Oregon Lease Subordination Agreement
Understanding this form
The Lease Subordination Agreement is a legal document that allows a lienholder, typically a mortgage lender, to subordinate their existing lien on a property to a mineral, oil, or gas lease. This means that the rights under the lease will take precedence over the lien. This form is essential for property owners looking to engage in oil or gas leasing while managing existing loans, as it ensures that the leasehold estate is free from prior liens. Unlike other agreements, this document specifically addresses the subordination of liens in relation to mineral leases, making it unique in its application.
Form components explained
- State and County: The state and county where the agreement is executed.
- Lessor, Lienholder, and Lessee: Identification of the involved parties.
- Effective Date: The date when the agreement becomes effective.
- Description of Lands: Specific details of the property affected by the mortgage or deed of trust.
- Subordination Terms: Clear terms regarding the subordination of the mortgage lien to the lease.
- Signature and Acknowledgment: Required signatures from the lienholder to finalize the agreement.
When to use this form
This Lease Subordination Agreement is necessary when a property owner wants to lease land for mineral, oil, or gas extraction while an existing mortgage or deed of trust is in place. For example, if a property owner wishes to secure funding for home improvements and also seeks to lease the land for oil drilling, this agreement ensures the lease is recognized above the mortgage. It becomes particularly important when new financing is needed, allowing the property owner to maintain the ability to generate income from the lease.
Who this form is for
- Property owners who wish to lease land for mineral, oil, or gas extraction.
- Lienholders or mortgage lenders seeking to formalize the subordination of their loan to a lease.
- Lessee entities interested in securing a lease on lands already encumbered by a mortgage.
How to prepare this document
- Identify the parties involved, including the lessor, lienholder, and lessee.
- Specify the state and county where the agreement is being executed.
- Enter the effective date of the agreement.
- Provide a detailed description of the lands covered by the mortgage or deed of trust.
- Ensure that all parties sign the document to validate the agreement.
Notarization guidance
Notarization is required for this form to take effect. Our online notarization service, powered by Notarize, lets you verify and sign documents remotely through an encrypted video session, available 24/7.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to properly identify all parties involved in the agreement.
- Leaving out the effective date or the description of the lands.
- Not obtaining all required signatures.
Why use this form online
- Convenience of downloading and completing the form at your own pace.
- Editability to tailor the document to specific circumstances.
- Reliability of having a template drafted by licensed attorneys who understand legal requirements.
Legal use & context
- This form ensures that all parties understand the hierarchy of claims on the property.
- Subordination is a common practice in real estate financing and leasing, allowing property owners to maximize their land's use.
- It may be necessary for lenders to accept lower priority in order to allow lessees to proceed with their leases.
Summary of main points
- The Lease Subordination Agreement clarifies the relationship between existing liens and mineral leases.
- This document is essential for property owners looking to lease land while managing prior debts.
- Proper completion and signing of the form ensures legal protection and clarity among all parties.
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FAQ
And many lenders charge a fee to review the subordination package, a fee that might run as high as $100. Your lender will probably pass this fee to you.
Despite its technical-sounding name, the subordination agreement has one simple purpose. It assigns your new mortgage to first lien position, making it possible to refinance with a home equity loan or line of credit. Signing your agreement is a positive step forward in your refinancing journey.
An SNDA is an agreement entered into between a tenant and the lender of the landlord (and, ideally, the landlord) to establish the relationship between the tenant and lender (who would not otherwise have a direct relationship) and provide relative priorities between them.
But as property values are going up and the demand for refinance isn't as much, it seems that the subordination process has gotten a little easier. Typically, it takes two to three weeks to get the resubordination paperwork through, and it is likely to set you back $200 to $300.
Subordination is the tenant's agreement that its interest under the lease will be subordinate to that of the lender.Attornment is the tenant's agreement to become the tenant of someone other than the original landlord and who has now taken title to the property.
A subordination agreement prioritizes collateralized debts, ranking one behind another for purposes of collecting repayment from a debtor in the event of foreclosure or bankruptcy. A second-in-line creditor collects only when and if the priority creditor has been fully paid.
Estoppels and SNDAs are usually initiated by the lender; however, well written documents serve the interest of the tenant just as well. An estoppel certificate is a certification from a landlord and a tenant that outlines the terms and conditions of the lease.
A lender typically wants to have an SNDA because of its subordination clause if, in the absence of such an agreement, the lease would be prior to the mortgage.Therefore, if a mortgage is senior to a lease, the foreclosure of the mortgage will terminate the lease unless there is an agreement that provides otherwise.
Subordination clauses in mortgages refer to the portion of your agreement with the mortgage company that says their lien takes precedence over any other liens you may have on your property.The primary lien on a house is usually a mortgage. However, it's also possible to have other liens.
