Estoppel Certificates in Commercial Real Estate
The signed statement of lease facts that buyers and lenders rely on.
What is an estoppel certificate?
An estoppel certificate is a signed statement in which a tenant (or landlord) confirms the key facts of a lease — the rent, the term, the security deposit, and that neither side is in default. Buyers and lenders rely on it during a sale or refinance to verify the lease is exactly what the seller claims.
Why estoppel certificates matter
When a commercial property is sold or financed, the value depends heavily on the leases in place. The buyer or lender cannot simply take the seller's word for it, so they ask each tenant to certify the lease terms directly. Once a tenant signs, it is generally "estopped" — legally prevented — from later claiming facts that contradict what it certified.
What an estoppel certificate typically confirms
- The lease is in effect and has not been modified except as stated;
- The current rent, CAM, and the paid-through date;
- The security deposit and any prepaid rent; and/or
- That the landlord is not in default and the tenant has no offsetting claims.
What a tenant should check before signing
Because the certificate is binding, a tenant should confirm every fact is accurate and should not waive rights it actually has — such as an outstanding improvement allowance, a renewal option, or a pending landlord obligation. Most leases require the tenant to deliver an estoppel within a set number of days, so the obligation itself is usually not optional; the accuracy is what the tenant controls.
How Nochumson P.C. helps
Nochumson P.C. reviews estoppel certificates for tenants and prepares estoppel packages for landlords and sellers in commercial real estate transactions. Contact us before you sign an estoppel.
Related articles:
- Commercial Lease Agreements: Key Terms to Negotiate
- Assigning a Commercial Lease
- Ground Leases in Pennsylvania
- Lease Guaranties: Personal Guarantees on Commercial Leases
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