How is an estoppel certificate used?
When a property is sold or refinanced, the buyer or lender wants independent confirmation that leases are as the landlord describes. The landlord sends each tenant a certificate to complete and sign, as most commercial leases require within a set number of days.
Typical confirmations include the lease documents and amendments, the start and end dates, current rent and charges, the security deposit held, any prepaid rent, options to renew or terminate, and whether either party is in default. Tenants should check each statement against their own records before signing.
See also: Commercial lease administration.
What does an estoppel certificate cover?
Example checklist (illustrative). Lease dated 1 March 2022 with one amendment; term ends 28 February 2027; base rent $8,500 a month; CAM estimates $1,200 a month; security deposit $17,000; no rent paid more than one month in advance; one 5-year renewal option; no known defaults by landlord or tenant.
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