to ensure all parties keep their promises and cash flow is protected.

SNDA: An SNDA is an agreement which concerns (i) the rights of a tenant and Borrower/Landlord, (ii) control in connection with amending the tenant’s lease, and (iii) the relationship between the tenant, Borrower/Landlord, and Lender in the event of a default by the tenant under the lease or by Borrower/Landlord under the security instrument in connection with Lender’s loan.

Tenant Estoppel (Simple): A “Tenant Estoppel (Simple)” confirms certain basic facts (i) about the tenant’s lease at the Mortgaged Property and (i) about the parties to said lease.

Super Estoppel: A “Super Estoppel” is used when the Lender does not want to use an “SNDA + Tenant Estoppel.” It is not in addition to an SNDA + Tenant Estoppel, rather it is an either/or situation, i.e., a “Super Estoppel” or an “SNDA + Tenant Estoppel.” The “Super Estoppel” is a “Tenant Estoppel (Simple)” with a few extra lender protections which would be found in an SNDA, e.g., tenant attornment (in the event of Lender’s foreclosure, the tenant attorns to Lender or the purchaser of the Mortgaged Property (meaning, the tenant agrees to be the tenant of the new owner/landlord of the Mortgaged Property)).

GoDocs offers a few different options to order SNDAs/Estoppels:

Stand alone document (Product Select: SNDA and Estoppel)
Included in the final loan package (ordered with CommercialDocs, ApartmentDocs or InvestorDocs)
Extracted from Document List page with minimum fields completed (Borrower page, the Property page and the Lease Subordination page).

User Interface

From a documents order, navigate to the "Lease Subordination Tab" and Select "Add Lease Subordination"

Select the Property Address with the available drop-down. The SNDA is for all subject properties on the security instrument. You will receive an SNDA for the security instrument and not for a specific address on the security instrument. As such, the drop down references the first address, if more than one address, even though the SNDA will be for that tenant lease of the entire subject property.

Select the appropriate Lease Subordination Type with the drop-down: "SNDA - Regular (third party)" or "SNDA - Unconditional (related party)"

For the Designation, Select the appropriate drop-down option: "No", "Yes", or "Yes - Insert Blank Line"

(a) If "No", Input the Lessee Name, Designation, and Date of Lease

(b) If "Yes" or "Yes - Insert Blank Line", Input the Lessee Name and Date of Lease

If the Lessee is an Individual or a Trust, Check the box below

If there are Amendments to the Lease, Check the box below and Input the Dates of any Lease Amendments

If the Borrower is named the Lessor under the lease, Check the box below

If applicable, Input the Name and designation of Lessor as it appears in the Lease

If you would like to include a Blank Tenant Estoppel Certificate, Check the box below

Once you select to include the SNDA/Estoppel documents, you can individually generate the SNDA/EStoppel from the Document List tab, as long as the Borrower page, the Property page and the Lease Subordination page of an order have been filled out: