Key Commercial Lease Provisions and SNDAs That Concern Lenders in Mortgage and Leasehold Financing

Identifying and Correcting Red Flags That Negatively Impact the Lender's Collateral Package

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, December 17, 2015

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will discusses best practices for lender counsel in reviewing commercial leases, key clauses of concern to lenders, and lender protections with respect to the tenant. The program will assist lender counsel in identifying and fixing red flags that may impact the safeness and soundness of the lender’s loan. The program will also assist counsel who negotiate leases to identify provisions and issues that may cause future financing complications.

Description

As commercial leases are a critical component of real estate collateral, lenders need to review underlying lease provisions that impact income, consistency of cash flow, and continuation of the lease. Counsel must also assess whether the lease contains provisions that place an unusual or burdensome obligation on the landlord, particularly tenant improvements. Counsel who negotiate leases on the front end must be able to identify provisions and issues that may cause future financing complications.

Ground lease financing is of great concern to the tenant’s lender because the leasehold mortgage secures only the tenant’s leasehold rights and the fee estate remains unencumbered. There are numerous leasehold mortgagee protections that the lender must ensure are part of the underlying lease.

Whether a fee lease or a ground lease, lender’s counsel must be well-versed in subordination, non-disturbance and attornment (SNDA) agreements and estoppels that will minimize risks to the lender.

Listen as our authoritative panel of real estate practitioners looks at best practices for lender counsel reviewing commercial leases, key provisions for lenders, and SNDA agreements and estoppel certificates. The program will assist lender counsel in identifying and fixing red flags that may impact the safeness and soundness of the loan. The program will also assist counsel negotiating leases to identify provisions and issues that may cause financing problems in the future.

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Outline

  1. Key commercial lease provisions for lenders
    1. Payment of rent, security deposits
    2. Renewal or extension options during loan term
    3. Construction obligations
    4. Casualty and condemnation
    5. Go dark provisions
    6. Abatement rights
    7. Assignment/subletting
    8. Termination/cancellation rights
    9. Unreasonable burdens on landlord
    10. Exculpation
    11. Concessions to creditworthy tenants
  2. Reviewing ground leases
    1. Borrower as ground tenant
    2. Borrower as fee owner and ground lessor
  3. Lender protections: lease subordination issues
    1. SNDA agreements
    2. Estoppel certificates
  4. Special servicers issues

Benefits

The panel will review these and other key issues:

  • Key lease provisions of greatest importance to lenders for income producing commercial real estate
  • Leasehold mortgagee protections for the lender in leasehold financing
  • The lender’s perspective regarding SNDA agreements and determining if they adequately protect the future rental stream of the property

Faculty

Iryna Lomaga Carey
Iryna Lomaga Carey

Partner
Kurzman Eisenberg Corbin & Lever

Ms. Carey’s practice focuses on commercial real estate transactions including: commercial sales and...  |  Read More

Hayhurst, Ren
Ren R. Hayhurst

Partner
Bryan Cave

Mr. Hayhurst's practice focuses on all aspects of lender representation, including real estate and commercial...  |  Read More

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