What is the purpose of an estoppel certificate?

An estoppel certificate serves a vital role in real estate transactions, particularly in clarifying the understanding between parties regarding lease agreements. This document is used to confirm the terms of a lease and prevent any party, usually the tenant, from later denying those agreed-upon terms, thereby "stopping" them from contesting what was previously established.

For instance, if a tenant provides an estoppel certificate that confirms their understanding of the lease terms—such as the rent amount, the duration of the lease, and any other obligations—this can be crucial for landlords or any potential buyers or lenders dealing with the property. It provides assurance that the tenant cannot subsequently claim that different terms were in effect or that they were unaware of certain conditions.

The other options describe concepts that are not the primary function of an estoppel certificate. For example, verifying that property is free of leases or outlining eviction procedures relates to property status and landlord-tenant relations but does not encapsulate the essence of what an estoppel certificate ensures. Similarly, while confirming rent owed could be part of a broader financial agreement or dialogue, it is not the primary purpose of an estoppel certificate, which focuses on affirming the existing lease terms to prevent future disputes.