Encyclopedia
SNDA
Subordination, non-disturbance and attornment agreement. It sets out the tenant's position relative to a lender.
For example: A tenant asks for an SNDA so a lender can't disturb the lease. (Illustration only, not a real deal.)
This is a general industry term with no single official definition. Your lease or contract wording controls.
Example only, not a real client. Say you are signing a long lease in a building with a mortgage on it. Your lawyer asks the landlord’s lender for an agreement confirming that, if the lender ever takes over the building, your lease continues as long as you keep paying. You invest in your fit-out knowing your tenancy is protected.
What I’d tell a friend
If you are investing heavily in a space, ask about the landlord’s lender and whether you can get non-disturbance protection.
Why it matters to you
If the landlord defaults on its mortgage, an SNDA can keep your lease in place. Without one, the lender may be able to end your tenancy or change the terms, which puts your build-out and your location at risk.
How to use it in your deal
Tenants with significant investment in their space should ask for non-disturbance protection in the lease, requiring the landlord to obtain an SNDA from current and future lenders. Review the lender's form carefully: watch for clauses saying the lender isn't bound by prepaid rent, unpaid inducements or landlord defaults.
Landlords should expect lenders to require subordination and should make the process quick. Lenders want attornment to keep rent flowing. Buyers and lenders should check which tenants have SNDAs and on what terms. Ask for the SNDA during lease negotiation, not after the landlord refinances, since you have the most leverage before signing.
Mistakes I see
Tenants signing subordination without non-disturbance. Not reading lender exceptions. Slow responses delaying financing.
In BC and Vancouver
These are contracts; registration on title may follow the Land Title Act.
Official sources: CanLII (court decisions) · Land Title Act (BC Laws)
What an SNDA does
SNDA stands for subordination, non-disturbance and attornment. It is an agreement between tenant, landlord and lender. The tenant agrees its lease ranks behind the mortgage, the lender agrees not to disturb the tenant if it takes over, and the tenant agrees to recognize the lender as landlord in that case.
Lenders often ask tenants to sign one. The non-disturbance part is the piece that protects you.
What to watch
Many leases require you to sign whatever subordination the landlord’s lender asks for. Ask that this only applies if the lender also gives you non-disturbance protection.
Read the document carefully before signing, and check with a BC lawyer on how it affects your rights.
Why non-disturbance belongs in the offer
If your lease ranks behind the landlord’s mortgage and the lender takes over, that lender may be able to end the tenancy. A subordination, non-disturbance and attornment agreement (SNDA) is how many tenants stay put when that happens, as long as they are not in default.
Ask for non-disturbance in the offer, not after you have spent on the fit-out. Landlords often promise "reasonable efforts" to get one. Read who pays the lender’s fee, and have a BC lawyer review the lender’s form for prepaid rent and unpaid inducements.
Questions to ask before you sign
- Will the lender agree not to disturb me?
- What exceptions apply?
- Is my inducement protected?
- Is it registered?
Keep reading
Related terms: Estoppel certificate
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.