Todd E. Soloway and Bryan T. Mohler
With inflation reaching levels not seen in 40 years and interest rates on the rise, combined with reports that delinquency rates for lodging properties remain well above pre-pandemic levels, there is a persistent risk that a significant number of hotel properties will enter foreclosure in the next 12 months—especially in the face of continuing economic headwinds and the looming threat of a recession.
In this article, we examine the agreement—known as a Subordination, Non-Disturbance and Attornment Agreement (or SNDA)—typically used by hotel lenders, owners and managers to set forth their respective rights upon a foreclosure, and consider disputes that may arise when a party seeks to enforce its SNDA rights.
