Attornment is the agreement that a tenant consents to acknowledge a person who purchases an estate that the tenant has leased as his new landlord. Restated, when the owner of leased property sells the property to a third party, attornment is the transfer of authority as landlord to the purchaser.
A Little More on What is Attornment
According to English real property law, attornment is where a tenant acknowledges a new lord on the alienation of the land. Since the relationship between the landlord and the tenant was considered reciprocal, it was seen as unreasonable to subject the tenant to a new lord without his approval. Due to this reason, alienation could therefore not be carried out without the tenant consenting. However, in 1705, an act that was enacted abolished the necessity for attornment.
In current legal transactions, attornment is used to mean acknowledging the existence of the relationship between the landlord and the tenant. Under the tenant’s lease, a tenant has an obligation of providing an attornment on request. He is also required to give the nature of the existing income streams flowing from the property as part of due diligence to the creditor or potential buyer of the property in the process associated with the transaction.
A tenant is required to declare any existing disputes between him and the landlord at the time when the attornment is being executed. If a tenant refuses a request for attornment, a landlord can use it to establish grounds of evicting the tenant citing grounds such as insecurity of the lease being honored, and the existence of an actual case suitable for resolution in a declaratory judgment action.
In commercial real estate, attornment is used in the context of subordination, non-disturbance and attornment agreement (SNDA). This protects the tenant and the lender in case the landlord defaults on its commercial lending obligations. This means that the lease will remain in full force and effect.
References for Attornment
Academic Research for Attornment
- Foreclosure: Subordination, Non-Disturbance and Attornment Agreements, Feinstein, R. D., & Keyles, S. A. (1989). Prob. & Prop., 3, 38. This paper focuses on the SNDA agreements that made between a landlord and a tenant laying out their rights respectively together with those of a third party.
- The Ritual Dance Between Lessee and Lender—Subordination, Nondisturbance, and Attornment, Fisher Jr, M. P., & Goldman, R. H. (1995). Real Property, Probate and Trust Journal, 355-398. This paper discusses the common law concepts that govern SNDA agreements and also examines the legal principles that can be applied to these agreements.
- WHO’S ON FIRST—PROTECTING THE COMMERCIAL MORTGAGE LENDER: A Lender’s Overview of Subordination, Nondisturbance, and Attornment Agreements, Homburger, T. C., & Eiben, L. A. (2001). Real Property, Probate and Trust Journal, 411-444. This article focuses on how SNDAs can be used to facilitate the protection of commercial mortgage lenders.
- Tenants: innocent victims of the nation’s foreclosure crisis, Been, V., & Glashausser, A. (2009). Alb. Gov’t L. Rev., 2, 1. This paper identifies the problems of losing their homes faced by the tenants through no fault of their own when their landlords go into foreclosure.
- Lease Financing in Louisiana, Rubin, M. H., & Sperry, S. J. (1998). La. L. Rev., 59, 845. This is an investigation into the various lease financing practices carried out in Louisiana under the set state laws.
- Subleases: Protecting Subtenant’s Possession by Agreement with the Prime Landlord, Friedman, M. R. (1957).Prac. Law. 3, 59. This paper examines how tenants decide to sublease the space they had initially leased from the prime landlord and how these subtenants’ possession can be protected through an agreement with the prime landlord.
- Gaining maximum benefit from franchise agreements, management contracts, and leases, DeRoos, J. A. (2011). This article stipulates how individuals can gain benefits various agreements like the franchise agreements and leases. It shows how these contracts can provide someone with various services like ownership or brand service and then help one to achieve their investment and ownership objectives.
- Commercial Lending Issues in the United States, Saegert, A. M. (2001). Prob. & Prop., 15, 37. This article discusses the various issues that accompany commercial lending in the United States and its impacts.
- Historic Tax Credits Bring Needed Equity Financing to Urban Revitalization, Schon, D. F., & Palmer, M. K. (2012). Prob. & Prop., 26, 45. This paper focuses on the equity financing that is brought about by the historic tax credits and how it helps urban revitalization.
- Into Harms’ Way: Now That Harms v. Sprague Has Established the Lein Theory of Mortgages in Illinois, Does Foreclosure Cut Off Junior Lease or Can a Mortgage …, Gearen, J. J., Vranicar, J. E., & Becker, E. B. (1984). DePaul L. Rev., 34, 449. The paper explains how the mortgagee of commercial real estate regards the income that is generated from leases of the property to key tenants as part of the collateral that is as valuable as the property itself.
- What’s the Big Deal; Issues in Negotiating Large Office Leases, Dibbs, S. W. (2014). Prob. & Prop., 28, 42. This article investigates the different issues that one faces when attempting to negotiate leases for large offices.