A contract of subordination, dysfunction and attornment, also known as «SNDA», embodies three basic agreements that identify and define the relationship between a creditor and a tenant in the context of a mortgaged property lease of which the debtor is the lessor. The part of the «subordination» of the contract alters the priority interests of the parties to the agreement, z.B. by the tenant`s acceptance of a mortgaged property whose lease preceded the lease to accept a junior priority for the mortgage, so that the lender`s lender can terminate that lease in the event of forced execution. The «non-disruptive» element of the SNDA is a creditor`s agreement that, when the creditor or other purchasers, upon the execution of the lease, take over the ownership of the property subject to the lease agreement, the creditor or purchaser does not disturb the tenant`s right of ownership, unless the tenant is in default under the lease agreement. The «Attornment» element of the SNDA requires the tenant to recognize the creditor or buyer as a new owner in the event of forced execution. As a general rule, the tenant only accepts the non-disruption (sometimes called «right to silent enjoyment») of his lease, as noted above. In the context of an SNDA, for example, a creditor who is the dominant bidder in a forced sale of a property on which the creditor has a mortgage right agrees, after a default of the debtor/lessor, not to disturb the tenant`s possession in his or her dud as long as the tenant is not in default and the tenant agrees to recognize and treat the creditor or landlord. The Uniform Trade Code («UCC») is one of the uniform legal acts developed to harmonize sales and other commercial and commercial transactions in the United States. Section 9 of the UCC regulates the creation, perfection and priority of the security interests of a creditor, also designated as an insured party, in the personal property of a debtor, including the arrangements. Like a mortgage pledge, a securities interest is a right to property of a debtor who ensures the payment or performance of an obligation based on a separate guarantee contract or by additional conditions in the mortgage or trust deed. However, in order for the rights of the insured party to be applied to third parties, the insured party must «perfect» the interest of security.
Perfection is generally achieved by filing a document called a «financing statement» with a government authority, usually the county scribe in which the property is located (the debt guarantee) and the secretary of state in which the debtor company is incorporated, subject to a set of rules applicable to individuals and certain types of corporate debtors.