What Is Typically Included in an Estoppel Agreement?


Quick Answer

An estoppel certificate agreement is a certification by a tenant to a third party, such as a lender or potential buyer, that outlines the terms of a lease along with the status of the lease. The certificate is provided for the benefit of the third party when the third party is entering into a transaction with the property.

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Full Answer

A landlord looking to refinance or sell a piece of property may ask a tenant to sign an estoppel certificate agreement because the lender or buyer needs to know the status of the contracts that are encumbering the property. This provides a complete status of the property, including all of the obligations and leases in place. The status of the landlord and tenant relationship, and whether they are in good standing, is also indicated when furnishing an estoppel certificate agreement.

When executing an estoppel certificate agreement, the tenant is usually required to certify the agreement contains true statements. This means that if untrue information is stated, that information could make the tenant legally liable to the third party. Tenants should only verify information they know is true, or clearly state the information is only known to the best of the tenant's knowledge.

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