Estoppel Certificate
An estoppel certificate is a signed statement from a tenant confirming the key terms of its lease, such as rent, lease dates, deposits and whether any defaults exist. Buyers and lenders rely on it during due diligence, because the tenant cannot later claim terms that contradict what it certified.
Why estoppel certificates matter
A rent roll and lease file show what the landlord says the leases contain. An estoppel certificate gets the tenant to confirm those facts directly, which uncovers side agreements, rent disputes, prepaid rent or unrecorded amendments before closing.
Lenders usually require estoppels from major tenants, often all tenants above a certain size or share of income. Any difference between the estoppel and the rent roll has to be resolved before the loan closes.
Leases often require tenants to deliver an estoppel within a set number of days when requested, but collecting them can still delay a closing.
Estoppel Certificate vs. SNDA
An estoppel certificate confirms the facts of a lease as of a date. A subordination, non-disturbance and attornment agreement (SNDA) sets the relationship between the tenant and the lender, including whether the lease survives a foreclosure. Lenders often request both from major tenants.
How Smart Capital Center handles estoppel certificates
Smart Capital Center's AI agents compare each estoppel certificate with the lease abstract and the rent roll, and flag any difference in rent, dates, deposits or reported defaults for the deal team to resolve.
Frequently asked questions
What does a tenant estoppel certificate include?
It typically confirms the lease and amendments in effect, the lease start and end dates, the current rent and next increase, the security deposit, any prepaid rent, renewal or purchase options, and whether the tenant or landlord is in default. Many also confirm the tenant has no claims against the landlord.
Who requests an estoppel certificate?
Buyers request estoppels during due diligence, and lenders request them before funding a loan or refinancing. The landlord sends the request to each tenant, usually on a form the buyer or lender prepares, and the lease often sets how quickly the tenant must respond.
What happens if an estoppel certificate differs from the lease?
The difference has to be investigated and resolved before closing. It may reveal an unrecorded amendment, a rent concession or a dispute. Depending on the issue, the buyer or lender may adjust the price or loan terms, require a fix from the seller, or delay closing.