{"id":36911,"date":"2020-01-13T18:20:56","date_gmt":"2020-01-13T16:20:56","guid":{"rendered":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/?p=36911"},"modified":"2025-05-22T13:09:36","modified_gmt":"2025-05-22T10:09:36","slug":"legal-agreements-to-protect-landlords","status":"publish","type":"post","link":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2020\/01\/13\/legal-agreements-to-protect-landlords\/","title":{"rendered":"Legal Agreements to Protect Landlords"},"content":{"rendered":"\n

NYC-based\u00a0boutique law firm\u00a0Pardalis & Nohavicka<\/a>\u00a0brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients throughout the United States and around the world.<\/em><\/strong> <\/p>\n\n\n\n

When a landlord looks to make their next big move \u2013 whether it\u2019s refinancing a loan or selling their property \u2013 certain provisions in their original lease with tenants determine the process and rights of both parties. <\/p>\n\n\n\n

A simple scenario could be when a landlord chooses to refinance,\nwhich is when a mortgage is replaced by a new loan. This could be done to lower\nthe landlord\u2019s interest rate or if the landlord wants to borrow more money\nagainst the property. <\/p>\n\n\n\n

An Estoppel Certificate and\/or a subordination, non-disturbance\nand attornment agreement (SNDA) can be beneficial for the landlord to prove\ntheir credibility to future lenders and save money.<\/p>\n\n\n\n

<\/span>The Role of the Tenant in Refinancing<\/strong> <\/span><\/h4>\n\n\n\n

A reliable tenant who consistently pays their rent on time improves\nthe landlord\u2019s ability to refinance the loan. This is because the lender generally\nreviews the accounts payable \u2013 including rents collected \u2013 to determine whether\nthey are paid in full and on time. <\/p>\n\n\n\n

Essentially, if a tenant can pay the rent to the landlord, then\nthe landlord can make their mortgage payments on time. Conversely, if the\ntenant misses a rent payment or is inconsistent, it could delay the landlord\u2019s\nmortgage payments (depending upon the landlord\u2019s financial dependency on their\nmonthly rent collection). <\/p>\n\n\n\n

In this case, lenders will need some sort of reassurance of\ncompliance by both parties amd might request to see an Estoppel Certificate\nprior to issuing a potential loan. An Estoppel Certificate is a legal affidavit\nmade and signed by the tenant that confirms the terms and details of agreements\nmade between landlords and tenants. In it, the tenant states certain facts,\nincluding the term of their lease, the monthly rent amount and that all rents\nhave been paid thus far. <\/p>\n\n\n\n

Although it is usually difficult to receive Estoppel Certificates\nfrom all residential tenants in a larger building, they are reassuring to\nlenders because they show the acceptance of true agreements made by both\nparties. This reinforces that the rent has been or will be paid and that the landlord\nhas been fulfilling their duties set in the lease. <\/p>\n\n\n\n

<\/span>SNDA Agreement<\/strong><\/span><\/h4>\n\n\n\n

Alternatively, in scenarios in which a landlord might take out a\nloan, sell their property or go through foreclosure, an SNDA agreement could be\nrequired. This document includes agreements made between tenants, landlords and\nlenders, and is broken down into three parts: subordination, non-disturbance\nand attornment. <\/p>\n\n\n\n