Tennant Estoppel Certificates
 
March 5, 2003
 

A due diligence review by a lawyer for a lender client regarding a loan secured by real property with tenants should ensure that the lender is aware of all aspects of the tenants’ leases and other agreements. The lender should secure a representation by each tenant, in the form of a tenant estoppel certificate, of the specific details of the tenant’s lease, and the lender should be able to rely on the certificate when closing the transaction and in the event of any disputes. The statements in the certificate should confirm, at a minimum, all of the following:

• a true and correct copy of the lease and all amendments, side letters, and any other agreements modifying the lease a reattached, and the amended lease is in full force and effect

• the tenant has accepted the premises and is currently occupying them and paying rent and any other charges (such as operating costs and CAM costs). The certificate should contain the amount of the rent and the other charges

• the actual commencement date of the lease

• the square footage of the premises

• the amount of any security deposit paid to the landlord by the tenant

• the tenant has not paid any amounts to the landlord other than rent and the security deposit

• the landlord has not defaulted under the lease, and the tenant knows of no action or omission that, with the giving of notice or the passage of time, or both, would become a default by the landlord

• the tenant has no claims or defenses to enforcement of the lease, nor any right to any offsets against rent. Or, if the tenant has any such claims, defenses, or rights, the tenant must specifically list them