"Attorn" means to acknowledge or accept a transfer of something. The origin of attorn is in English feudal history. It described the act of a vassal or tenant of an estate transferring his allegiance to the new lord. In its modern legal sense, it describes the situation where a person agrees to remain a tenant after the owner sells or transfers title of the leased premises to a new owner.
An attornment agreement is the written acknowledgement of a tenant that he will remain in the leased premises under a new owner according to the original terms of the lease. Sometimes the agreement is a provision of the lease itself. Other times, such as when the owner uses the property as security for a loan, it may be a separate agreement required of the owner and tenant by the lender. In modern usage, attorn is a mutual acceptance. The tenant acknowledges the rights of the new owner in the lease, and the new owner acknowledges those of the tenant.
Subtenants can also use attornment agreements. A tenant may transfer his rights under a lease to a subtenant, who then occupies the premises. Usually a sublease requires the subtenant to pay rent to the tenant, who then pays the owner. If the tenant defaults on the lease or fails to pay rent, the owner can terminate the lease. If this happens, the sublease is terminated as well, and the subtenant has no right to live in the premises.
The subtenant can obtain an attornment letter from the owner. The letter provides that if the tenant defaults on the lease obligations, the owner will give written notice to the subtenant. The subtenant then has the option of paying any arrears to the owner. If the subtenant cures the default, he then assumes the position of a tenant under the lease.
Another form of attorn is the subordination, non-disturbance, and attornment (SNDA) agreement. SNDA agreements are used when the owner has encumbered the leased property by taking out a loan against the property or is still paying the original lender. In many states, foreclosure on a property terminates all rights in the property, including leases. SNDA agreements address the priority of rights between lenders and tenants.
Under an SNDA, the tenant is allowed to stay in the premises if the owner defaults. The subordination terms of the agreement mean that the lender’s claims against the owner must be paid by the owner before any claims of the tenant against the owner are satisfied. Non-disturbance terms provide that the tenant’s rights under the lease are preserved. The tenant must agree to continue his obligations under the lease when a new owner takes over the property.
