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December 01, 2018

Attornment


Word of the day

Attornment

The act of a tenant formally agreeing to become the tenant of a successor landlord; as in attorning to a mortgagee who has foreclosed on the leased premises. Attornment establishes a new tenancy, with the mortgagee being the landlord, and acts as a defense against the defaulting mortgagor’s claim for rent.

In a long-term lease situation, an attornment agreement is typically entered into by a sublessee with a fee owner of the land and a mortgagee holding a mortgage on the fee or on the master leasehold estate. The sublessee seeks to protect his estate from destruction by reason of the premature termination of the master leasehold or from loss by reason of the foreclosure of the mortgage when the sublessor defaults. The attornment agreement provides that, in the event of termination or foreclosure, the sublease will continue, just as though the owner or the mortgagee were the lessor in a lease with the sublessee for a term equal to the unexpired term of the sublease, and upon the same terms and provisions.

 

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