Contracts

A Connecticut buyer is purchasing a multi-family property. The purchase contract requires the seller to provide estoppel certificates from each tenant before closing. What is the purpose of an estoppel certificate?

ATo certify that the property is free from environmental contamination
BTo have each tenant certify the lease terms (rent amount, deposit, expiration date, and any disputes) so the buyer knows the true state of each tenancy✓ Correct
CTo waive the tenant's right to object to the new owner
DTo get the tenant's permission to sell the property

Explanation

An estoppel certificate is a signed statement by a tenant certifying the current lease terms—monthly rent, security deposit, lease expiration, and whether there are any defaults or disputes. It prevents tenants from later claiming different terms than what they certified.

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