Friday, August 25, 2006

Estoppel certificate

These are often found in the context of commercial lease situations where the landlord and a third party are in negotiations for the sale of the real property.  The potential buyer would like to know if there are any potential disputes with respect to existing leases and submits the estoppel certificates for the tenant to complete and execute.

The certificate itself will generally contain the amount of rent, the lease term, the security deposit, a statement by the tenant that it is not insolvent and no lawsuits are pending or threatened against it, that the tenant has not subet or assigned its interest in the lease and an acknowledgement that the statements contained in the certificate will be relied upon by the potential buyer.


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