Document background
The Landlord Subordination Agreement is a critical document in Canadian commercial real estate financing, used when a tenant requires financing and the lender needs priority over the landlord's rights in the property. This agreement is particularly important in scenarios where a commercial tenant seeks to use their leasehold interest as collateral for financing, or when a lender requires additional security for their loan. The document establishes the priority of competing interests in the property, addresses notice requirements, and outlines the parties' respective rights and obligations. It must comply with both federal legislation and provincial property laws, which can vary by jurisdiction. The agreement typically includes detailed property descriptions, lease information, and specific subordination terms. It's commonly used in commercial property developments, retail locations, industrial facilities, and other business premises where significant tenant improvements or equipment financing is required.
