Legal Question in Real Estate Law in Maine
Subordination of Lease
Subordination of Lease
Know all men by these present, that ________________ of ________________, lessee under a lease with __________________ of ________________, for good and valuable consideration, hereby agree that said lease and obligations secured thereby shall be and hereby are subordinate and junior in right to a mortgage given by ________________, a limited liability company, dated February 26, 2008 in the original pricipal amount of _________ to Joe Schmoe to be recorded herewith, to the same extent as if this mortgage had been recorded prior in time to the execution of the Lease.
Background - I have a 2 year lease. Am I on the hook for $60k if the owner forecloses?
thanks
1 Answer from Attorneys
Re: Subordination of Lease
A subordination agreement means that the lease would be considered after the mortgage in priority and in the event of a foreclosure the former owner (if that is who holds the mortgage)could evict you even if you are not in default in the lease or require you to make rent payments to it rather than the new landlord. This is not the same as obligating you to pay on the debt. If someone required you to pay on the debt in the event of a default that would be a "guaranty".
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