. The lender must have the right at any time to require that the landlord and the tenant certify key facts typically included in estoppel certificates
, including the validity and effect of the ground lease as amended, whether there exist any defaults under or offset rights, counterclaims or defenses relating to the ground lease and the amounts and status of rental payments.
There was no mention of these coupons in the lease agreements or in the estoppel certificates
signed by the tenants and former landlord; however, these tenants had legitimate coupons issued by the previous owners and thus had valid concerns.
The other key step is obtaining estoppel certificates
from existing tenants.
Generally, a lender will thoroughly review the tenant leases and obtain tenant estoppel certificates
from major tenants prior to making a loan to the borrower on income-producing property.
In addition to obtaining estoppel certificates
from commercial tenants, you should also require an estoppel certificate
from any guarantor to a commercial lease.
The bill creates estoppel certificates
for homeowners' associations.
: These certificates should not be modified to include Y2K concerns.
* Obtain estoppel certificates
for at least 75% of tenants.
Similarly, an attornment provision should be added, providing that the tenant will attorn to any new owner of the property after a foreclosure, and that the tenant will provide estoppel certificates
and minor lease amendments where necessary to satisfy a lender.
* The lender should acknowledge that the representations of commercial tenants in estoppel certificates
may be limited by the terms of a tenants lease.
Such certificates are commonly called "estoppel certificates
," since a tenant would be estopped, after delivering such a certificate, from contradicting such certificate if a dispute arose with the mortgagee or successor landlord.