Non-Disturbance and Attornment Agreement Definition

A non-disturbance and attornment agreement, commonly referred to as an NDA, is a legal document that outlines the rights of a tenant in the event of a change in ownership or a foreclosure on a property. This agreement is commonly used in commercial real estate transactions, and it protects the tenant’s leasehold interests in the event of a sale or transfer of the property.

Essentially, a non-disturbance and attornment agreement is a three-party agreement between the landlord, the tenant, and the new owner of the property. It establishes a legal relationship between the new owner and the tenant, which allows the tenant to continue using the property under the terms of their lease agreement. The agreement acts as a guarantee that the new owner will not disturb the tenant’s possession of the property, as long as the tenant continues to pay rent and fulfill the other obligations outlined in the lease agreement.

In most cases, a non-disturbance and attornment agreement is included as part of a larger commercial real estate transaction. For example, when a lender provides financing to a landlord, the lender will likely require the landlord to obtain non-disturbance agreements from all tenants as part of the loan documents. This ensures that the lender’s collateral is protected, and that the tenants will continue to pay rent even if the property changes ownership.

From a tenant’s perspective, a non-disturbance and attornment agreement provides valuable protection in the event of a change in ownership or a foreclosure on the property. Without such an agreement, a new owner may have the right to terminate the existing lease agreements and evict tenants, even if the tenants have been paying rent and complying with all other terms of their lease agreements. By signing an NDA, tenants can ensure that their leasehold interests are protected, and that they will be able to continue using the property under the terms of their existing lease agreements.

In summary, a non-disturbance and attornment agreement is a legal document that establishes a relationship between a tenant, a landlord, and a new owner of a property. It protects the tenant’s leasehold interests in the event of a change in ownership or a foreclosure on the property, ensuring that the tenant can continue using the property under the terms of their existing lease agreement. While this agreement may seem technical, it is an important consideration for any commercial tenant looking to protect their business interests and maintain continuity in their operations.