Tenant Financing and Tri-Party Agreements – Important Considerations – Part 2

This Article is a continuation of my prior one where I discussed the initial considerations to address when dealing with a tri-party agreement amongst a lender, landlord and tenant/borrower for tenant financing. Those considerations were: Where Is the Money Going: Who Is the Lender: Who Pays the Legal Costs for the Agreement: and, What Is Being Consented To:. Now I will focus on the material issues for the landlord and the lender that typically drive the negotiations.

1. What Lenders Require From Landlords:

a.  Notice of Default - The lender needs notice of lease default and an opportunity to cure it (to avoid prevent distraint or lease termination). The lender’s cure period will extend beyond the tenant cure period as the lender waits to see if the tenant will cure. If that tenant cure period expires, a landlord may still want the right to pursue the tenant for damages while the lender’s continues to cure the default and the lender may then need to find a new tenant.

For the complete article view the document below.