Estoppels and SNDAs in Plain English: What Each One Actually Does

By Cole Borror · Director of Acquisitions, Sierra Capital Club · Reviewed September 2026

The short answer: An estoppel certificate is a signed statement, usually from the tenant, confirming the facts of the lease as of a date: rent, term, options, deposits, defaults, and claims. An SNDA (subordination, non-disturbance, and attornment agreement) is a three-way deal among tenant, landlord, and lender about whose rights survive a foreclosure. The estoppel confirms present facts. The SNDA allocates future rights. Neither replaces reading the lease.

In this article

1. Why the closing checklist suddenly needs two more documents
2. The estoppel: a signed lease fact check
3. The SNDA: three promises in one acronym
4. What each party is trying to protect
5. The estoppel errors that change value
6. A worked closing discrepancy
7. The SNDA provisions that matter after foreclosure
8. One clause, three perspectives: successor landlord liability
9. A buyer's closing workflow
10. FAQ

Why the Closing Checklist Suddenly Needs Two More Documents

The lease says what everyone agreed. The estoppel says what the parties can still claim.

You are buying a single-tenant building. You have the lease, every amendment, and a rent ledger. Then the lender's checklist arrives asking for a tenant estoppel and an SNDA, and closing now depends on a tenant who has no particular reason to hurry.

The reason both documents exist is reliance. The lease file you were handed may not include the side letter that granted two months of free rent, the unresolved roof claim, the deposit the seller forgot to disclose, or the verbal accommodation the last property manager made. The estoppel makes the tenant put the current facts in writing so you and your lender can rely on them. The SNDA exists because your lender needs its own arrangement with the tenant for the day it might own the building instead of you.

One line to keep: the estoppel confirms present facts; the SNDA allocates future foreclosure rights.

The Estoppel: A Signed Lease Fact Check

An estoppel certificate is usually signed by the tenant for the benefit of a buyer, a lender, and their successors. The word comes from the legal doctrine that once a party makes a statement and someone else reasonably relies on it, the party is "estopped" from later claiming the opposite. The effect depends on the wording and on state law, but the practical result is that a tenant who certifies "no defaults, no offsets" will have a hard time claiming a $40,000 landlord default six months after you close.

A typical estoppel confirms the parties and premises; the commencement and expiration dates; renewal, purchase, and termination options; current base rent and the next scheduled increase; prepaid rent and security deposits; the list of amendments; whether either party is in default; any offsets, credits, or claims the tenant asserts; and whether landlord work is complete. Sheppard Mullin's Commercial Landlord-Tenant Practice guide includes a detailed checklist of the items a well-drafted certificate covers.

What it is not: a substitute for a lease abstract or a legal review. The estoppel does not tell you what the lease says. It tells you what the tenant believes is true right now, which you then test against the lease, the ledger, the amendments, the seller's representations, and what you saw on the site visit. Discrepancies are the product. A clean estoppel that matches everything is reassurance. A dirty one that does not is information.

The SNDA: Three Promises in One Acronym

An SNDA bundles three promises among the tenant, the landlord, and the landlord's lender.

Subordination. The tenant agrees its lease sits behind the lender's mortgage or deed of trust in priority. Without this, a lease signed before the loan was recorded could be senior to the mortgage, which lenders generally will not accept.

Non-disturbance. In exchange, the lender agrees that if it forecloses, it will not terminate the lease or disturb the tenant's possession so long as the tenant is not in default and meets whatever conditions the SNDA states. This is what the tenant is actually getting.

Attornment. The tenant agrees to recognize the foreclosing lender, or whoever buys at the foreclosure sale, as its new landlord and to keep paying rent to that party.

The trade is symmetrical. The lender gets priority and continuity of rent. The tenant gets continuity of possession. The landlord gets a property it can finance. Poyner Spruill's overview explains the lender's perspective well: a stable, subordinated lease with an attorning tenant is what makes the collateral worth lending on.

A full SNDA usually goes further than the three core promises, addressing notice to the lender of landlord defaults, the lender's right to cure, where rent gets paid after a lender notice, treatment of prepaid rent and deposits, casualty and condemnation proceeds, which lease amendments bind the lender, and how much liability the successor landlord takes on for the old landlord's sins.

What Each Party Is Trying to Protect

Three things follow from the table. A national tenant's "standard" estoppel form is not neutral; it is drafted to preserve the tenant's claims and limit what it certifies. A lender's "standard" SNDA is not neutral either; it can add waivers and limitations on successor liability that the lease never contained. And the business question is never who drafted the form. It is which rights the document confirms, which it changes, and which it waives.

The Estoppel Errors That Change Value

These are the discrepancies that matter, roughly in the order I see them.

A wrong expiration or option date, which can move a "15-year lease" to a 12-year lease and the cap rate with it. A missing amendment or side letter, which is the single most common way an income stream turns out to be different than modeled. An uncredited security deposit or prepaid rent that the buyer now owes the tenant. An incorrect rent commencement or escalation date. A blanket "no defaults" statement sitting on top of an unresolved repair, offset, or co-tenancy claim that the tenant's real estate department knows about and the store manager who signed did not. Certification "to tenant's knowledge" of things the tenant has no way to know, which weakens the certificate without anyone noticing. And, in the other direction, a lease provision that deems the estoppel accepted as drafted if the tenant misses a ten-day response window, which sounds like a buyer protection until you realize it also means a rushed or wrong certificate can become binding.

The buyer's move is to make material estoppels a closing condition, and to define in the purchase agreement what "material" means and which exceptions are acceptable. Demanding a cosmetically clean form is the wrong goal. A clean form that hides a real issue is worse than a marked-up one that surfaces it.

A Worked Closing Discrepancy

Hypothetical. The seller's lease abstract shows ten years remaining, $120,000 of annual rent, and no offsets. At a 6.5% cap, you are under contract at roughly $1,846,000.

The tenant's estoppel comes back with three exceptions. There is a Second Amendment the seller never delivered, which extended the term two years in exchange for a $30,000 tenant improvement credit that has not been paid. The tenant disputes the rent commencement date by 60 days, which it says entitles it to two months of rent credit. And it notes an outstanding roof leak the landlord was asked to fix in the spring.

None of this is fatal. It is a menu. The $30,000 TI credit is a dollar-for-dollar liability you can take as a price reduction or have the seller pay at closing. The commencement dispute is worth about $20,000 and can be escrowed pending resolution or negotiated into the credit. The roof leak is a seller cure item with a holdback if it is not fixed by closing. The extra two years of term are actually good news for you, and possibly worth more than the credits cost. Your lender will need to see the amendment and will want the SNDA to reference it.

Two lessons. A dirty estoppel is not a reason to walk; it is a reason to reconcile. And a clean estoppel would not have told you about the amendment either, if the tenant had been sloppy. The reconciliation, not the certificate, is the diligence.

The SNDA Provisions That Matter After Foreclosure

If the property is mission-critical to the tenant, or if you are the buyer whose lender is imposing the form, these are the provisions that decide whether the SNDA protects anyone.

Non-disturbance should be conditioned on tenant performance using objective language, not on the lender's discretion. The tenant's negotiated rights, including renewal, expansion, purchase options, offset, abatement, casualty, and condemnation, should be expressly preserved or the SNDA can quietly strip them. Limits on the successor landlord's liability for the prior landlord's defaults, unreturned deposits, prepaid rent, and unfinished work should be understood by everyone, because that is where money actually changes hands after a foreclosure. The lender should get notice and a reasonable cure period for landlord defaults, but not one so long that the tenant is stuck for a year with a broken HVAC and no remedy. Rent redirection after a lender notice should be clear, including what the tenant does if it receives conflicting demands. Permitted lease amendments and assignments should remain effective against the lender, or every future amendment needs lender consent.

For a site the tenant cannot afford to lose, get the executed SNDA, not a landlord's promise to request one. A promise is not a document.

One Clause, Three Perspectives: Successor Landlord Liability

The most negotiated paragraph in an SNDA is the one limiting what the lender, as successor landlord, is liable for. It is technical on its face and expensive in practice.

From the lender's side, it does not want to inherit the old landlord's unpaid TI allowance, the security deposit the old landlord spent, three months of prepaid rent it never received, or a rent offset the tenant earned against a prior owner. So its form says the successor is not bound by any of it.

From the tenant's side, every one of those exclusions is money. A tenant that negotiated a $200,000 allowance and gets foreclosed on before it is paid has, under the lender's form, lost $200,000 with no recourse except a claim against a landlord that just lost the building.

From the buyer's side, if you are financing the acquisition, the SNDA you are asking the tenant to sign is the one your lender drafted. A sophisticated tenant will push back, and the pushback can delay closing. If you are buying a building where a prior lender's SNDA is already in place, read its successor liability language to understand what rights the tenant may or may not be able to enforce against you.

A Buyer's Closing Workflow

1. Abstract the complete lease file before you send any forms. You cannot spot a discrepancy against facts you have not organized.
2. Identify what the lease requires: the form, the delivery deadline, any deemed-approval language, and who is permitted to rely on the certificate.
3. Pre-fill only verified facts and leave room for exceptions. A pre-filled "no defaults" you want the tenant to rubber-stamp is an invitation to a bad certificate.
4. Send early, through whoever has the tenant relationship, not on the eve of closing. National tenants routinely take two to four weeks.
5. Compare every returned answer line by line against the lease and the ledger.
6. Resolve discrepancies through amendment, seller cure, escrow, price adjustment, or documented acceptance. Put the resolution in writing.
7. Coordinate the final SNDA with the loan documents and record it where local practice calls for it.
8. File executed originals with the lease administration file. The next buyer will ask for them.

The step I see skipped most is four. Buyers send the estoppel request when the lender asks for it, which is usually two weeks before closing, and then a 45-day 1031 identification window or a rate lock turns a slow tenant into a crisis. The estoppel request should go out the day the inspection period starts.

One Confirms the Income, One Protects Its Continuity

An estoppel tells you whether the lease in your underwriting model is the lease the tenant recognizes. An SNDA tells the tenant and the lender what happens if ownership changes through foreclosure. Neither is routine when the rent is the asset. Read the estoppel for hidden facts and the SNDA for transferred rights.

What the lease obligations are in the first place is the subject of what a NNN lease actually is. Who is promising to pay them is covered in corporate vs. franchisee guaranty. And if you are closing on a deadline, the 1031 exchange timeline explains why these two documents belong at the start of diligence, not the end.

Frequently Asked Questions

Who signs an estoppel certificate? Usually the tenant, at the landlord's request, for the benefit of a buyer or lender. Landlord estoppels also exist, typically requested by a tenant's lender or a buyer of the tenant's business. Guarantors are sometimes asked to sign a confirmation that the guaranty remains in force.

Can a tenant refuse to sign an estoppel? If the lease requires one, refusal is generally a lease default, and many leases deem the landlord's draft accepted if the tenant does not respond within a stated period. If the lease is silent, the tenant has no obligation to sign, which is why the estoppel clause matters when the lease is drafted.

Is an SNDA required for every lease? No. Lenders typically require SNDAs from major or single tenants and skip small tenants. Whether a tenant is entitled to one depends on its lease; many national tenants require non-disturbance as a condition of subordinating.

Does non-disturbance protect a tenant that is in default? Generally no. Non-disturbance is conditioned on the tenant not being in default beyond applicable cure periods. The exact wording of that condition is one of the most important things to negotiate.

Related reading in this series

• What a NNN lease actually is, and the different kinds of commercial leases
• Cap rate is not a return: what it actually tells you
• Corporate guaranty vs. franchisee guaranty: what you're actually buying
• Nine ways a net lease deal actually gets done
• Sale-leasebacks from the operator's side of the table
• PropCo/OpCo separation: an operator's guide
• The 1031 exchange timeline that kills deals
• How to underwrite a c-store net lease

About the author. Cole Borror is Director of Acquisitions at Sierra Capital Club, a Dallas-based net lease investment and development firm. He works on NNN and NN acquisitions, build-to-suit development, sale-leasebacks, and operator partnerships. Connect at coleborror.com.

This article is for educational purposes only and is not legal advice. The effect of an estoppel certificate or SNDA depends on its wording, the lease, the facts, and state law. Consult a commercial real estate attorney in the property's jurisdiction.