What is Attornment in Real Estate Lease Agreements?
Real estate transactions can get complex, especially when rental properties change hands. If you're a tenant or property owner, you might encounter the term "attornment" during a property sale or transfer. Let's clear up what this legal concept means and why it matters to you.
Attornment: The formal acknowledgment by a tenant that they accept a new property owner as their landlord following a sale or transfer of ownership. This acknowledgment transfers the tenant's obligations and loyalty from the previous landlord to the new one.
The Legal Framework of Attornment
Attornment traces its roots back to feudal times, where vassals pledged loyalty to new lords after land transfers. The concept has stuck around, though it's much simpler now. Modern attornment simply requires tenants to recognize their new landlord and continue their lease obligations.
The paperwork isn't too complicated - most lease agreements include attornment clauses right from the start. You'll typically see this as part of the standard lease language, though some properties might use separate attornment agreements. Each state handles these requirements differently, so the exact process can vary based on your location.
The Attornment Process
The process kicks off when a property sells. Here's what usually happens:
The property changes hands through a sale or transfer
The new owner sends tenants written notice of the ownership change
Tenants receive attornment documents to sign
Rent payments redirect to the new owner
This usually takes a few weeks to complete. During this time, tenants keep paying rent and following their lease terms - the only real change is who collects the checks.
SNDA Agreements and Attornment
SNDA agreements bundle three important concepts together:
Subordination: Puts the mortgage ahead of the lease
Non-disturbance: Protects tenants from eviction if the property forecloses
Attornment: Confirms the tenant will recognize the new owner
Banks love these agreements because they protect their interests while keeping good tenants in place. It's a win-win situation that makes financing smoother for everyone involved.
Common Challenges and Solutions
Sometimes things don't go smoothly. Tenants might resist signing attornment agreements, or paperwork might get lost in the shuffle. Clear communication solves most issues, but sometimes legal help becomes necessary. If you're stuck in an attornment dispute, a real estate attorney can guide you through your options.
Impact on Different Types of Leases
Commercial tenants deal with attornment most often, as these properties change hands more frequently. Residential leases might include attornment clauses, but they're usually simpler. Special use agreements, like those for retail spaces or industrial properties, might need custom attornment terms based on the property's unique features.
Protecting Your Interests
As a tenant, read your attornment documents carefully. Your basic lease rights stay the same, but you might spot opportunities to negotiate better terms. New landlords should review existing leases and make sure their attornment paperwork is in order before closing on a property.
Frequently Asked Questions
Q: Is attornment always required? A: No, but most leases include it automatically.
Q: Can a tenant refuse attornment? A: Yes, but it might violate their lease terms.
Q: How does attornment affect lease terms? A: It doesn't change your basic lease terms - just who you pay rent to.
Q: What happens without attornment? A: Legal complications could arise, making it harder to enforce the lease.
Working with Real Estate Professionals
Real estate attorneys play a key role in making attornment smooth and legal. Property managers help coordinate the practical details, like updating payment systems and contact information.
Ready to Navigate Property Transitions?
Whether you're buying, selling, or renting, attornment matters. Bellhaven Real Estate's team knows how to handle these transitions smoothly. We'll guide you through the process, protect your interests, and keep everything running smoothly. Stop by our office to discuss your property needs and learn how we can help make your next real estate transaction seamless.