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