Lender Considerations when GSA is a Tenant

When a lender considers foreclosure or exercising its rights to receive an assignment of the rents on a commercial property with traditional tenants, the following checklist for pre-foreclosure due diligence is fairly standard:

• Check the terms of each of the leases and the assignment of leases and rents to be certain that conditions exist for demanding payment of rent directly to the lender;
• Check the terms of any subordination, non-disturbance and attornment agreements that may exist with tenants;
• Require current estoppel certificates from each tenant to check the tenant's perspective on rent, term, options, landlord default and condition of the property, in accordance with any restrictions in the leases;