Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Subordination Without Nondisturbance: A One-Sided Marriage
If love and marriage go together like a horse and carriage, surely a demand for subordination should be followed by a request for nondisturbance. For purposes of this article, it is assumed that the request (demand) for subordination is being made by a landlord (currently in lease negotiations with a prospective tenant) who intends to effect a financing either in the near future for initial permanent funding, or in the distant future for perhaps expansion or eventual refinancing. In effect, subordination (and attornment) by a tenant is the tenant's vow to remain a tenant through good times or bad (including foreclosure and its aftermath), for better or for worse; but, if the landlord does not give the tenant nondisturbance protection, the landlord is not reciprocating the vow. Naked subordination (subordination without nondisturbance) allows any mortgagee who may succeed to the landlord's position by foreclosure to accept or reject the tenant (i.e., honor or terminate the tenant's lease) by virtue of the tenant's subordinate position.
A tenant will be subordinate to a lender who “takes over the property” by foreclosure either because the lender's mortgage was recorded prior to the execution of the tenant's lease (whether or not the lease is recorded), or because the tenant, whose lease was prior in time to the recordation of the lender's mortgage, executed a subordination agreement. Recent events have shown that the previously unlikely scenario of a landlord default followed by a lender takeover is not only possible but is no longer a rarity. As a result, many tenants are now vulnerable to successors in interest who may either terminate their leaseholds or continue them after weakening many leasehold rights. Accordingly, tenants must start to focus on subordination provisions in order to ameliorate the harsh potential results of naked subordination.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.