[WSBARP] Estoppel Certificates - Who Benefits?

[Paul Neumiller]

I’m sure you realize this but whoever prepared the EC blew it.  Your EC is a strange duck because it should have said the “LL is not in default of the lease,” not the T.  An EC is given for the benefit of a third party (either a purchaser, as in your case, or a lender).  I have never understood it to be given for the benefit of the T (but don’t have any cases to cite).  In fact, most Ts resist giving an EC unless required under the lease.  Not only is your unusual language self-serving by the T, it isn’t even signed by the LL.  I don’t like their argument relying on the EC but, if I were them, I would argue that the lease was ambiguous (or something like that) and the parties “custom and practice” was for the LL to pay the property taxes.  

 

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Rob Rowley
Sent: Tuesday, December 8, 2015 1:22 PM
To: WSBA RPPT <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Estoppel Certificates - Who Benefits?

 

Assume Washington state long-term commercial lease which is triple net.  Same landlord and same tenant for many decades.  Landlord inadvertently pays the county real property taxes for many decades thinking that he had to pay the taxes and not the tenant.  Didn't pay close attention to the lease terms.

 

Landlord sells property to new landlord (subject to long-term lease) who requires estoppel certificate from long-term tenant.  Estoppel certificate states in part that “the tenant is not in default in the performance of the lease, and no notice of default has been given to tenant." Only signed by the tenant. 

 

Sale successfully closes and a few weeks after closing Landlord realizes that he should have never been paying the real property taxes for all these decades.  Landlord sends written demand to former tenant demanding reimbursement of the real property taxes which were otherwise legally due under the triple net lease.

 

Mega law firm for former Fortune 100 tenant denies claim citing the estoppel certificate and the above cited provision.  Also, raising estoppel, waiver and latches.

 

Obviously we're looking at six-year statute of limitations on the real property taxes (and waiver/laches) but want to hear from those who are far smarter than I.

 

Thank you.

 

Robert R. Rowley | Attorney at Law

7 S. Howard St, Suite 218

Spokane, WA  99201

Telephone: (509) 252-5074

Mobile: (509) 994-1143

Facsimile: (509) 928-3084

Email:  <mailto:rob at rowleylegal.com> rob at rowleylegal.com

Web Site:  <http://www.rowleylegal.com/> www.rowleylegal.com

 

Practice concentrated on business, real estate and general legal matters in Washington and Idaho.

 

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