The use of estoppel certificates is widespread in the commercial real estate industry. While several other states have well-established law regarding estoppel certificates (almost universally for the benefit of landlords), there is no appellate opinion in Oregon that addresses estoppel certificates. The Honorable Judge Huckleberry recently ruled that estoppel certificates are binding in Oregon, in favor of our client. In our case, the tenant had signed an estoppel certificate, in which it attested that it had no offset against rent, and then it attempted to assert an offset against its rent. The tenant asserted numerous defenses to the estoppel certificate, including that they did not understand the certificate (English was not their native language), that the estoppel certificate was not for the benefit of the landlord (but instead for the benefit of a bank that requested and received the certificate), that the landlord could not possibly have and did not rely on the certificate, as well as several other defenses. The Court held that, notwithstanding any of the defenses, the tenant was barred from asserting an offset as a result of its representation in the certificate. The ruling reinforces the basic premise of Oregon law that one may not deny a recital in a written agreement.
Jan D. Sokol
Lawrence A. Wagner
Business & Commercial Litigation