Attornment And Non Disturbance Agreement Template for Germany

An Attornment And Non Disturbance Agreement (SNDA) is a three-party contract that balances the competing interests of tenants, landlords, and lenders in German commercial real estate financing. Under German law, this document serves as a critical protection mechanism when a property subject to a lease is also encumbered by a mortgage or other security interest.

When do you need this document?

You need an SNDA whenever you are entering into a commercial lease on a property that is financed or will be financed by a mortgage. If you are a tenant, your landlord's lender may require this agreement as a condition of financing. Commercial property owners often cannot secure financing without providing lenders with certainty about existing tenant relationships. The agreement becomes essential during refinancing transactions, when existing leases must be reconciled with new loan terms, or when purchasing a property with existing tenants and financing.

Key legal considerations

The agreement must clearly establish the subordination hierarchy, placing the lender's mortgage interest above the tenant's lease rights. However, it simultaneously provides non-disturbance protections, ensuring that if the lender forecloses, you as the tenant can remain in the property under the same lease terms. The attornment clause requires you to recognize a new owner as your landlord following foreclosure. Key provisions should address rent payment redirection procedures, cure periods for defaults, and specific performance obligations. The document must also consider potential conflicts between lease terms and loan covenants, establishing clear protocols for resolving disputes between parties.

Legal requirements in Germany

Under the Bürgerliches Gesetzbuch (BGB), SNDAs must comply with general contract formation requirements outlined in §§ 311-314. Real estate aspects fall under property law provisions in §§ 873-902, particularly regarding land register (Grundbuch) considerations. The agreement typically requires notarization under German law to ensure enforceability, especially when it affects real property rights. Compliance with the Grundbuchordnung (GBO) is essential if the agreement needs registration in the land register. In insolvency situations, provisions of the Insolvenzordnung (InsO) §§ 103-128 may affect the agreement's enforceability, making careful drafting crucial. The document must also consider foreclosure procedures under the Zwangsversteigerung und Zwangsverwaltung (ZVG) to ensure the non-disturbance provisions remain effective during enforcement proceedings.