How to get an estoppel agreement signed

Question

Hi all - I just put my first property (duplex) under contract yesterday. I'll be inheriting 2 tenants and from what I have read I need to get an estoppel agreement signed for both units. What I haven't been able to find is how to go about doing it. I have a form for them to fill out but how do I get it in front of them and get them to sign it? This seems very important because I've already had one surprise about when the leases are up. Also I'd love to hear any additional recommendations you might have for a new landlord inheriting tenants. Thanks for your help.

Dan Schwartz · Answer

@Brad E. yes, the lease goes with the property, meaning you can't just kick people out when you take the title. But nothing prevents you from negotiating new leases with the tenants immediately, on your terms, on your forms, etc. You really should do that, so that you know you are protected according to your own plans. Of course, the tenant doesn't have to sign your lease, because their existing one is still in force. Expect some tenant(s) to balk.

Kristina Heimstaedt · Answer

Typically estoppels are part of the disclosure period and provided by the seller and listing agent. The best thing you can do is to not remove contingencies until you've received estoppels as part of the disclosure process on the part of the seller. Be the buyer in the driver's seat. Take control of the escrow by making the seller disclose as much as possible, don't be afraid to ask questions and ask the seller and listing agent to clarify anything that seems fishy.

Account Closed · Answer

If the deal hasn't been completed yet, I'd make it the seller's responsibility altogether to provide this. If that will slow down or halt the deal, and you're willing to absorb the fallout, then yeah, I'd send them something with delivery confirmation that says this is the deal or you need to prove otherwise by x date.I do not personally think certified mail is the way to go anymore. It's slow. And if you also require a signature, they can refuse. Honestly, in today's age, all you need is proof of delivery, which can be accomplished with USPS priority mail with delivery confirmation. As fast as first class mail, and the mailman just scans it when he/she puts it in their box. You then immediately have online proof that it was delivered. Cheaper, faster, and just as effective, if not more so, than the old-fashioned certified mail, which was the only way to get proof of delivery before there were scanners or the Internet, and they can't avoid delivery by refusing to sign.If you have access to their telephone numbers and/or email, you can also send notification that way. If you end up in court, ever, you can show multiple ways that you communicated.You just need proof of notification, though, and that only requires that you prove something was delivered. You don't have to prove that they ever had it in their actual hands, or that they actually ever opened it, or that they ever actually read it - none of which you can control, and none of which is required by the court. You just need to show it was delivered. Nobody gets to say they didn't "know" because they didn't open their mail or sign for something that they received.

Dan Schwartz · Answer

@Brad E. I don't think so. Check the Georgia laws for any peculiarities, but here in AZ I would ask them to sign a new lease right away. If they choose not to, I'd honor their existing one.

Brad E. · Answer

@Dan Schwartz Gotcha. Thanks!

Julian Diaz · Answer

The estoppel agreement should be on the seller to provide. This is something you and your agent should verify in the due diligence documents and cause for an amend/extend if it is not provided. As to approaching the tenants about it just pitch it in favor of them. Yes it is your way to enforce their leases but focus on the fact that it protects them from eviction and raised rents. Hope this helps and good luck!

Brad E. · Answer

Account Closed very helpful ideas. it's looking like i may have to take one of these paths. the seller just isn't super fast to respond. of course, this being my first property, im wanting to make sure i dot all I's and cross all T's so i don't end up with a massive headache later. im probably a little more worried about it than i should be, but at this point i feel its better to be safe than sorry. thanks so much! :)

Brad E. · Answer

Account Closed Thanks!The wording I used is "Attached hereto is a true, correct and complete copy of the lease dated ________________, 20__ between Landlord and Tenant. The Lease is now in full force and effect and has not been amended, modified orsupplemented. YES or NO (circle one)"I got that wording from a template I found online, but I kind of like yours better.The way I was told this would work is that my agent would give it to the seller agent who would get it to the tenant and have it signed. I wasn't exactly sure how to ensure that I would receive it back so I was going to add an amendment to the purchase agreement stating that the seller would provide a signed copy. Not sure if that's the right way to go about it. Learning as I go....If that doesn't work out I will go the route you suggested via USPS certified mail.

Account Closed · Answer

I think that's wise. I over-plan, too, but it makes me feel more secure, so why not :-) Best of luck to you!

Account Closed · Answer

I think that's a great idea. How I'd word it, though, is to say something like, "Attached is the lease agreement between you and Seller that has been provided to me. If it is incorrect, please notify me at such and such contact info, by such and such date, otherwise I will assume it is correct."Something like that. Where it's on them to contact you and let you know if it's incorrect --as opposed to asking them what is correct, which they may avoid providing. Puts you in a stronger position. Be sure and send it with delivery confirmation, so you have proof they received it. USPS priority mail is great, because the mailman/woman simply scans it when they deliver it and you have proof of delivery you can print out online. They can't avoid delivery and don't have to sign, but you have proof it was delivered.