Estoppel Agreements

Tenant Estoppel Certificates, what are they?

Whenever a landlord places a rental property up for sale, the realtor and landlord will ask for a tenant to complete and sign an estoppel certificate. An estoppel certificate is used to tell a possible buyer of commercial or residential rental property of the rights of existing tenants. The certificate requests information about rent amount, lease terms, protected tenancy status, verbal agreements with the landlord, changes to written lease agreements, promises made by the landlord, and agreements regarding payment of utilities, e.g. water and gas. Simply speaking, the estoppel agreement lays out the type of relationship between the landlord and tenant. The goal would be to inform any prospective buyers of rental property about the rights of existing tenants.


What happens if the Realtor Does Not Send the Certificate Onto Potential Buyers?

Realtors have a required duty to send prospective buyers any estoppel certificates. Civil Code § 2079.16. In addition, a buyer can recover damages against a seller and or realtor who have s an Fake estoppel certificate. Linden Partners v. Wilshire Linden Associates, 62 Cal. App. 4th 508, 531 (1998).

Do I have to fill out an Estoppel Certificate?

A tenant has to sign an estoppel agreement where the lease requires the tenant to do so. If the tenant fails to complete the estoppel certificate as requested by a lease, the tenant may be evicted for breaching the lease. If the lease is missing a lease requirement, the tenant does not have to complete or sign an estoppel agreement.

So, Should I Sign the Estoppel Agreement Anyway?

Even though a lease may not require an estoppel certificate, there are a couple of situations where a tenant really should sign an estoppel. First, a tenant should complete an estoppel agreement where the tenant has oral agreements with the property owner that are not in writing. For instance, if a landlord verbally agreed to allow a tenant to have a dog, the tenant would be smart to record this in the estoppel. Other examples include arrangements about payment of utilities, car port and storage, subletting, use of common areas, rent reductions and security deposit interest. Second, a tenant will want to sign an estoppel certificate if the tenant resides in a rent-controlled area and has protection against eviction because of age, disability or illness. If this is applicable, it is a good idea to talk to a tenant rights attorney or an appropriate city agency.