Lease Subordination Clause Explained

Summary

A subordination clause in a lease means the lease is secondary to any mortgages or liens on the property. If the landlord defaults, the lenders rights take precedence, potentially ending the lease. In Minnesota, tenants may recover prepaid rent if a lease is terminated due to foreclosure. Adding a clause for refunding prepaid rent in case of foreclosure can offer protection. Consulting a local attorney is advisable for personalized advice.

Full Conversation

Need to understand what this means in a lease/rental contract. Subordination of lease. This lease and tenent's interest hereunder are and shall be subordinate, junior, and inferior to any and all mortgages, liens, or encumbrances now or hereafter placed on the premises by landlord, all advances made under any such mortgages, liens, or encumbrances (including, but not limited to, future advances), the interest payable on such mortages, liens, or encombrances and any and all renewals, extensions or modification of such mortgages, liens, or encumbrances.
Hi ****! The "Subordination of Lease" clause means that your lease is secondary to any mortgages or liens the landlord has on the property. If the landlord defaults, the lender's rights take precedence over your lease rights. Would you like more information on how this might affect you?
yes please
Sure, ****! Here's more information on how the Subordination of Lease clause might affect you:
- If the landlord defaults on their mortgage, the lender may foreclose on the property, potentially ending your lease.
- You may be required to sign a subordination, non-disturbance, and attornment agreement (SNDA) to protect your tenancy.
- It's advisable to discuss these clauses with a legal professional if you have concerns.
Let me know if you have more questions!
If the landlord defaults, do I get my advanced rental payments back?
Case Rating: *
If the landlord defaults and your lease is terminated due to foreclosure, you may be entitled to recover any prepaid rent, but it depends on the lease terms and state laws. Consulting a local attorney could provide clarity specific to your situation.
This is in the state of Minnesota. Does Minnesota have a law protecting the tenent?
Case Rating: *
In Minnesota, tenants are protected by various laws:
- Minnesota's landlord-tenant law requires landlords to maintain habitable conditions.
- Tenants have the right to withhold rent if repairs are not made.
- Tenants may recover prepaid rent if a lease is terminated due to foreclosure.
Consider consulting a local attorney for detailed advice.
can you give me language to add to the lease that in case of a forclosure, I would receive my advanced payment back?
Case Rating: *
You can consider adding the following clause to your lease agreement to protect your advanced payments in case of foreclosure:
"In the event of foreclosure resulting in the termination of this lease, the Landlord agrees to refund the Tenant any prepaid rent for the remaining lease term within 30 days of lease termination."
It's always wise to consult with a local attorney to ensure this clause aligns with current laws in North Dakota.