SNDAs and Estoppels — the Two Letters That Protect Everyone

Two documents surface in every financed net lease purchase, usually explained badly at the closing table. Both exist to make paper promises verifiable across parties who haven’t met.

The estoppel certificate

The tenant’s sworn snapshot of the lease: rent amount and paid-through date, term and options, no defaults claimed by either side, no unwritten amendments or side deals. For a buyer it’s the single most protective diligence document — the tenant confirming in writing that the deal you underwrote is the deal that exists. Read it against the lease line by line: mismatches (an amendment the seller forgot, a disputed CAM charge, an exercised option) surface here or nowhere. Leases obligate tenants to deliver estoppels within set windows; corporate tenants produce clean ones routinely, and a tenant’s reluctance or heavy edits is diligence data all by itself.

The SNDA

Subordination, Non-Disturbance, and Attornment — the three-way treaty among tenant, landlord, and lender. The tenant subordinates its lease to the mortgage; the lender promises non-disturbance (a foreclosure won’t evict a performing tenant); the tenant agrees to attorn (recognize whoever ends up owning as landlord). Lenders require it to control their collateral; strong tenants require the non-disturbance half before agreeing to subordinate. For buyers, the SNDA matters most as friction: national tenants negotiate them on their own forms at their own pace — start the request early or watch it become the closing’s long pole.

Practical sequencing

Order estoppels and SNDAs the day diligence opens, not the week the lender asks; track lease-specified delivery windows; and treat both documents as underwriting evidence, not formalities. In 1031 timelines especially, the paperwork’s pace is part of the deal’s pace.