A mezzanine intercreditor agreement governs the relationship between senior and mezz lenders. It defines mezz cure rights on senior defaults, standstill periods on mezz remedies, replacement-guarantor mechanics following mezz foreclosure , and senior consent for transfers. CMBS deals use a largely standardized form; balance-sheet deals are negotiated.
What rights does the mezz lender get?
The right to receive notices of senior default, the right to cure monetary and non-monetary defaults within stated cure periods, and the right to foreclose on the equity collateral and step into ownership of the SPE, provided the mezz lender (or its designee) qualifies as a replacement guarantor for any nonrecourse carve-outs.
What constraints does the senior impose?
Standstill: the mezz lender cannot exercise remedies during a defined cure window. Approval rights over the replacement guarantor and over any modification of the mezz loan that affects senior. Transfer restrictions on the mezz loan. Subordination of mezz cash flow inside the property cash-management waterfall.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Financial Stability Report · Board of Governors of the Federal Reserve System · 2025-11