What does "subordination" refer to in lease agreements?

Subordination in lease agreements refers to the arrangement where a lease is ranked lower in priority compared to other claims or liens against the property. This is often relevant in scenarios involving financing or refinancing, where a lender requires that their mortgage has priority over existing leases. By subordinating the lease, the leaseholder acknowledges that the lender's claim will take precedence in the event of a default or foreclosure. This ensures that the lender has the first right to repayment or ownership, which can be crucial for securing funding.

In contrast, the other options do not accurately reflect the concept of subordination. Terminating a lease early, transferring a lease, and lease renewals each deal with different aspects of lease management and agreements, but they do not involve prioritization of claims on the property like subordination.