- An estoppel certificate is a short, signed statement from the landlord confirming the current status of a lease — the landlord agreeing, in writing, not to later claim something…
- A seller’s representations and warranties in the purchase agreement are only as good as the seller’s own knowledge and honesty.
When a buyer is purchasing a business that operates out of leased space, they aren’t just relying on your word about the lease — they want the landlord to confirm it in writing. That document is usually called an estoppel certificate (sometimes a "certificate of lease status" or "tenant estoppel"). It’s one of the quieter closing deliverables in a business sale, but it can hold up an otherwise-ready deal if nobody asks for it early enough.
This article explains what an estoppel certificate typically confirms, why buyers rely on it, and how to request one from your landlord without a last-minute delay.
What an Estoppel Certificate Is
An estoppel certificate is a short, signed statement from the landlord confirming the current status of a lease — the landlord agreeing, in writing, not to later claim something different from what the certificate says. Because the buyer is relying on the seller’s representations about the lease, having the landlord independently confirm those same facts is a standard piece of due diligence whenever a leased premises is part of the deal.
What It Typically Confirms
| What the Certificate Confirms | Why the Buyer Cares |
|---|---|
| The lease is in full force and unmodified (or lists any side letters/amendments) | Buyers want to know the written lease is the whole deal, not one piece of it |
| Whether the tenant is currently in default | An undisclosed default could let the landlord terminate after closing |
| The current term and any renewal or extension rights | Confirms how long the buyer can actually rely on the space |
| Whether rent and other charges are paid to date | Protects against inheriting arrears the seller didn’t disclose |
| Whether the landlord is aware of any dispute | Surfaces problems before they become the buyer’s problem |
Why Buyers (and Their Lenders) Ask For One
A seller’s representations and warranties in the purchase agreement are only as good as the seller’s own knowledge and honesty. An estoppel certificate gives the buyer an independent, third-party confirmation of the lease’s status directly from the person who would enforce it after closing — the landlord. Where the buyer is financing the purchase, a lender will frequently make an estoppel certificate a condition of funding, since the lender’s security is only as good as the business’s right to keep operating from that location.
Requesting an Estoppel Certificate: The Practical Steps
- Check the lease itself. Many commercial leases already include a clause requiring the landlord to provide an estoppel certificate on reasonable request.
- Request it in writing, early. Landlords aren’t always fast to turn these around, so this should happen as soon as the deal is far enough along to justify it — not the week before closing.
- Attach a draft certificate for the landlord to review and sign. Many purchase agreements or lease documents include, or reference, a standard form to make this easier for the landlord.
- Route the request through your lawyer, so any gaps between what the certificate says and what your purchase agreement assumes get caught before closing, not after.
- Build it into your closing checklist as a buyer condition, so the deal doesn’t close until it’s in hand, or until the parties have agreed on another way to address the risk.
If the Landlord Is Slow or Won’t Sign
Some landlords are simply slow; others resist signing anything without their own lawyer’s involvement, or want to use the request as leverage over an unrelated issue, like consenting to the assignment itself. If a landlord won’t cooperate on a reasonable timeline, the purchase agreement should say what happens next — commonly, the seller’s own representations and warranties, backed by an indemnity, stand in for the missing certificate, sometimes alongside a holdback tied specifically to lease-related risk.
Frequently asked questions
Is an estoppel certificate the same thing as landlord consent to assign the lease?
No. An estoppel certificate confirms the lease’s current status; consent to assignment is a separate approval needed to transfer the lease to the buyer. Many deals need both, and it’s worth requesting them together to avoid dealing with the landlord twice.
Who pays for an estoppel certificate?
This is a matter of negotiation between the parties, and sometimes the landlord charges an administrative fee under the lease itself. There’s no fixed rule, so it’s worth confirming who is responsible early in the deal.
What if the estoppel certificate reveals a problem we didn’t know about?
That’s exactly why buyers ask for one before closing rather than after. A disclosed problem becomes something to negotiate — a price adjustment, a holdback, or a condition to fix — while an undisclosed one discovered after closing is a much harder position for the buyer.
Do we need one if the business is being sold as a share sale?
Often, yes. Even though the corporate tenant doesn’t change in a share sale, the buyer is acquiring the corporation together with its lease obligations, so confirming the lease’s actual status is just as relevant to what the buyer is paying for.
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