Canada: Estoppel Certificates: To Sign Or Not To Sign, That Is The Question

Last Updated: June 22 2018
Article by Christine CD Duguay and Miguel Manzano

As part of the due diligence process involved in a real estate transaction, the potential buyer or creditor will typically review the leases affecting the property and ask the current landlord to have its tenants sign an "estoppel certificate" in which the tenants will describe the status of the lease and claims, if any, that they may have against the landlord 1.

On August 10, 2017, the Ontario Superior Court issued a decision that deals with the importance and enforceability of an estoppel certificate 2.

1960529 Ontario Inc. v. 2077570 Ontario Inc.

In this case, a company was running a business as a bar and game arcade (the Tenant), and was leasing premises in a property in Toronto (the Property) belonging to the landlord (the Landlord). The Tenant's lease contained a right of first refusal provision, under which, in the event the Property was to be sold, the Landlord would need to provide the Tenant with a copy of the offer to purchase prior to accepting the offer, in which case the Tenant would have 24 hours to submit to the Landlord an equivalent offer. On October 17, 2016, the Landlord entered into an agreement with a buyer (the Buyer) for the purchase of the Property. On February 14, 2017, the Landlord notified the Tenant of the sale of the Property and made it sign an estoppel certificate in which the Tenant admitted, among other things, that the Landlord was not in default under the terms of the lease and the Tenant had no claim against the Landlord based on the terms of the lease. On February 17, 2017, the Landlord sold the Property to the Buyer. On February 21, 2017, the Buyer gave the Tenant a notice of termination of the lease, requiring it to leave the leased premises no later than February 28, 2018, the whole in accordance with a demolition provision included in the lease. On March 23, 2017, the Tenant brought a motion for declaratory judgment and injunctive relief, in support of its claim for enforcement of its right of first refusal.

In its analysis regarding the decision of whether or not to grant the Tenant a provisional interlocutory injunction, the court stated that parties to a commercial real estate transaction are entitled to rely upon an estoppel certificate to prevent the party signing the certificate from taking a position that is contrary to the statements therein 3. The court continued by explaining that when the Tenant's representative signed the estoppel certificate and gave it to the Landlord, it should have known that the parties affected by the sale of the Property would rely on the contents thereof 4.

Furthermore, the court stated that it would be unfair to accept the Tenant's claim that the Landlord was in breach of its obligations relating to the right of first refusal provision, after the Tenant had signed the estoppel certificate, in which the Tenant stated the Landlord was not in default under the lease and that it had no claim against said Landlord 5. The court therefore confirmed that by signing the estoppel certificate, the Tenant was waiving the rights granted to it by the right of first refusal provision.

Finally, the court concluded that because of the legal effect of the estoppel certificate, it would not grant the injunction requested by the Tenant 6.

Even if this is an Ontario judgment, Quebec jurisprudence shows that the same principle applies in Quebec.

Enforceability of an estoppel certificate in Quebec

In certain decisions, when the court is asked to interpret the terms of a lease, it relies, among other things, upon an estoppel certificate as additional evidence 7.

However, in a Superior Court of Quebec decision dated 2015, the court addressed the applicability of an estoppel certificate in connection with a breach of the terms of a lease 8. In this case, the owner, through its property manager, sought damages against the Tenant who operated a restaurant in the owner's building. The owner alleged that the Tenant made false representations regarding the term of its lease, which false representations were found in an estoppel certificate signed by the Tenant. It is important to note that there were two leases in force between the Tenant and the owner, namely, a French lease with an end date of March 30, 2014, and an English lease with an end date of November 30, 2014. Prior to purchasing the building, the owner  relied upon an estoppel certificate signed by the Tenant in which it admitted that its lease had a termination date of November  30, 2014, namely, the end date of the English lease. It was when the Tenant terminated its lease on March 30, 2014, in accordance with the term of the French lease, that the owner sought damages against it.

After having assessed the evidence, the court determined that the lease in force between the Tenant and the owner was in fact the French lease 9. Concerning the issue of the estoppel certificate, the court mentioned that the fault was with the Tenant who knew or should have known that potential hypothecary creditors or purchasers of the building would rely on the statements made in said certificate, even if the lease in force actually had a termination date of March 30, 2014 10. Consequently, the damages suffered by the owner were equivalent to eight months of rent, being, the difference between the term of the French lease, and that of the English lease. More importantly, the court stated that the amount to be awarded as damages must reflect the amount of rent indicated in the estoppel certificate, despite the fact this amount differed from that specified in the lease in force 11.

It is therefore apparent from this case that, under the circumstances and notwithstanding the explicit wording of the lease in force, the terms of the estoppel certificate may prevail, given the fact that it is a legal document on which the parties to a transaction are reasonably entitled to rely upon.

It is relevant to mention that in a Quebec Court of Appeal 12 judgment, the court stated that an estoppel certificate constitutes an extra-judicial admission, that can be revoked only through evidence of an error of fact by its author. With the weight of the extra-judicial admission being left to the court's discretion, the court must choose the most plausible version between the evidence on file and the estoppel certificate. In this case, despite the Tenant's claims to the effect that the Landlord had not performed work properly, the Tenant had signed an estoppel certificate that recognized the contrary, that is, the owner's work had been carried out properly and all the obligations under the lease had been fulfilled. The trial court had concluded, following the analysis of the lease terms, that the work in question had been carried out properly and added the Tenant had confirmed it by signing the estoppel certificate. The court stated that it shared the trial judge's opinion and confirmed that said judge had not committed an error by concluding that the Tenant had signed the estoppel certificate with full knowledge of the evidence, in which it expressly recognized that the owner had complied with all of its obligations and that it couldn't then deny what it had explicitly acknowledged 13.

In light of the foregoing, it is important for tenants to ensure the certificates they sign are consistent with the lease, failing which, they could find themselves in a position in which they have to waive their rights set forth in their lease or even be required to compensate parties who would be relying upon said certificate. Furthermore, the estoppel certificate represents a valid legal document or even an extra-judicial admission by the party signing the estoppel certificate, and this evidence could work against Tenants in the event of a dispute.  


1 René Gauthier, "Les règles générales applicables à tous les baux," in Jocelyne Temblay, coord., Obligations et contracts, Collection de droit 2017-2018, Vol. 6, Cowansville (Quebec), Éditions Yvon Blais/École du Barreau du Québec, 2017, p. 267.

2 1960529 Ontario Inc. v. 2077570 Ontario Inc., 2017 ONSC 5254.

3 Ibid., at para 44.

4 Ibid.

5 Ibid., at para 45.

6 Ibid., at para 73.

7 IMS Health Canada Inc./IMS Santé Canada Inc., v Trans-Edmond Development Inc./Développement Trans-Edmond Inc., 2013 QCCS 5357 and The Forum Entertainment Centre Company v Cinegrand Montreal Inc., 2004 QCCS 1347.

8 Gestion Elm Bishop Inc., v Farias, 2015 QCCS 6545.

9 Ibid., at para 34.

10 Ibid., at para 40.

11 Ibid., at para 73-75.

12 Cinegrand Montreal inc. v Forum Entertainment Centre Company, 2006 QCCA 1579.

13 Ibid., at para 63-65.

About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see

Law around the world

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions