What is the purpose of an estoppel certificate?

An estoppel certificate serves to verify the terms of a lease, providing essential confirmation of the agreement between the landlord and tenant. This document is typically used when a property is being sold or refinanced, as it assures prospective buyers or lenders that the information about the lease is accurate and current. By signing an estoppel certificate, the tenant acknowledges key aspects of the lease, such as the rent amount, any lease modifications, and the lease's status, thus preventing the tenant from later disputing these terms. This verification feature strengthens the reliability of the lease information presented to third parties involved in a real estate transaction.