WHAT IS AN ESTOPPEL CERTIFICATE? | WHAT IS AN ESTOPPEL AGREEMENT?
An Estoppel Certificate or Estoppel Agreement is a document intended to certify that certain statements of fact are correct as of the date of the document and can be relied upon by a third party, such as a prospective lender or purchaser of the property.
In the context of a lease, an Estoppel Certificate or Agreement would include a statement by a tenant identifying that the lease is valid and in effect and certifying that no rent has been prepaid that has not been accounted for and that there are no known outstanding defaults by the landlord (except those specified).
An Estoppel provides for both the tenant and landlord to notify the prospective lender or purchaser (or other third party) of any issues, unkept promises, or conflicts between the tenant and the landlord, or any disputes with the lease or even a verbal disagreement between the landlord and tenant, that may be pending or that are in dispute, so that the prospective lender or purchaser can be apprised of issues or concerns they may not have otherwise found out prior to executing a new loan or purchasing the property.
Most leases provide a detailed requirement for the tenant to cooperate with the landlord in the event an Estoppel Certificate or Estoppel Agreement is requested by the landlord’s current or proposed new lender
or from a prospective buyer of the property. An Estoppel is a legal document and should be reviewed accordingly.