What is the purpose of an estoppel certificate?

An estoppel certificate serves as a formal document that verifies certain aspects of a financial agreement, typically relating to leases or mortgages. Its primary purpose is to confirm outstanding debts and obligations between parties involved in a real estate transaction. By issuing an estoppel certificate, the signing party affirms that the details contained within the document—such as the existence of a loan, the principal amount owed, and any other relevant financial obligations—are accurate and up-to-date.

This confirmation is especially important during transactions where potential buyers or lenders require assurance regarding the financial commitments associated with the property. It helps prevent disputes by providing clear evidence of the current state of debts that need to be addressed during a sale or refinancing process.

The other options listed do not accurately capture the true function of an estoppel certificate. While securing a mortgage and clarifying interest rates may be important in real estate transactions, they do not reflect the specific purpose of an estoppel certificate. Denying the validity of a previous loan is counterproductive to the role of the document, which is to verify existing agreements rather than contest them.