Attornment And Non Disturbance Agreement Template for Malaysia

An Attornment And Non Disturbance Agreement (ANDA) is a legally binding tripartite contract between property owners, tenants, and lenders that protects your interests when occupying mortgaged commercial property in Malaysia. Under the National Land Code 1965, this agreement ensures your tenancy rights remain secure even if your landlord defaults on their mortgage obligations.

When do you need this document?

You need an ANDA when entering into or renewing commercial lease agreements for properties that are mortgaged to financial institutions. This is particularly common in shopping centres, office buildings, warehouses, and retail spaces where property owners have secured financing against the premises. The agreement becomes crucial during property development projects, refinancing arrangements, or when existing tenants face potential disruption due to landlord financial difficulties. Banks and financial institutions often require ANDAs as part of their lending conditions to protect their security interests while ensuring business continuity for tenants.

Key legal considerations

Your ANDA must clearly establish the hierarchy of rights between your lease and the mortgage under Malaysian contract law. The agreement should specify that while your lease rights are subordinate to the mortgage, the lender commits not to disturb your peaceful enjoyment of the property provided you comply with lease terms. Critical clauses include recognition of your existing lease terms, continuation of tenancy upon mortgage enforcement, and procedures for rent payments during transition periods. The document must address your obligations to attorn to the lender if they take possession, while securing your right to remain as tenant under the original lease conditions. Payment obligations, maintenance responsibilities, and termination procedures require careful drafting to protect your business operations.

Legal requirements in Malaysia

Under the National Land Code 1965, ANDAs involving registered land must comply with specific documentation requirements and may require registration with the relevant land registry. The Contracts Act 1950 governs the agreement's formation and enforceability, requiring clear consideration and mutual consent from all parties. Your agreement must align with the Specific Relief Act 1950 regarding enforcement mechanisms and remedies available to each party. The Distress Act 1951 provisions relating to landlord remedies and rent collection procedures must be considered in drafting non-disturbance clauses. Additionally, compliance with the Powers of Attorney Act 1949 may be necessary if representatives execute the agreement on behalf of corporate parties, ensuring proper authorisation and legal capacity for all signatories.