subordination, whereby the tenant agrees that the lease will be junior to the lien of the mortgage; attornment, whereby the tenant agrees to recognize the lender as its new landlord after the sale and will continue to pay rent and honor its obligations under the lease; non-disturbance, whereby the lender agrees not to terminate the lease or disturb tenant's physical occupancy and possession of the premises)
Case studies of other real estate lawyers that have had success updating and negotiating subordination, non-disturbance, and attornment agreements that are advantageous to their clients, what worked best for them, and important lessons learned
Further, the Court of Appeal considered in some detail the issue of attornment in the presence of a forum selection clause.
In dismissing the appeal, the Supreme Court of Canada chose to overlook the challenging aspects of the case that had been addressed by the Court of Appeal, preferring to reaffirm its position favouring party autonomy in very general terms without providing any true guidance for future cases on the exact contours of the strong cause test or the practical conditions for establishing attornment.
The article then turns to a consideration of attornment in the face of a forum selection clause.
This point will be further elaborated upon below when we discuss attornment and recent appellate jurisprudence, including the latest Supreme Court of Canada decision in Momentous.
THE EFFECT OF ATTORNMENT OR THE TIMING OF THE REQUEST TO STAY THE PROCEEDINGS
Attornment or submission has been called the "least controversial basis for jurisdiction", (93) and the courts clearly recognize it as sufficient to establish jurisdiction.
In Quebec, the CCQ specifically provides for jurisdiction based on attornment or submission, (98) as does the CJPTA in article 3(b).
In addition to its jurisprudence on the scope of the strong-cause exception, the Ontario Court of Appeal embarked on a surprising interpretation of the consequences of attornment on the enforcement of a forum selection clause.
Where this occurs, the Sublandlord will likely have entered into a subordination, non-disturbance and attornment
agreement ("SNDA") with the fee lender to ensure that a foreclosure of the fee mortgage does not extinguish the ground lease.