What Is an SNDA Agreement and Why It Matters More Than You Think

Don’t Let a Foreclosure Evict Your Project

When you’re building a utility-scale renewable project, land control is your foundation. But once financing enters the picture, lenders want more than a signed lease—they want guarantees. That’s where the SNDA agreement becomes mission-critical.

Short for Subordination, Non-Disturbance, and Attornment, the SNDA protects your right to stay on the land — even if the property gets tangled in someone else’s financial trouble.

What’s in an SNDA — and Why It Matters

An SNDA is a tri-party agreement between you (the developer/tenant), the landowner (your landlord), and the lender (usually the landowner’s mortgage holder).

Here’s how each piece works:

• Subordination You agree your lease is secondary to the lender’s mortgage. If there’s a foreclosure, the lender’s interests take precedence.
• Non-Disturbance The lender promises not to disturb your lease—even in foreclosure. This protects your project and lets it keep operating.
• Attornment You agree to recognize the lender (or whoever takes over) as your new landlord if the land changes hands.

In short: an SNDA ensures your lease — and your project — survives a foreclosure.

Why It’s Critical for Renewable Projects

Lenders and buyers expect clear, uninterrupted rights. If your lease could be wiped out by a landowner’s default, your project becomes a financing nightmare.

Without an SNDA, you could face:

🚫 Loss of site control

💸 Financing delays or denials

❌ Failed sales or acquisitions

That’s not just a paperwork problem — it’s a project risk.

When to Secure an SNDA

The earlier, the better. Ideally, start the SNDA process when you’re finalizing your lease.

Delaying it until financing or sale can lead to:

• Bottlenecks
• Legal hurdles
• Missed deadlines

If the property already has a mortgage, get lender contact info upfront. If a mortgage is added later, make SNDA part of your tracking process.

Developer Best Practices for SNDA Agreements

✅ Check for Existing Mortgages Early Include it in your title review and site control checklist.

✅ Include SNDA Language in Your Lease Make it clear that securing an SNDA is part of the deal — not an afterthought.

✅ Engage Legal Support Work with attorneys who understand renewables and lender concerns. Every detail matters.

✅ Keep It Buyer-Ready Organize your signed SNDA in your diligence folders for lenders, title agents, and buyers.

What you build is important — but what survives is essential.

An SNDA agreement isn’t just legal insurance. It’s your backup plan for long-term project stability and financing success.

Ready to secure your project from the ground up? Let TerraPro Solutions help.

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