Focus On Real Estate

Extract

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Focus On Real Estate

Estoppels Are No Substitute For Lease Due

Diligence

By: Sonja K. Homenuck

We all take some comfort on the acquisition of commercial real

estate when the purchaser is able to obtain a reasonable number of

estoppels [covering a good portion of the rentable area of the

building(s) being purchased]. But what happens if a tenant asserts

something in an estoppel but the tenant is incorrect? Can a tenant

later take a different position? Or perhaps the bigger question is

can you rely on the statement made in the estoppel? Not if you

could have determined the correct state of affairs from doing

proper due diligence of the lease documentation. This is what the

British Columbia Supreme Court held in a recent case discussed

below. The case also reminds us of the important distinction

between renewals of a lease and an extension of the term of a

lease, and is an important case to consider for anyone involved in

lease due diligence or in dealing with estoppels.

In Vancouver...

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