How commercial tenants can enforce their rights in the event of foreclosure

he commercial real estate market has been experiencing the kind of instability that requires due diligence from building owners and tenants alike.
A tenant may believe that, by signing a lease, it is assured its space as long as it upholds all stipulations of that lease. But in the event of a building foreclosure, tenants require additional protections to ensure that their investment in the leased space is not lost.
“Subordination, nondisturbance and attornment — or SNDA — provisions are something tenants should pay attention to in their lease in the event of a default by the landlord that leads to foreclosure,” says Cameron McCausland, partner and director of Transaction Management at Southfield, Michigan-based Plante Moran CRESA. “The tenant could end up with a lender for a landlord, who may not have to uphold agreements within the lease, or even the lease itself, if the tenant is not properly protected.”

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