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Posts: 1
Reply with quote  #1 

My name is Jason and I am a fairly new landlord (about 3 years now) and I just picked up my third property. I found a tenant did all the credit/background checks and things were looking good. I sent my prospective tenant a sample of the lease agreement and he sent back a few change requests which was very minor and I have no issues with making those changes.

However, there is a change he wants to add to the subordination provision which I am not sure I want to make. Here is what is says in my lease agreement.

This Lease Agreement is subject and subordinate to any mortgage, financing, loans, deed of trust, or right to possession with regards to the building or land that the Landlord is obligated to now or in the future including existing and future financing, and/or loans or liens on the building and land.

What the Tenant wants to add:

It is further understood that, it’s sole election, Landlord may enter into any financing arrangement involving the subject property it deems appropriate. However Landlord agrees that any such financing agreement would not add, delete, or modify any terms under the Lease without the written consent of Tenant

I am not sure if I am comfortable with this addition. Reading it leads me to believe that it would require a tenant’s written approval and grant a tenant power to affect financial decisions regarding my property. Am I reading this correctly?

I am new to this forum and just looking for advise. I apologize if this topic was covered already in another post.

Thank You,

FYI: The property and I are in California if that makes any difference.

Posts: 3,809
Reply with quote  #2 
Both clauses are unnecessary.  Per law, the property is always subject to liens.  Ask any tenant who was in a property that was foreclosed.  The bank still took possession of the property.  However, that does not mean the tenant does not have rights.  He then wants to protect those rights.

Since you have that clause in there, the tenant wants to add a clause that is also covered under law.  Leases cannot be changed without the written permission of the tenant.  Once signed, no material clause of a lease may be changed until the lease ends.  Once it ends and a tenant becomes month to month, terms may be changed.

Eliminate both clauses and explain to the tenant that both are covered by law.
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