A signed statement from a tenant confirming the terms of its lease and that the lease is in effect, which a lender or buyer can then rely on.
A rent roll is the landlord’s account of the leases. An estoppel is the tenant’s. In it the tenant typically confirms the rent, the lease dates, any options, the security deposit, that rent is paid through a stated date, and that neither side is in default. Having signed it, the tenant cannot later claim different terms against the lender who relied on it.
Lenders use estoppels to check that the income they are lending against is real. The OCC handbook lists copies of all leases and executed tenant estoppels among the documents a bank’s file should hold for an income-producing property. Fannie Mae’s Multifamily Guide requires a tenant estoppel certificate for each material commercial lease, which it defines as one making up 5 percent or more of the property’s annual effective gross income.
In practice, a bank will want one from every major tenant in an office, retail or industrial building, and may accept fewer from small tenants. Apartment residents are rarely asked. Tenants can be slow to sign, so start collecting as soon as a lender issues terms. An estoppel that disagrees with the rent roll will be noticed.
How it shows up in the data here
Not in the data. Leases and tenant statements are private, and no public filing on this site carries them. Bank call reports show only the balance each bank held on rented commercial property: see investor CRE lenders and recent loans under investor CRE comps.
Go further
- Investor CRE lenders: Banks and credit unions holding loans on rented commercial property.
- Deal summary builder: Put the tenants, the income and the request on one page.
- Deal summary builder: Turn the facts of a deal into a clean one-page summary you can copy or print. Nothing is saved or sent.
- Investor commercial real estate loan checklist: On an investor property the rent pays the loan. The package is the evidence for the rent: who pays it, for how long, what it costs to collect, and who stands behind the borrower if it stops.
- What a lender-ready loan package looks like: A lender decides in minutes whether to keep reading. A package that answers the first five questions on one page, and backs each answer with a document, gets read.
Related terms
- Subordination, non-disturbance and attornment (SNDA): An agreement in which a tenant puts its lease behind the lender's mortgage, the lender agrees to honor the lease after a foreclosure, and the tenant agrees to treat the new owner as landlord.
- Rent roll: A list of every unit or space in a property showing the tenant, the rent, the lease dates and what is vacant, as of a stated date.
- NNN lease (triple net): A lease where the tenant pays rent plus the property's operating costs, typically taxes, insurance and maintenance. The exact split is whatever the lease says.
- Ground lease: A long lease of land on which the tenant owns or builds the improvements. A lender to the tenant takes a lien on the leasehold, not on the land.
- Non-owner-occupied commercial real estate: Commercial property where half or more of the loan's repayment comes from rent paid by tenants unrelated to the owner.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.