1. Presented by: Daniel B. Myers, Esq. Wendel, Rosen, Black & Dean LLP
Estoppels & SNDAs: Who, What, When,
Where & Why
Presented by: Daniel B. Myers, Esq. Wendel, Rosen, Black & Dean LLP

2. INTRODUCTION Purpose and importance of Estoppels and SNDAs
Relevant lease provisions
Key issues in negotiating Estoppels and SNDAs
Practical advice in responding

3. PURPOSE AND IMPORTANCE
Estoppels
Intended to report on status of lease (factual matters and lease terms) to prospective purchasers and lenders
Lease provisions can require both Landlords and Tenants to provide Estoppels

4. PURPOSE AND IMPORTANCE (continued)
Subordination, Non-disturbance and Attornment Agreement (SNDA)
Lease (particularly if a memorandum of lease is recorded) gives Tenant priority vis-à-vis subsequent financing
Subordination: Agreement between Landlord’s Lender and Tenant that the lease will be subordinate (i.e., junior) to Lender’s mortgage

5. PURPOSE AND IMPORTANCE (continued)
Subordination, Non-disturbance and Attornment Agreement (SNDA)
Non-disturbance: Agreement by Landlord’s Lender to not disturb Tenant and to recognize Tenant’s lease in the event of a foreclosure by Lender.
Attornment: Agreement by Tenant to recognize the Lender or the buyer at foreclosure as the “Landlord” under the lease with the same terms and conditions existing under the lease.

6. LEASE PROVISIONS Estoppels Timing
Effect of delays or failure to respond
Reimbursement?
Attach form of estoppel certificate?

7. LEASE PROVISIONS SNDAs
Automatic subordination (current/future) and non- disturbance protection
Timing and effects of delays or failure to respond
Attach form of SNDA?
Do you run title?
Contingency to provide SNDA for existing financing

8. ESTOPPEL LEGAL ISSUES
Binding Effect – Plaza Freeway case in CA (estoppel can bind signatory and prevent from taking different position at later date)
Addressee
Factual Statements
“To actual knowledge” qualifier

9. ESTOPPEL LEGAL ISSUES (continued)
Delete compliance with laws/hazardous materials provisions
Avoid waiving potential exclusive use, prohibited uses and co-tenancy violations
Watch for/remove SNDA-type provisions & prohibitions/requirements in Estoppels
Savings language to try to avoid binding effect

10. SNDA LEGAL ISSUES
Subordinate to “lien” of deed of trust – not provisions of deed of trust
Non-disturbance and attornment language
Prohibitions on assignment, subletting, amendments, prepaid rent, etc.

11. SNDA LEGAL ISSUES (Continued)
Lender subject to:
Defaults
Offsets (Important if Tenant Improvement Allowance or self-help rights)
Security Deposit/Prepaid Rent
Amendments
Landlord construction and Tenant Improvement Allowance obligations

12. SNDA LEGAL ISSUES (Continued)
Lender notice and cure rights
Casualty/condemnation proceeds
Exculpation of liability

13. SNDA LEGAL ISSUES (Continued)
Hazardous Materials provisions
Estoppel language in SNDAs
Interpretation language
Jurisdiction

14. PRACTICAL ADVICE
Don’t forget about SNDA and Estoppel provisions during lease negotiations
Try to avoid serial Landlord requests for Estoppels – instead intended for lenders and purchasers
When are SNDAs required/not required?
Create process to respond to Estoppel/SNDA requests
Always confirm response times set forth in lease
Forms attached to lease – Does this work?

15. PRACTICAL ADVICE (Continued)
Reimbursement of costs for responding to Estoppels/SNDAs – Does this work?
Goodwill with Landlord
Bargaining leverage for other issues
Work to resolve issues directly with Lender
When to involve/not to involve Landlord

16. Questions?

17. THANK YOU
Daniel B. Myers, Esq. Wendel, Rosen, Black & Dean LLP