Estoppel Certificate? Estop and Check Your Lease

By:  Lauren Podgorski

If you are leasing space in a building, there may come a time when you receive a request from your landlord to fill out and sign an estoppel certificate. Estoppel certificates are usually sent to tenants in connection with the sale or refinance of a building, and a third party may rely on the accuracy of the statements and information contained in the estoppel certificate in connection with that transaction. Estoppel certificates can range from a very simple, one-page document, to several pages.

I’ve received an estoppel certificate in the mail. What do I do now?

Consider the following:

Check your lease. Your lease may require you to deliver the signed estoppel certificate and may even give you a timeframe within which you are required to return it. A form of estoppel certificate may also be included in your lease as an exhibit. If you’ve previously agreed to a form of estoppel certificate in your lease, check to ensure the one you have received matches the form you previously agreed to and if it doesn’t make sure to review it carefully to make sure it is acceptable.

Review the estoppel certificate and confirm that all of the information is accurate. Be on the lookout for any terms or provisions that you did not agree to in your lease. If it seems like the landlord is trying to modify your lease, you likely do not need to consent to the change in this document. Cross off (or modify or delete, if you have an electronic copy) any information that is inaccurate. Fill in all blanks (if the blank is not applicable, write “N/A”), and if any exhibits are referenced in the body of the document, make sure they are actually attached.

It is likely the estoppel certificate will ask you to confirm that “no default” exists under your lease. Be sure to think about this carefully. Are there presently defaults, or are there events or circumstances which do not currently constitute a default, but could potentially become a default in the future? For example, you may need some maintenance or repairs done. You have requested that your landlord complete these repairs, pursuant to your lease. If the landlord does not complete the repairs, after any applicable notice and cure periods, she may be in default under your lease. It may be prudent to note the existence of the required maintenance or repairs in your estoppel certificate, despite the fact that they do not currently render your landlord in default.

Lastly, there may be items that the estoppel asks you to confirm, of which you are unsure. It is okay to add qualifying language such as “to my knowledge, as of the date of this estoppel certificate,” or, “to my knowledge, without having investigated,” or, “to the actual knowledge of Pam Managère.”

My lease doesn’t require me to deliver an estoppel certificate. So, can I ignore it?

Even if your lease does not require you to deliver an estoppel certificate, you may still want to complete and deliver it, in order to stay on good terms with your current (or possibly future) landlord.

And if you’re mistaken about that requirement (let’s say you skimmed your lease quickly and you’ve missed the provision which requires you to deliver an estoppel certificate), there may be consequences for not delivering one. Consequences range from being in default under your lease, to your landlord signing on your behalf if you neglect to, and as a result, even inaccurate information contained in the estoppel certificate may be deemed to be true.

 

 

Author: Lauren Podgorski | Leave a comment Tagged , , ,

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