Form 7.2 in the Oregon REALTORS® Library is the Tenant Estoppel Certificate. Estoppel under Oregon law is something that stops an individual from claiming contrary or different information. An Estoppel Certificate is a binding statement by a party stating the current status or conditions of a lease. When a tenant signs an estoppel certificate, they are creating a legally binding statement about the terms of the lease that the tenant cannot dispute. If the tenant brings a lawsuit claiming the lease terms are inaccurate, the new landlord merely needs to pull out the estoppel certificate and say, “Didn’t you say the terms were ____?” and the dispute is effectively over.
This allows a landlord to commit an oral lease to paper and it allows a tenant to lock in the terms and oral arrangements from the occupancy. For Buyers who are inheriting tenants and oral leases, tenant estoppel certificates are necessary. The Buyer wants to have some sort of document in place that outlines the terms of the lease before a dispute with the tenant arises.
Tenant Estoppel Certificates can be used as a Buyer’s tool by guaranteeing terms and allowing Buyer to defend the estoppel terms (e.g. “You stated on your estoppel certificate that the lease was $800/month, but now you’re claiming it’s $500/month?”); Buyer can use the certificate as support when questioning the Seller/Landlord (e.g. “Tenant said you would pay for curtains, but you’re saying you won’t? We need to figure this out before I buy.”); Buyer can use the estoppel certificate to learn about pending expenses and credits that Buyer would inherit.
Tenants can use the certificate to guarantee terms of the lease as the tenant understood them (e.g. “Back in June we agreed it was $500/month and that’s what the certificate said, but now you’re claiming the Landlord said $800/month?); Tenant can use the estoppel certificate to ensure the Buyer/new Landlord knows about unique conditions or entitlements (e.g. service animals, reasonable accommodations, rent credits for yard work, etc.); and Tenant can use the certificate to ensure new landlord knows about and receives the full security deposit and prepayments (e.g. old Landlord ran off with $500 in prepaid rent, new landlord never knew about it and refuses to honor the prepayment).