By Elliot Zaks, Principal, Madison Commercial Real Estate Services
Each tenant estoppel certificate constitutes one or two pages within the hundreds of pages of closing documents of any commercial real estate transaction. Estoppel Certificates can easily be overlooked in the flurry of paperwork preceding a transaction. However, the tenant estoppel certificates are a valuable source of information which should be reviewed carefully by potential buyers or lenders.
Each estoppel certificate is a representation by a party signing the certificate to the addressee of the certificate. Signing the estoppel certificate establishes certain facts which the signing party may not later contradict, dispute or recant. In the landlord- tenant relationship, the tenant estoppel certificate is used to confirm the current status of the tenant and landlord’s rights and obligations under an existing lease.
A tenant estoppel certificate is generally used when a commercial property owner is seeking to sell or refinance the property. Tenant estoppel certificates are commonly used to clarify the tenant’s understanding of the lease agreement to potential lenders or buyers.
Here is why Estoppel Certificates are of value to both the buyer and the lender.
Tags: current monthly rent, Estoppel Certificate, income stream verification, landlord, lease agreement, lease commencement date, lease language, lease termination date, lender, loan repayment, parking allotment, security deposit, storage allotment, tenant
By David I. Tesler, Esq., CEO, LeaseProbe / Real Diligence
The landlord/tenant relationship can be fraught with difficulties. As in any business relationship, it is important for both the tenant and the landlord to set clear expectations and guidelines. While real estate leases are intended to establish the rights and obligations of each side, they are often lengthy and complex documents, with unique and individual provisions as well as numerous addendums which can override previous lease language. Such complexity can lead to mistakes and misunderstandings.
One area that is fraught with errors is Common Area Maintenance (CAM) charges. Errors and mistakes between the obligations spelled out in the lease agreements and the CAM amounts billed are typical. But ultimately it is in every both the landlord and tenant’s best interests to ensure that CAM bills are 100% accurate. Here’s why. Continue reading