Estoppel certificates and SNDAs

Commercial lenders ask for two tenant documents that are not the lease itself. An estoppel certificate is the tenant's confirmation, usually signed near closing, of the business terms the lender is relying on. A subordination, non-disturbance and attornment agreement, called an SNDA, is a three-party document among tenant, landlord, and lender. Capital Market Funds arranges the financing file. It does not sign either document as the lender, and it does not give the legal effect of a form. This note is general information for sponsors and brokers. It is not legal advice, not tax advice, and not a reading of your lease. Have counsel abstract the documents that bind you.

The estoppel is how a lender stops a surprise. The rent roll may show a number the tenant says was abated. The lease file may omit an amendment, a free-rent side letter, or a purchase option. The estoppel asks the tenant to state the commencement and expiration, the rent and any unpaid amount, the security deposit, whether the landlord is in default, and whether options have been exercised. If the tenant's signature disagrees with the borrower's abstract, the loan sizing changes or the closing waits. Anchors often have their own form and will not sign the lender's.

What the three SNDA words do

Subordination puts the lease behind the mortgage, so a foreclosure can, in principle, wipe a lease that is junior. Non-disturbance is the tenant's protection: if the tenant is performing, a foreclosure buyer will not evict it. Attornment is the tenant's agreement to recognize that buyer as the new landlord. Lenders want all three because the mortgage has to be enforceable and the rent has to survive the remedy. Tenants, especially grocers and credit shops, negotiate the non-disturbance piece and often refuse to subordinate unless it is paired with non-disturbance. Some leases already require the landlord to obtain an SNDA on a stated form. Missing that form is a closing problem discovered late if nobody asked in the first week.

Timing is the practical failure. National tenants route estoppels and SNDAs through a lease-administration group. A request sent ten days before closing is a request that will not be signed ten days before closing. Start when the lender is identified, send the tenant's own form if the lease names one, and track who has authority to sign. A shadow grocer who is not your tenant will not sign a tenant estoppel. That limit is explained on shadow-anchored financing.

What to collect before anyone books a closing

A lease abstract, every amendment, and a list of which tenants must sign because of size or because the loan documents say so. Grocery anchors and any tenant whose rent is large enough to move the coverage test belong on that list. The Arizona property pages that depend on these signatures include the grocery-anchored cluster. The document list that sits beside the estoppel, including the rent roll itself, is the commercial loan documents checklist.

The office is 7373 E Doubletree Ranch Rd #255, Scottsdale, AZ 85258. The phone is (480) 495-8072. Capital Market Funds, LLC - CBK-2007014 - Commercial Mortgage Banker and NMLS 1445066. A signed estoppel delivered to this office is not a funding condition we can waive. The lender and counsel decide whether it matches the loan file.