Receiverships Don’t Have to Disrupt Retail Tenants
Feb 19, 2010 2:40 PM
At the end of December, there were $1.6 billion in bank-owned retail properties, according to New York-based research firm Real Capital Analytics. As more retail properties end up in the hands of court-appointed receivers, tenants are entering uncertain territory when it comes to their rights and responsibilities.
The growing number of receiverships is shedding new light on a lease clause that got little attention during the industry’s boom years: subordination, non-disturbance and attornment (SNDA) agreements. Such agreements protect both lenders and tenants in the event that a lender forecloses on a property or moves to have a receiver named.
The SNDA agreement is actually three clauses in one:
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