Glossary / Lease terms and deal stages
Also known as: Tenant estoppel, tenant estoppel certificate, estoppel letter
A signed statement in which a tenant confirms the key facts of its lease, such as rent, dates, deposits, and any defaults, so a buyer or lender can rely on them. Once signed, the tenant generally cannot later contradict those facts.
Wikipedia describes an estoppel certificate as a document commonly used in due diligence in real estate and mortgage activities. Lenders and buyers use it to confirm rent amounts, security deposits, lease expiration dates, and any tenant claims against the landlord.
Cove lists typical items: the lease and amendments, current rent and escalations, commencement and expiration dates, deposits, whether improvement allowances were funded, and any defaults. It says most commercial leases require the tenant to return a signed certificate within 10 to 30 days of the request. According to IPG, once signed the tenant is "estopped" from later contradicting the facts stated. This is general information, not legal advice. Rules vary by state and by contract, so have the actual lease language reviewed.
An estoppel request usually means the landlord is selling or financing the building (USLegal notes they are commonly requested during sales and refinancing). If any of your commission is still unpaid, for example an installment due at rent commencement, whether a buyer takes on that obligation depends on your Commission agreement and the sale documents. That makes an estoppel request a good signal to confirm in writing what is still owed to you.
The certificate also records dates and facts that many commission agreements use as payment triggers, such as commencement dates and whether the tenant improvement allowance was funded. If those facts are disputed, the estoppel is often where the dispute surfaces.
When a tenant you placed is asked for an estoppel, check your commission records and send the landlord a written statement of anything still unpaid.
