ESTOPPEL CERTIFICATE

estoppel certificate: translation

estoppel letter or estoppel certificate

A document used in commercial mortgage transactions where the lender is secured by property that is leased to tenants.

Also known as tenant estoppel letters or tenant acceptance letters.

Written admissions that are obtained by the lender prior to funding to create estoppel. In an estoppel letter, the tenants attest that they believe the lease to be valid and enforceable, that they are making lease payments as agreed, that the landlord is not in default of any lease provisions requiring landlord performance and that no rent has been prepaid. The estoppel letter gives the lender more rights and more flexibility for disposing of the property in the event that the borrower defaults.

See estoppel. American Banker Glossary