Estoppel Certificate

An Estoppel Certificate is a legal document used in real estate transactions that prevents a party from asserting a claim or fact that contradicts the established understanding between parties. It typically involves a tenant certifying the terms of their Lease to a prospective purchaser or lender, ensuring that the information provided is accurate and binding. This helps to confirm the rights and obligations of the parties involved, thereby reducing disputes.

For example, if a tenant signs an Estoppel Certificate stating that their Lease has two years remaining and that they have paid all rent, they cannot later claim that the Lease was actually month-to-month or that they owe back rent.

In the case of Fort Washington Associates v. Dodson, the court held that the tenant was estopped from denying the terms of the Lease stated in the Estoppel Certificate, rEINforcing the importance of these documents in protecting the interests of buyers and lenders.

Another example is in Concordia Properties, Inc. v. McCarthy, where the court found that a tenant’s failure to disclose ongoing disputes in an Estoppel Certificate led to significant liabilities for the property buyer, highlighting the necessity for thoroughness and honesty in these documents.