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Non Disturbance Agreement for Ireland

Non Disturbance Agreement Template for Ireland

A Non-Disturbance Agreement under Irish law is a tripartite agreement between a lender, landlord, and tenant that provides crucial protections for commercial tenants in the event of landlord default or foreclosure. The agreement ensures that the tenant's lease rights remain intact even if the property's mortgage is foreclosed upon or the property is sold. Governed by Irish property and contract law, this document is essential in commercial real estate transactions where properties are both leased and mortgaged, providing security and continuity for business operations.

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What is a Non Disturbance Agreement?

The Non-Disturbance Agreement is a critical document in Irish commercial real estate transactions where a property is both mortgaged and leased. It becomes necessary when a commercial tenant requires assurance that their occupancy rights will be protected if their landlord defaults on their mortgage or the property is foreclosed upon. The agreement typically contains provisions detailing the relationships between the lease and the mortgage, the lender's commitments to honor the lease terms, and the specific conditions under which the tenant's rights will be preserved. This document is particularly important in Ireland's commercial property market, where it helps facilitate property financing while protecting tenant interests, thereby supporting stable commercial leasing arrangements.

What sections should be included in a Non Disturbance Agreement?

1. Parties: Identifies and defines the three main parties: Lender, Landlord, and Tenant

2. Background: Recites the existing lease arrangement, the mortgage/charge, and the purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement, including Property, Lease, Mortgage, etc.

4. Non-Disturbance Covenant: Core provision where Lender agrees not to disturb Tenant's possession upon enforcement of security

5. Recognition of Lease: Lender's acknowledgment of the Lease and agreement to be bound by its terms upon taking possession

6. Tenant's Obligations: Confirms Tenant's continued obligations under the Lease and any additional requirements

7. Notice Requirements: Procedures for serving notices between parties, particularly regarding enforcement actions

8. Governing Law and Jurisdiction: Specifies Irish law as governing law and Irish courts' jurisdiction

What sections are optional to include in a Non Disturbance Agreement?

1. Attornment: Used when requiring the Tenant to formally recognize the Lender as their new landlord upon enforcement

2. Mortgage Modifications: Include when parties want to address potential future modifications to the mortgage

3. Insurance Provisions: Include when specific insurance arrangements need to be coordinated between parties

4. Subordination: Include when the agreement also includes subordination provisions (making it a SNDA)

5. Assignment and Succession: Include when specific rules for transfer of rights need to be established

6. Cure Rights: Include when giving Lender rights to cure Landlord defaults under the Lease

What schedules should be included in a Non Disturbance Agreement?

1. Schedule 1 - Property Description: Detailed legal description of the property including any relevant plans

2. Schedule 2 - Lease Details: Key details of the existing lease including date, parties, and any variations

3. Schedule 3 - Mortgage Details: Details of the mortgage/charge including date, parties, and amount

4. Schedule 4 - Notices Provisions: Detailed contact information and addresses for service for all parties

5. Appendix A - Form of Acknowledgment: Standard form for acknowledging change in landlord upon enforcement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Ireland

Publisher

Genie AI

Cost

Free to use

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