Document background
The Real Estate Subordination Agreement is a critical document used in Indian real estate financing when multiple lenders have security interests in the same property. It becomes necessary when a property owner has multiple loans secured against the same property, or when refinancing arrangements require clear establishment of lenders' priorities. The agreement ensures legal clarity by explicitly documenting which lender's security interest takes precedence, helping prevent future disputes and facilitating orderly enforcement of security interests. This document must comply with Indian property and contract laws, including the Transfer of Property Act, Registration Act, and relevant state-specific regulations. It's particularly important in commercial real estate development, where multiple tiers of financing are common, and in restructuring scenarios where existing security arrangements need to be modified.
