An estoppel certificate is a signed certification of various matters with respect to a lease. It has been defined as a signed statement by a party, such as a tenant, certifying for the benefit of another party that a certain statement of facts as of the date of the statement, such as that a lease exists, that there are no defaults, and that rent is paid to a certain date. (Plaza Freeway Ltd. Partnership v. First Mountain Bank (2000) 81 Cal.App.4th 616.) A tenant estoppel certificate may also set forth specific facts regarding the term of the lease, whether there are any extensions, the amount of the security deposit, and a description of the lease premises.
Because the facts recited in an estoppel certificate are conclusively presumed to be true, the person executing the estoppel certificate is “estopped” from contradicting the information contained in the estoppel certificate. (See Evid. Code § 622.) In other words, an estoppel certificate binds the signatory to the statements made and estops the party from claiming to the contrary at a later time.
Landlords commonly request tenants to execute an estoppel certificates when the landlord wants to sell the leased premises or obtain financing that will be secured by the property. This is an important step in the due diligence process for the landlord and the buyer/lender. In fact, most potential buyers or lenders require a landlord to obtain tenant estoppel certificates as a condition of the sale or loan. Indeed, many lenders and buyers rely upon the certificates in finalizing loans and purchases. This helps promote certainty and reliability in commercial transactions. Therefore, it is very important that the information contained the estoppel certificate is accurate.
Schorr Law has experience with preparing estoppel certificates and analyzing leases in connection with commercial real property transactions. For a free consultation please call (310) 954-1877 or email us at .