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The Subordination Clause A subordination is a contractual agreement by the tenant that its leasehold interest in the collateral property, or portion thereof (the subject property of the lease), is subordinate either to the mortgage or to the lien of the mortgage.
Subordination agreements are used to legally establish the order in which debts are to be repaid in the event of a foreclosure or bankruptcy. In return for the agreement, the lender with the subordinated debt will be compensated in some manner for the additional risk.
What is a mortgage subordination? When a mortgage holder subordinates a mortgage to a conservation easement, they agree to allow the easement to be first in the chain of title, so that in the event of a foreclosure, the easement survives intact.
The Subordination Clause. A subordination clause is a lease provision whereby the tenant subordinates its possessory interest in the leased premises to a third-party lender, usually a bank (the rights of the tenant are thus subject to the rights of the lender).
The Subordination Clause. A subordination clause is a lease provision whereby the tenant subordinates its possessory interest in the leased premises to a third-party lender, usually a bank (the rights of the tenant are thus subject to the rights of the lender).
Subordination of lease refers to the tenant's consent to subordinate his or her rights over a property to the rights of the bank holding the mortgage on the property. A subordination of lease agreement is created for this purpose.
What is subordination? Subordination is the process of ranking home loans (mortgage, HELOC or home equity loan) by order of importance. When you have a home equity line of credit, for example, you actually have two loans ? your mortgage and HELOC. Both are secured by the collateral in your home at the same time.
An agreement by which one encumbrance (for example, a mortgage) is made subject (junior) to another encumbrance. To "subordinate" is to "make subject to," or to make of lower priority.