Document background
A Lease Subordination Agreement is essential in Australian commercial property transactions where there are competing interests between tenants and lenders over the same property. This document is typically required when a property owner has both a tenant and a mortgage or is seeking new financing on a property that is already leased. The agreement clarifies the priority of rights, with the tenant typically agreeing to subordinate their leasehold interest to the lender's security interest. It becomes particularly important in refinancing situations or when new leases are being established on mortgaged property. The document addresses key aspects such as the tenant's continued occupation rights, the lender's enforcement rights, and the obligations of all parties involved. In the Australian legal context, these agreements must comply with state-specific property laws and registration requirements, particularly under the Torrens Title system.
