Document background
The Lease Subordination Agreement is a critical document in German real estate financing and leasing transactions, particularly when property owners seek to obtain or refinance mortgage loans while having existing tenants. This agreement becomes necessary when a lender requires assurance that their security interest in the property takes priority over any leasehold interests. Under German law, the agreement must carefully balance the rights of all parties involved while complying with strict property law requirements. The document typically includes provisions for subordination, non-disturbance, and attornment, ensuring that both the lender's security interests are protected and the tenant's occupancy rights are preserved in case of a foreclosure or similar event. The agreement must be structured in accordance with German civil law principles and property registration requirements, making it essential to have proper legal expertise in German real estate and banking law when preparing and executing this document.
