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Finding Your Way Around the Letter of Intent, the Letter of Credit, and the SNDA

Gain an understanding of how to craft a letter of intent that facilitates the negotiation of the lease and the key terms that should be included.

Gain a working understanding of what goes into properly documenting a letter of intent in lease transactions. You will learn about two agreements generally referred to in letters of intent, the bank letter of credit and the SNDA. Join experts Manuel Fishman and Margaret Duskin for a discussion on how landlords and tenants document these lease-related agreements and review how the pandemic has impacted the letter of intent process.

90 minutes
Course Exam
Certificate of Completion
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Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Introduction

  • What Ties These Three Documents Together?
  • Contract Terms, Credit Support, and Priority

Letters of Intent

  • Purpose and Timing
    • Meeting of the Minds
    • Allows a Tenant to Compare Deals Side by Side and Allows the Landlord to Begin Financial Modeling
    • Provides Direction to Legal Counsel
    • Sets Tone for Negotiations and Guides Business Teams on Unique or NonStandard Terms
  • Binding Versus Non-Binding
    • Review NonBinding Language and Importance of Maintaining Optionality
    • Review Case Law and Lessons Learned From Bad Drafting
  • Key Terms to Include in a Letter of Intent
    • Name of Tenant, Rent, Term, Condition of Premises Upon Delivery and Buildout Obligations/Allowances, PassThrough Charges Net, Gross, Hybrid
    • Letter of Credit, Guaranty, and SNDA
    • Review Other Terms to Consider Including
    • Retail, Industrial, and Other Unique Properties
  • Lessons Learned From COVID-19
    • Insurance Provision Updates/Increased Coverage
    • Address Governmental Restrictions to Access
    • Rent Abatement Structures Create a Formula
    • Delays in Delivery/Commencement Date Impact
  • Broker Disclosures
    • State Required Disclosures
    • Dual Agency
    • Disclosure That Brokers Are Not Experts in Various Areas Requiring Consultants

Letters of Credit

  • What Is a Letter of Credit?
    • An Irrevocable Contract That Is Strictly Construed Based on Its Written Terms and Governed by Certain Industry Developed Protocols and a Stated Jurisdiction's Laws
    • Understanding the Terms: Applicant, Issuer, Beneficiary
    • UPC 600 and ISP98, and Interaction With the UCC
    • Selecting a Controlling Jurisdiction in the Event of Conflict
  • What Does a Letter of Credit Say?
    • Essential Terms
    • Fixed Term and Evergreen Provisions
    • What Is Required to Draw Upon a Letter of Credit?
  • Advantages and Disadvantages of Using a Letter of Credit
    • For Landlord Bankruptcy Protection vs. Defective Presentation
    • For Tenant Preserve Use of Funds vs. Cost and Annual Compliance
    • Qualifying the Issuing Bank
  • Reductions and Renewals
    • Pitfalls of Automatic Reductions
  • Bank Charges for Transfers and Other Actions

Subordination Non-Disturbance and Attornment (SNDA)

  • The Agreement Establishes the Legal Priority and Rights Between the Landlord's Lender and the Tenant If the Landlord Defaults Under the Stated Loan
  • As the Name Applies, the Agreement Deals With Three Contractual Commitments: Subordination, Non-Disturbance, and Attornment
    • Why Is Document Needed?
    • Often, SNDA Also Includes Covenant of Tenant to Pay Rent to Lender Upon Notice of Landlords Default Under Loan
  • Key Provisions for a Lender
    • Lender NonLiability/Exculpation for Prior Landlord Default
    • Lender Right to Insurance Proceeds and Condemnation Award
    • Amendments to the Lease Without Lender's Consent (but See Below)
    • Lender Cure Rights (but See Below)
  • Key Provisions for a Tenant
    • Amendments to the Lease Without Lender's Consent
    • Lender Cure Rights (Setting an Outside Date)
    • Assignment and Subletting Provisions of the Lease Control
    • Conditioning NonDisturbance on No Default Under the Lease
    • Consider Improvement Allowances and MidTerm Concessions
  • Review Case Law
  • Record or Not to Record
  • Timing of Delivery and Lender Charges - What to Say in the Lease
  • Relationship to Sublease Recognition Agreement
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

Applications have not yet been submitted for Delaware, Idaho, Kentucky, Maine, Ohio, Oklahoma, South Carolina, and Wyoming CLE for this course. However, if you are interested in obtaining CLE for any of the listed states or have any additional credit questions please email us at [email protected] or call us at 866-352-9540.

This course was last revised on January 13, 2022.

Call 1-866-352-9540 for further credit information.

  • AK CLE 1.5
     
  • Alaska attorneys may receive 1.5 hours of continuing legal education for completing this program. Please contact the Alaska Bar Association or go to www.alaskabar.org for details regarding reciprocity with other states.
     
  • AL CLE 1.5
     
  • This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.5 hours credit.
     
  • AR CLE 1.5
     
  • This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
     
  • Arizona CLE 1.5
     
  • The Arizona State Bar does not pre-approve or pre-certify MCLE programs. However, records of this program and attendance will be maintained by Lorman Education Services for auditing purposes. This activity may qualify for up to 1.5 hours toward your annual CLE requirement for the State Bar of Arizona.
     
  • CA MCLE 1.5
     
  • Lorman Business Center, LLC. is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
     
  • CT CLE 1.5
     
  • Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
     
  • HI CLE 1.5
     
  • This program was approved by the Hawaii State Board of Continuing Legal Education for 1.5 CLE credit hours.
     
  • IL CLE 1.5
     
  • This course was approved for a total of 1.5 hours of MCLE Credit by the Illinois MCLE Board.
     
  • ND CLE 1.5
     
  • North Dakota CLE policy does not allow for pre-approval of any self-study courses. This course may qualify for up to 1.5 hours of CLE credit.
     
  • NH MCLE 1.5
     
  • NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this Ondemand course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 90 Minutes.
     
  • NJ CLE 1.8
     
  • This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 1.8 hours of total CLE credit.
     
  • NY CLE 1.5 including Areas of Professional Practice 1.5
     
  • This course has been approved in accordance with the requirements of the New York Continuing Legal Education Board for up to a maximum of 1.5 credit hours in the area(s) of Areas of Professional Practice for 1.50 hours. Each hour may be counted only as satisfying one category of credit. Duplicate credit for the same hour of instruction is not permitted. This course qualifies for both established and newly admitted attorneys. Lorman Business Center, LLC. has a financial hardship guideline. Please contact customer service at 1.866.352.9539 for instructions on how to apply.
     
  • PA CLE 1.5
     
  • This Distance Learning program has been approved by the Pennsylvania Continuing Legal Education Board for 1.5 hours of substantive law, practice and procedure CLE credit.
     
  • RI CLE 1.5
     
  • This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 1.5 hours of CLE credit.
     
  • VT CLE 1.5
     
  • This self-study program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hour(s) of CLE credit. Please note: Attorneys may only claim 12 credits per compliance period in this format. This course is considered "Non-Moderated Programming without Interactivity".
     
  • WA CLE 1.5
     
  • This program has been approved by the Washington State Board of Continuing Legal Education for 1.5 hours of A/V credit under the Law & Legal Procedure category.
     
  • WI CLE 1.5
     
  • This program qualifies for 1.5 hour(s) of ondemand CLE through the WI Board of Bar Examiners.
     
  • WV MCLE 1.8
     
  • This program has been approved by the West Virginia State Bar MCLE Commission for 1.8 MCLE hours.
     
The CLE Code is ONLY a requirement when applying for CLE Credit in New York. Other states do not need to supply the CLE Code to apply for CLE credit.

To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

MP3 Download

  • Arizona CLE 1.5
     
  • CA MCLE 1.5
     
  • CT CLE 1.5
     
  • HI CLE 1.5
     
  • NJ CLE 1.8
     
  • NY CLE 1.5 including Areas of Professional Practice 1.5
     
  • VT CLE 1.5
     
  • WA CLE 1.5
     
  • WV MCLE 1.8
     
The CLE Code is ONLY a requirement when applying for CLE Credit in California (for participatory credit), Kansas, New Jersey or New York. Other states do not need to supply the CLE Code to apply for CLE credit.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Margaret R. Duskin, LEED GA

Margaret R. Duskin, LEED GA

Cushman & Wakefield of California, Inc.

  • Executive Director with Cushman & Wakefield in San Francisco, one of the world’s key office property markets
  • Was recruited to Cushman & Wakefield in 1998, from the Ernst & Young Real Estate Consulting Group
  • Recognized as a market leader in office leasing and sales
  • Sold or leased over 10 million square feet of office and retail property
  • Real estate career includes commercial property brokerage, corporate consulting, and advisory services
  • President of a regional brokerage firm (eight offices in Northern California)
  • With this diverse experience, works with clients on a higher level of business challenges and creative solutions; applies an insightful, consultative approach based on real-life acumen
  • Understands management goals, budgets, HR, and governance issues
  • Specializes in complex deal structures, advanced lease negotiations, and corporate strategic planning
  • Known for expert communication skills, achieving client’s commercial property goals through visioning, strategic planning and financial analyses, and teamwork
  • Focus is tenants, particularly law firms; venture capital and advisory; corporate clients, plus health care
  • Investment experience is extensive and varied
  • Experienced as 15+ years of landlord representation
  • Sophisticated knowledge of what buyers/owners/ landlords want to achieve in cap values, ROI’s and leasing
Manuel Fishman, Esq.

Manuel Fishman, Esq.

Buchalter Nemer

  • Shareholder with Buchalter Nemer
  • Focuses practice on representing real estate developers and owners in the acquisition, sale, and financing of commercial properties
  • Active leasing practice representing owners of several major office buildings in San Francisco, including the Transamerica Pyramid, as well as tenants in lease and sublease transactions
  • Expertise includes letters of intent, tenant improvement work agreements, security deposits/letters of credit, signage rights, expansion and contraction rights, permitted transfers, operating expense audits, and lender and master landlord recognition agreements and extensive experience in the area of ground leasing and retail leasing
  • Leading attorney in the area of landline and wireless communications and Internet-based services in commercial properties and rooftop installations
  • 2020 Best Lawyer in America in real estate law, an honor he has received since 2007; 2014 Top Rated Lawyer by American Lawyer Media, 2012-2018; one of Bay Area Magazine’s Top Lawyers in the Bay Area; and recipient of the 2019 Raymond C. Nann Distinguished Service Award
  • Frequent lecturer on office and shopping center leasing matters and frequently writes for industry newsletters
  • J.D. degree, magna cum laude, Santa Clara University School of Law; B.A. degree, State University of New York at Purchase
  • Can be contacted at 415-227-3504 or [email protected]
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Product ID: 408652
Published 2022
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