Estoppel agreement needed

12 Replies

I’m looking into buying another Multifamily in New Hampshire (NH). It’s a 5 unit that I want to keep all the tenants, potentially, they are all currently on a shotty lease that the current owner, who is undermanaging the property, has them on. I want to get them to sign off that lease and get them on to my bulletproof lease. Will someone provide me with an Estoppel agreement that will help me attain this? Thanks BP!!!

The existing rental agreements go with the property.  You can ask them to sign yours, but they don’t have to.  Also depends if they’re on leases vs. TAW.

I was in understanding that an Estoppel agreement releases the tenant from the current lease, when a property is for sale. Is there a document that does that? 

No, there is not a standard document that does that. As @Dick Stevens mentioned, you can draw up such an agreement for the tenant to sign, but they are under no obligation to do so.  In fact, I'd be very surprised if they did.   Whenever purchasing an occupied building, I think it prudent to factor in the tenants staying through the balance of their lease at the current rental rate, at minimum.  I'd also prepare for the costs of an eviction as well.  I have not had good luck with the vast majority of inherited tenants.

I have written into the P&S agreement a contingency that, if each tenant wants to stay they must sign a new lease with me or be removed before closing. I am keeping the rents the same, the main difference is the lease and I won't be paying for utilities.

You’ll likely never buy the property with that clause. No tenant is required to change their lease, let alone start paying utilities in addition. The current owner can’t make them sign, or vacate if they are not in breach of their lease.
You better count on the tenants being under their current leases until they expire. Then maybe you can add utilities without them leaving.

An estoppel letter, not an estoppel agreement, is simply the tenant signing a letter that spells out what their Current lease is, rate, term, amount of security deposit they have made, etc.

@Rick M. You really should run this by an attorney in your area as it sounds like there's some confusion on what you're trying to do. Your P&S agreement is an agreement between you and the seller, NOT you and the tenants. You can't sign an agreement with the seller that changes the terms of the agreements (i.e. who pays for utilities) they have with the tenants unless the tenants also agree to it. And if the tenants have a valid lease and they're not in violation of it, there's no legal cause to remove them before (or after) closing.

The estoppel certificate is a form filled out by the tenant and then confirmed by the Landlord. It's supposed to ensure there are no surprises after closing. For example, you buy the place and the tenant later claims the Seller allowed them to paint the walls black or that their security deposit was twice what the Seller claimed. How will you know? An estoppel certificate fixes this problem.

Some things it may include:

1. Tenant name, contact information, and address

2. Occupancy date

3. Is there a written lease? If so, review it to ensure it matches the estoppel certificate

4. Are there any modifications to the written lease?

5. Are there any verbal agreements or arrangements between the current Landlord and Tenant?

6. Current lease term (expiration date, month-to-month)

7. Current rent rate

8. Rent due date

9. Security deposit amount

You can find plenty of examples by searching for "tenant estoppel certificate doc" or exchange "doc" with "pdf" for more options.

Here is an example and explanation: https://eforms.com/rental/estoppel-certificate/

Some have a lot of legal jargon but this document does not need to be so detailed. This is an important tool for anyone buying a tenant-occupied property.

Originally posted by @Nathan G.:

The estoppel certificate is a form filled out by the tenant and then confirmed by the Landlord. It's supposed to ensure there are no surprises after closing. For example, you buy the place and the tenant later claims the Seller allowed them to paint the walls black or that their security deposit was twice what the Seller claimed. How will you know? An estoppel certificate fixes this problem.

Some things it may include:

1. Tenant name, contact information, and address

2. Occupancy date

3. Is there a written lease? If so, review it to ensure it matches the estoppel certificate

4. Are there any modifications to the written lease?

5. Are there any verbal agreements or arrangements between the current Landlord and Tenant?

6. Current lease term (expiration date, month-to-month)

7. Current rent rate

8. Rent due date

9. Security deposit amount

You can find plenty of examples by searching for "tenant estoppel certificate doc" or exchange "doc" with "pdf" for more options.

Here is an example and explanation: https://eforms.com/rental/estoppel-certificate/

Some have a lot of legal jargon but this document does not need to be so detailed. This is an important tool for anyone buying a tenant-occupied property.

Thank you Nate this is what I wanted

Here is one that we have used.  Always check with your attorney as local jurisdictions vary.

1. Legal tenant name(s), and names of all people (including minors) living in rental unit:

______________________________________________________________________________________

___________________________________________________________________________________________________________

Address and apartment number: ___________________________________________________________

2. I have signed a written rental agreement / lease for this apartment. YES or NO (circle one)

If you answered YES above, do you possess a copy of that written agreement? YES or NO (circle one)

3. I have been living in this unit since _____/______/_______(date).

My current lease ends on _____/_____/____(date) OR My lease is month-to-month YES or NO (circle one)

4. My rent is $______________per month or week (circle one) and is due on ____________________.

5. I participate in a housing assistance program (such as DSS / Section 8) YES or NO (circle one)

If YES, please indicate which program(s) assist you, how much they pay, and your contact person there:

Program: ______________________ Amount they pay: $ ___________ Contact name/ph #: __________________

Program: ______________________ Amount they pay: $ ___________ Contact name/ph #: __________________

6. I have paid a security deposit. YES or NO (circle one) The deposit amount is $ ______________.

7. My most recent rent payment was made on ____________, 20_____ (date) for the amount of $_______________

8. I am responsible for paying these utilities :________________________________(Write “none” if applicable)

9. Any other deposits or pre-payments are as follows__________________________________(Write “none” if applicable)

10. The appliances I own are:_________________________________________. (Write “none” if applicable)


11. Smoking occurs inside my rental unit. Yes or No (circle one)

12. I have an animal. Yes or No (circle one) How many? _______ What breeds/weight? _____________/_______lbs.

_____________/_______lbs.

Yes or No (circle one) I have paid a non-refundable pet fee in the amount of ______________

Yes or No (circle one) I pay a higher monthly rent due to my pet(s) in the amount of _____________

13. Other written or verbal agreements I have with the landlord are: (Write “none” if applicable.)_____________

_________________________________________________________________________________________

14. Any problems related to my tenancy or any repairs that are needed are: (Write “none” if applicable.)

_________________________________________________________________________________________

FOR YOUR PROTECTION, DO NOT LEAVE ANY BLANKS – WRITE “NONE” IF APPLICABLE

Signed by tenant ____________________________________________ Date: ____________

Signed by tenant _____________________________________________ Date: ____________

I have reviewed the answers given above and agree with the tenant’s statements regarding their payments, agreements and deposits.

Owner: _____________________________________________ Date: ___________