The Law Surrounding Estoppel Certificates

Introduction

Commercial tenants are often expected to deliver signed estoppel certificates, status statements or tenant acknowledgements in connection with purchase, sale or financing transactions involving leased property. It is also fairly common for tenants to request an estoppel certificate or estoppel language from a landlord when negotiating the transfer of their leasehold interest under a lease. Stemming from the principle of promissory estoppel, estoppel certificates are intended to "estop" a party who signs the certificate from thereafter asserting a fact inconsistent with what is set out in the certificate.¹ Should a signatory attempt to make a claim based on facts contrary to what was stated in an estoppel certificate, the addressee of the certificate may argue that it detrimentally relied on the statements in the certificate and seek to estop the signatory from enforcing the rights on which the claim is based.