Common Contracts
1 similar Tri-Party Agreement contracts
Current Issues in the Negotiation of Hotel Tri-Party Agreements – 2008Tri-Party Agreement • August 26th, 2020
For first-time hotel developers accustomed to office or retail projects, it may seem unsurprising that a draft management agreement requires that the owner and any future mortgage lender be obligated to enter into a three-party “Subordination and Non-disturbance Agreement” or “Recognition Agreement” with the management company. This type of agreement, as described in a typical draft management agreement presented by a brand management company, provides that the management company agrees to “subordinate” and “attorn” to the lender upon its acquisition of the hotel through default or foreclosure. The lender in turn is obligated not to “disturb” the management company unless it is in default of its obligations under the management agreement. In terminology and outline, the agreement seems very much like a subordination and non-disturbance agreement or SNDA entered into with a valuable tenant. In practical effect and its role in the value of the hotel, however, the hotel three-party agreem
