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Understanding the Estoppel Certificate

Tenants, take the time to verify the facts in your lease agreement if your landlord asks you to sign an estoppel certificate, or it might come back to haunt you.

With the commercial real estate market rebounding, and building sales and refinancing on the rise, tenants are seeing an increase in estoppel certificate requests.

At some point during your lease term, it is inevitable that your landlord will send a request asking you to execute an estoppel certificate. For most tenants, the request for an estoppel comes as a surprise as it is a legal document and the landlord is likely asking for a turnaround of 10 days. So what is an estoppel certificate? Are you really required to drop everything and give this document your full attention? And should you take this opportunity to negotiate a better lease?

These are all good questions, which are asked by business owners everyday. Handled correctly, an estoppel certificate can protect your interest in the lease. On the other hand, a poorly drafted and executed estoppel can come back and hurt you down the road.

What Is an Estoppel Certificate?

An estoppel certificate is a confirmation from the tenant that the facts presented are accurate and complete at that moment in time. This request is typically triggered by the refinance or sale of the property, and it might include the following information:

  • A list of the documents that make up the tenant’s lease agreement.
  • A confirmation of rent and expenses currently being paid and verification that there are no past due or prepaid amounts.
  • A statement that the landlord has met all of its obligations, and is not in default of the lease.

The estoppel certificate’s purpose is to provide the lender or buyer with some assurance that key documents and facts are accurate, and represent the entirety of your agreement with the landlord. The bottom line is that the lender or potential buyer does not want to get surprised by a claim or obligation that may have existed at the time the estoppel was signed.

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Do I Need to Sign it?

Most leases do require a tenant to provide the estoppel certificate upon request. Further, since the document is critical to most finance and purchase transactions, the lease will include a very short window and the risk of default if a tenant does not comply. With that said, you are not required to sign an estoppel certificate that you do not believe is accurate. If you believe the facts presented are inaccurate or incomplete, you owe it to yourself to make corrections to the document and submit to the landlord so accurate information is brought to the table.

Should I Take This Opportunity to Renegotiate My Lease?

I have had several clients ask if they can leverage the landlord’s request for an estoppel certificate to get some concessions in exchange. Unless the tenant has a legitimate gripe with the landlord, the answer is no. An estoppel is not a license to renegotiate the lease or ask for concessions. However, it is the perfect time to bring up any side agreements, disputes, or concerns you have with the landlord. I have helped many clients resolve disputes during this process, as the landlord does not want to present the potential buyer or lender with a cloudy situation.

Is There Any Risk in Signing the Estoppel?

While an estoppel is not intended to modify the lease agreement, an inaccurate or poorly written estoppel can have serious repercussions for a tenant down the road. This can occur if facts presented in the certificate are wrong or not consistent with the lease (i.e. wrong expiration date, wrong security deposit or rent amount, etc.). Another trap is confirming the landlord is in compliance with the lease, when an issue may exist of which you are unaware. For example, the landlord may be inadvertently charging you for an expense that is not permitted under the lease. If this is identified later on, the current landlord might try and use the estoppel certificate as a defense for not having to correct the issue. While the estoppel certificate doesn’t always protect the landlord in such a situation, it certainly doesn’t help your efforts to right a wrong.

What to Look For and How to Protect Yourself

1) Take the time to verify the facts.

  • Confirm the dates, rent and security deposit are correct.
  • Confirm all the documents are listed on the estoppel certificate, not just the original lease. This includes lease amendments and confirmation of lease dates if they exist.
  • Do you have any side agreements with the landlord that are not in the lease documents? If so, list them! Examples might include the use of storage space, reserved parking, conference facilities, etc. that could be taken away by your future landlord because they were unaware of the arrangements.

2) Avoid making your representations absolute. The certificate is likely to include statements such as “Landlord has met all of its obligations under the Lease”, or “Landlord is not in default of any of the terms of the Lease.” While that may appear to be the case, issues may often exist of which the tenant is unaware. For this reason, you should insert, “To Tenant’s knowledge…”

3) If you have a legitimate gripe, let the world know! Well, maybe not the world, but let the landlord know you are going to document the issue on the estoppel certificate.


While the estoppel certificate is intended to provide a potential buyer or lender with verification that they are seeing the whole picture presented by the building owner, it is also an important document that can help or hurt a tenant down the road. Depending on the size and complexity of your lease, seeking professional advice from your commercial real estate broker or attorney is always a smart move.

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