Glossary

Non-Disturbance Clause

Also known as: non-disturbance agreement, NDA (lease)

The provision within an SNDA, or occasionally a standalone agreement, under which a lender or ground lessor agrees not to terminate or disturb a tenant's lease and possession upon foreclosure or termination of a superior interest, provided the tenant is not in default.

Non-disturbance is the tenant-protective counterpart to subordination: tenants making significant TI investment, or anchor and large-footprint tenants generally, will often refuse to subordinate their lease to a mortgage or ground lease without a corresponding non-disturbance commitment from the superior interest holder. Without this protection, a tenant in good standing under its own lease could still lose its space, and its unamortized improvement investment, purely because the landlord defaulted on an unrelated mortgage obligation. Sophisticated tenants increasingly make delivery of an acceptable non-disturbance agreement a condition precedent to signing the lease itself, particularly for ground-floor retail and large office users with substantial build-out at stake.