I am a tennant in an office building that is being sold. I have been asked by the current landlord to sign an SNDA agreement.

What exactly is this? I plan to stay in the building.

Thanks

Your landlord / new landlord is likely getting a mortgage. The lender wants this and it basically says the lender will not disturb you or the lease as long as you pay them the rent in event they foreclose. It also probly has language that you are certifying the rent you pay to jive with what he told the bank you pay. And it subordinates to a new lien as many leases are recorded.

I would suspect your lease also has language that says you must sign it if asked.
End of the day I wouldn’t worry about it at all.

The lender may not lend if you don't sign it.

It should be in your current lease that you will sign it.

As a tenant with a lease preceding the lien, your leasehold is ahead of the bank's lien.

This creates a title problem for them if they go to foreclose.

You should sign it, it does not hurt you in any way if it is a standard document.

I am not a lawyer, but I did own commercial real estate for 20 years.

Perfectly answered in the first two posts.

A tenant leasehold position should always be scrutinized by a lender or other lienholder. If you pay less than market rent especially so. One concern I would preview the document for is any language about negating previous agreements or raises in the lease rate that isn't already authorized. If a lienholder takes a property, they like to raise rates to help cover the costs associated with the collection, and tenants paying less than market rates can negatively affect the value of a building.

OK thank you all for the replies. It alleviates concerns I have.

The main concern of a lender is that the tenants are actually there, and they are performing in accord with the lease the owner has given the potential lender. It also probably gives the lender the right to collect rents if the owner defaults to the lender.

As always, though, if you have legal questions, ask your lawyer in your state. Do not rely on your internet friends. This could be important later, so know what you are signing.

jhe thank you.

The only caveat I will add, is that you are not obligated to "give" more in the SNDA than is required by your lease. Read the SNDA term in your lease, make sure that this document does not obligate you to more than you are already obligated. Once that is done, do a quick mental inventory and ask yourself if the landlord is in any sort of technical default (toilet is leaking, AC isn't working properly, etc.) if you have any unresolved issues, get them resolved by the landlord before signing the SNDA, as you are likely confirming in the SNDA that there are no defaults or conditions which may cause a default, under the lease on the date you sign.