A tenant estoppel certificate is often associated with the due diligence phase of prospecting a purchase of tenant-occupied property. Estoppel certificates are common practice in commercial transactions, but are often an unfortunate oversight in tenant-occupied residential purchases. So, what exactly is a tenant estoppel certificate and how does it work?
What is a tenant estoppel certificate?
What items are typically found in a tenant estoppel certificate?
- That a lease exists and is in full force and effect;
- That there are no defaults under the terms of the lease by either the landlord or tenant;
- The amount of each security deposit made, if any;
- That the tenant has no claims, defenses or offsets against payment of rent or enforcement of the lease by the landlord; and
- The amount of any rental payments made in advance, if any.