Most owners know that when they want to buy or sell their unit or house that they need to contact the community association, or its attorney, to get an estoppel letter. Both the Florida Condominium Act and Florida Chapter regarding homeowners associations specifically devote sections to estoppel letters a/k/a certificates of assessments. See 718.116(8) and 720.30851. But what does an estoppel letter do, why is is needed, what's required to be in the estoppel letter, and why is it called "estoppel" anyways?.....click through to read on.
First for clarification, Chapter 720 (HOA) refers to this letter as an "estoppel certificate." Chapter 718 (Condo) simply says "certificate." Often you'll hear it called an "estoppel letter." For all practical purposes each is the same thing. I call it an estoppel letter.
What's does an estoppel letter do? The vast majority time it's used to facilitate a closing on a unit or to pay off a debt on the parcel. In Florida associations, unit or parcel owners are jointly and severally liable with the previous owner for debts on the property. Therefore, when somebody buys an association property they need to know how much is owed at a given time so that amount be collected and applied at closing. An estoppel letter is a certificate, signed by either and officer or authorized agent of the association that says what amount is owed through a given date a few weeks or a month in the future. The parties who requested the estoppel can the rely on that letter to know how much is owed through the date stated on the letter.
- EXAMPLE - There's a short sale on a condo unit and the current owner hasn't paid assessments in 2 years. The total amount owed by the owner/seller is $4,000 but assessments keep coming due each month, along with additional interest and late fees. If the buyer were to simply purchase the unit, they would inherit that debt and be jointly and severally liable for it with the previous owner for the entire $4,000. Since the buyer doesn't want that to happen they request an estoppel letter from the association. The request is made on June 15, but they aren't planning to close until July 10. The association would calculate how much is owed through July 10. The association would take the current balance, add July's assessment, plus interest, and late fees and sign that if "$4000 + X" amount is paid by July 10, there will no longer be any amounts owed on the unit until August 1 (the next monthly assessment).
- NOTE - Once that estoppel letter is signed and delivered, the association is bound by that quote. It cannot come back later and say they miscalculated or forgot a month of assessments, etc. Think of it as a temporary promise. On another note, if July 10 comes and goes and the amount isn't paid, in my opinion the estoppel is void and a new estoppel letter would be required.
What's contained in an estoppel letter? Despite recent attempts to create a statutory form estoppel letter, there remains no exact template for what should be contained. The Florida Statues only say 1) it needs to be signed by an offer or authorized agent of the association and 2) stating all assessments owed and other moneys owed on the parcel. However, it's good practice to include the following information:
- name of the association
- name of the unit/parcel owner
- description of the property (legal description is not required but at least the parcel address or unit number.
- Total amount owed to the association
- I typically include one lump sum amount, if they request a break down of assessments, late fee, interest, etc. I will provide a ledger from the association.
- date through which that total amount is owed
- instructions on where to sent payment
- signature of an officer of the association or authorized agent.
Lastly, can a fee be charged for providing an estoppel letter? Yes, so long as the fee is reasonable and "established
by a written resolution adopted by the board or provided by a written
management, bookkeeping, or maintenance contract." The fee is collected upon request for the
estoppel letter. Keep in mind though if requested in accordance with a closing,
and the closing does not occur, there's a mechanism for the requester to get a
refund of the fee. Frankly, I don't understand
the logic behind this refund procedure but it's there. Typically the fee for such a letter is no more than few hundred dollars.
There ya go, probably more than you knew, or ever wanted to
know, about a estoppel letters.
Good information and easy to understand. Thank you.
ReplyDeleteThanks for checking it out.
DeleteThank you Harrison, you notes were very informative.
ReplyDeleteMonica Bisbal
great, glad to hear it.
DeleteIn some property sales there is no debt, especially when the owner has lived in the property for many years, is elderly and just want's to sell his/her property it is free and clear with this owner, and still has to pay an estoppel fee, in case's like that it should be called a rip off fee, because it isn't necessary for them, and besides it benefits the buyer, but has to be paid for by the seller. To me this is very wrong, and should be renamed or get the buyer to pay for this estoppel fee, after all this sounds like an insurance policy to make sure the buyer doesn't get hit with any new fee's after they buy the property.
ReplyDeleteThe buyer is the one who is benefiting with this fee, they should be charged at the closing, not the seller.
The buyers are getting very forward lately, I said not to one buyer who wanted me to pay not only for this estoppel fee, but their VA loan fee's, and the entire closing cost which is over $1,200.00, they walked and I said good riddance. What's going on? I thought that things were getting better in housing, I think that is a bunch of hype put out by the Real Estate industry, but it isn't true.
is there anything that states the estoppel is mandatory ?
ReplyDeleteno, it's not mandatory, but I don't think a lender will close without one. It's the only thing that legally binds the association to the amounts it is owed.
DeleteI have been charged an estoppel fee in an ALL CASH deal, there was no need for this estoppel, but these HOA's are getting used to it, it's money in their pockets and nobody (except me) is complaining about it. In an all cash deal the seller should not be charged any estoppel fee by the HOA, but that is exactly what they are doing, and I can prove it.
DeleteThe Association cannot prevent you from closing on property. If the buyer and seller want to close without an estoppel letter (and there's no financing) then go for it. But if you want a quote from the association for the current assessments owed there's likely going to be a charge for it. I don't see why that's so controversial.
DeleteBrandon said : "The Association cannot prevent you from closing on property". That may or may not be true here in Florida, but I wanted to show everyone how fluid HOA's are here, my son just bought a house this year, and the HOA said they wanted his SS number which he refused to give, so they said it would take an extra 150.00 to get it to close on time 7/1/15 but the seller was on the HOA board, when he found out about the delay, there was no $150.00 charge to my son, or an estoppel letter charge to the seller, and the property closed on time.
DeleteI am selling my Naples FL condo - In my case I had a HOA and a Condo association to get estoppel letters from ($200 and $100 respectively, $300 total!) I had read this page and then told the realtor that an estoppel letter was not needed as I already received statements from GRS Management that showed I had a credit and this was a cash deal, so no mortgage company requiring the estoppel letters. Within minutes the title company (Nobel Title) calls me up up and says the closing is off unless they get the 2 estoppel letters. Their reasoning was that the statement was not official, i.e., in could be fake. I asked her if both I and the buyer would be signing a document claiming that the title company would not be held liable if the estoppel letters missed money owed, and they said "Yes. we would be signing documents like that." But, they explained that they still had to do their "due diligence" and get the estoppel letters to protect the buyer. Because if they don't get the letters they would be responsible for the missed debt! I was stuck and I PAID! I then questioned my HOA/Condo Board asking them if they had authorized the property management company to charge these fees as required by law ,,,still no response! [See The 2015 Florida Statutes 720.30851(3)]
DeleteEstoppel fees are incurred by the association and charged by the management company back to the association. There are several spokes in the wheel that warrant a justify charging for this certificate, largely due to a hard expense being incurred by the association. It's also additional assurance that the association establishes but issuing the estoppel that the new buyer is not being encumbered with past due assessments as this balance would become the responsibility of the new buyer. Very good explanation!
ReplyDeleteProblem with that explanation is that nobody shows the seller at the closing that there are past due assessments, and the seller would like to know if there are any past due amounts at the closing, that's what the closing does it closes out the old owner, and opens a clean new page for the new owner.
DeleteSo the thinking by the association is, just in case someone missed a past due amount (their fault) they will charge you this amount (estoppel could be 75.00 to 200.00) to cover an amount they don't know, is that about right? I didn't say it was right, I said is that ABOUT RIGHT?
Answer is NO. Still a rip off fee !
Thanks so much Mr. Burg. I believe cash transactions between agreeing and informed buyer and sellers need not be required to pay an Estoppel Certificate fee especially when $400 is under the reasonable category. That being said our association has NO written resolution or bylaws on collecting Estoppels and with a copy of the Management agreement in hand, see NO wording given them the right to collect any any fee associated with an Estoppel Certificate.
ReplyDeleteWithout either or of these 2 being in place why should anyone have to have paid a fee up until a change takes place?
Again Thanks,
Zoey
Today I closed on my condo which was in the family for 30 years. I was charged a $400 estoppel fee on a cash deal. When I reviewed the closing paperwork I noticed they were charging me for one month maintenance that was not paid. This was in error because I have had the monthly maintenance automatically withdrawn each month for years. When I called the title company the day before closing, they told me to bring proof that I paid the dues. The next day at the closing I found out the association charged me another $400 to correct the mistake that they made. I was told by the title company attorney "well that's how they make their money. I think this is a scam. I think they deliberately wrote in that I owed money to them knowing I would question it and they could charge me another $400.00. I paid a total of $700 on a cash deal. Is this sort of thing legal? Can the associations just charge whatever they want?
ReplyDeleteCash transaction in a Fanny Mae foreclosed condo with 20000+ past due fees. I understand bank is responsible until day of closing for association fees. Is that tge truth?
ReplyDeleteevery owner (including banks) is responsible for the assessments that come due while they own the unit. If you're talking about past due assessments that gets much more complicated.
DeleteHelped me to understand what occurs when an estoppel is requested. Good info.
ReplyDeletei'm not sure how to answer this. When the letter is requested generally the manager compiles the amounts that are owed, check is there are any other outstanding debts to the association from that owner, and then complete a certificate stating that if X is paid by such a date then the balance will be paid in full. Does that help?
DeleteThat is the problem with this estoppel fee, the manager puts in the amount he or she wants for the HOA at the closing even though all fee's have been paid before the closing, and what hasn't been paid, is paid at the closing, so they are putting this fee in anyway, even though it's common knowledge that all fees have been paid, they do it anyway because they just got used to charging it, and they are getting away with it because nobody challenges it.
DeleteThe buyer needs the property and is waiting to get in, the seller wants to get out with no delays, so they agree with it because they don't want to muddy the water and cause delays, both sides want a clean closing, and the Title company doesn't want this delay either, and if there is a delay, you can expect to wait for weeks to get another closing date and everyone involved knows or understands that, so I stand my original comment I made a while ago, i.e. estoppel fee's are RIP OFF FEE'S.....Period.
Thank you for your website, it helped me create the format I needed for a real estate class for a paralegal program I am taking.
ReplyDeleteThank you for your format in demonstrating how it is done.
ReplyDeleteGreat info !
ReplyDeleteFlorida law prevents HOAs from collecting arrears beyond one year in the past. With the one year arrears paid by the new owner (bank), after foreclosure the owner (bank) owes no arrears. Therefore an estoppel letter ordered at sale by the bank says nothing is owed. However, the HOA declaration has been amended to obligate a new purchaser to be responsible for the past due amounts which the HOA could not collect at foreclosure. This situation is poisoning my purchase of a foreclosed property since I am insisting on a estoppel letter stating what a new purchaser owes for past assessments and fees. The bank wants no part of a dispute.
Brandon......, your thoughts?.
I'm not following the scenario. Send me a message on the contact form and i'll see if I can help you.
DeleteBrandon
Actually, one year worth of Assessment or 1% of original Mortgage balance, whichever is less, pertains only to the banks, that get the property at the foreclosure auction. But it does not pertain to the highest bidder at the foreclosure auction. So, the highest bidder would owe the full amount (together with the foreclosed party, if you sue). Be careful, as the Association can give 30 days to pay it off, and then they can foreclose on the condo.
DeleteHello: Brandon
DeleteI am encountering the same issue as the person above. I'm going to a courthouse foreclosure sale on a home I'm wanting to buy and paying cash for. The bank is foreclosing, The HOA hasn't been paid in over 5 years, Is it true in Florida that an HOA can only collect 12 months past due fees regardless of how much is owed? If not what is the max they can collect? or will the foreclosure erase and arrearage in HOA fees.
Thanks in advance
right, if you're not the bank that you're jointly and severally liable with the previous owner for all past due "assessments." There's disputes over with the term "assessments" includes late fees, interest, attorney's fee, etc. But there's no dispute that it include all the unpaid regular assessments.
DeleteIf you want to realize it or not, the title companies, lawyers, and Realtor's are all insisting that an estoppel fee is included in the closing documents, and that the SELLER of that property pays that fee at closing. If the seller refuses to pay that fee, the title company will say there can be no closing, until the seller accepts the preliminary documents with that estoppel fee included even if all fee's, loans, etc. have been paid before the closing !
DeleteFirst, in real estate sale-transactions, everything is negotiable, therefore, a detailed and properly written contract to purchase should spell out EVERYTHING relating to the purchase and sale of the property! That said, I believe that the party to the transaction that will be getting the benefit(s) and protection(s) of any needed documentation(s), should be the one that pays for any of these documents. It's like any type of protection for vehicle, life, and health, life-insurance; the person that wants and need any of these, they must go out and get it and PAY for the protection. The KISS principal.
ReplyDeleteHello, I would like to know if the situation that Im in a common. I had a closing date for September 30 2014. It was postponed several DOZENS times. It is now January 13 2015 and I still havent closed. I contacted the title company and she is stating she hasnt received an estoppel letter from the bank. Is this a common practice for closing to postpone severals dozens times and an estoppel not being provided in a timely manner.
ReplyDeleteit's very common for closings to get delayed, especially when people wait until the last minute to get all the information needed. Good luck.
DeleteHarrison, we have a welcome plaque attached to our home adjacent the entrance which was approved back in 2004 by the then HOA and enforcing agency (Bristol Management). We now have a new enforcing agency which tells us this plaque, which has been in place all this time, must be removed or we will be fined. We have explained to them the situation but they still insist they have the right to make us remove it. Can they do this, even with such a time lapse? I thought if such an item was in place for 12 months with no objection, it had to remain. Please help us. Thanks in advance. lrfraley125@comcast.net
ReplyDeleteif it was previously approved it would be tough to rescind. Even if it wasn't approved, having it there for 10 years and then trying to get it removed is difficult for the Association. Never heard of the 12 month rule though.
DeleteI would like to know if the State of Florida has a cap on what can be charged for an estoppel letter in Orlando, Fl? My HOA charges $440 when others charged $50. Who keeps this money? Does the HOA or the management company get the money?
ReplyDeleteBrandon, do you ever see this fee going away? I have to agree the seller should not be responsible to pay this fee. Also, it is a fee created by companies like condodocs, not Realtors. Someone is making a lot of money for records that the seller's HOA should be able to provide the seller or the title company at no cost.
ReplyDeleteI don't see it going away, but there is legislation going through this year to try and limit the amounts that can be charged.
DeleteWe closed on a home in FL at the end of Dec 2014. We just now got a water bill left over for the previous owners for $500. It became our bill. The estoppal was done at the end of Nov 2014. Their realtor now told us they had a running toilet in between that time. How long before a closing is an estoppal supposed to be done? Is out title co. responsible (they are not wanting any part of it)? Thanks.
ReplyDeleteThe problem is that the utility company is going to want to get paid. And they might not care that you just bought the property, They are going to collect from whoever the current owner is. I'd pay the bill, so as to avoid an issue with them, then go back after the prior owner if you want to try to recover those amounts.
DeleteHello Mr. Burg,
ReplyDeletewhile purchasing a bank owned condo, the title company requested an estoppel from the HOA and came clear from assessments. when I sold the condo, an assessment appeared on my HUD which was issued and dated before I bought the property but was not overdue. after talking to the person at the HOA who filled the estoppel and failed to disclose the assessment, she acknowledged that it was an oversight from her side but they still wont reimburse me for the money.
I filed a claim with the title company and they also refuted the responsibility to pay the assessment since it was not on the estoppel.
the amount is $4000 and I think it would cost me more than that in attorney fees if I ever want to file a law suite. any suggestions on how to resolve this, and any laws that may protect me of such a thing.
thank you
What if the management company puts an inaccurate amount of past due fees on the estoppel? Can they legally collect from the new buyer if the amount on the estoppel was paid at closing by the seller?
ReplyDeleteno, the estoppel letter is binding on the association. It would not be unreasonable for the buyer to rely on that statement. If letter was not right, that's between the management company and the association.
DeleteBrandon...is an association management company allowed to collect the estoppel fees personally for all associations managed?
DeleteI have been the elected volunteer treasurer of a manatory Florida POA on and off for 15 years and have replied with estoppels to closing companies or agents with our own estoppel form letter. I research the property record for delinquent fees, violations or liens and respond with the estoppel as quickly as possible. We have never charged for this service and have been critized for using our form and have had demands for many different things including only using their form and supplying them with a copy of our Bylaws and Covenants & Restrictions.
ReplyDeleteWe bought our house in 2012. We are now selling it And it's currently under contract. When the title company sent their estoppel, HOA wrote on estoppel that we have an outstanding violation. We found out the previous owner had damaged the driveway during a construction project and they received a violation notice in 2010. On our stoppel letter it shows as NO VIOLATIONS on property signed and dated 2012. HOA president says we still have to fix driveway. We don't have the money to do it . Who is right? Do we have a case? We were never aware of this violation. Damage to driveway is not really noticeable it just looks more rough then the smooth driveways
ReplyDeleteI am selling my property and the Estopel letter fee is $150.00; $100 plus $50 to "rush" it.
ReplyDeleteI have paid in a timely manner all association's fees during the time I have lived in my community. I think the Estoppel Letter should be provided without the outrageous fee since it is part of the association doing business and it is nothing other that checking their records, same they should keep, and provide the letter; that by the way it is a fotocopy; nothing they spend a lot of time doing.
If I paid my dues, why am I being penalized with a fee so it can be proven that I indeed have paid all monies to the association? They should be giving me proof of same, since I have kept a perfect record all along.
And what formula do they use to figure out how much they should charge for such letter? They said is "the standard of the industry", I feel this response is unacceptable. They should at least, charge what it is fair based on the time that takes to get it done.
It is a rip off, unacceptable act for an entity that has the fiduciary responsibility to look after the benefits of its membership.
Chelin, I have sold 5 properties in Florida in the last 6 years, and everyone of these HOA's charge an Estopel fee, that's why I brought this problem up on these posts. I agree that when you pay your maintenance fee's all the time, during the time you owned that property, you should not be charged this fee. They will use the excuse that if somewhere in your passed ownership they missed something, or didn't pay something, they have this Estopel fee to cover the charge. However I think it's just a kick out charge, or a rip off fee like said originally, I started this post, because as a seller I was ripped off 6 times, and you will be as well when or if you sell property in Florida.
DeleteI also believe Fla lawyers are in on it, that's why when I complained to them and the Title company about this fee (another rip off because the Title Co. won't pay for anything, and they should if they find something unpaid) they told me they couldn't find anything wrong with this fee, that's why I called it a rip off fee from the beginning.
Hi Joe,
DeleteI completely agree with you calling it a rip off. It goes even further, when I contacted the HOA and they denied any responsibility saying that since the HOA does not charge the fee; then they are not responsible or involved at all. I said to them, that since the HOA hires the management company (who charges the fee, for the amount they wish) at the very minimum they should negotiate the fee along with everything else when they are entering into a contract for managing the community. I stated that I can "shop" for a Title Co., a Mortgage Co., and just about everything else involve in the real estate transaction; except for the management company; thus It is imposed upon me to deal with them and pay what they charge for the estoppel letter. Furthermore, the HOA does not get any money related to this fee, ALL MONIES goes to the management company! Just do the math! The HOA fail to protect our interests when they refuse to get involved, yet they allow the management company to be the exclusive entity to provide the Estopel letter. We all involved in the real estate transaction become hostages of these management companies with the blessing of the HOA!
Hello Brandon...
ReplyDeleteWhat is the order in which the PUD/condo questionnaire and the Estopple letter are to be requested when reselling a condo unit? Are both required for the same transaction? Can the bank request the condo questionnaire through the realtor? How is the process to be more clear? Can the estopple letter be enforced by the association/management company? Thanks!
there's a lot of questions there. There's no specific sequence to the order of these docs. The estoppel letter can be enforced by the association by pursuing collecting of whatever remains unpaid.
DeleteDo the association docs have to stipulate the right to charge for an Estopple letter or a mortgage review form...does the Estopple letter need to be given as close to closing time as possible...since there may be other assessments incurred between the time it takes to selll a property and closing time ???
ReplyDeleteNo, the association can charge a reasonable fee for an estoppel per florida law. Generally the estoppel letter is post-dated. In other words, it will say if X amount is paid by Y date then the association will be paid in full through Y date.
DeleteCan the seller, months after closing, come back to the Association and state the outstanding monies owed documented in the Estopple was the wrong amount and request reimbursement?
ReplyDeletepotentially. The estoppel letter is between the buyer and the association. My thinking though is f the association overstates what was owed that excess would go to the buyer not the seller.
DeleteI am convinced that the money charged to the outgoing seller by the HOA is made up by the HOA, and it was my experience that property I owned in a condo trailer park, the HOA charged me more than a site built house, because I sold a few of them as well.
ReplyDeleteIn the past Title companies would pay any unpaid bills after closing that the seller didn't pay before the closing. These HOA's are making up these Estopple fee's as they go along, and the Title company is agreeing with it because it protects them, in case a bill isn't paid by the seller, plus the Title company has you sign a document at closing that states they can not be held liable for any unpaid bills after closing, and the seller signed it weather he/she is aware they signed it or not.
This is going on even if you think the lawyer you hired will protect you from these fee's, your wrong, everyone is aware of it except the dumb buyer or seller.
If the buyer or the seller refuses to sign any of these documents, there can, or shall be no closing.
I have no idea what you were told as to who gets the money from an Estopple fee, but I was told by my Real Estate broker that the manager of the former HOA I belonged to was charging me and getting the funds. However it really doesn't make any difference who gets the funds when you close a property, it has to come from your pocket, but if all of your back fee's were paid (they know before you close) and as a seller your getting cash from the buyer, there shouldn't be any extra fee's, but this Estopple fee is just to protect the Title company, because I can imagine in the past many of them got burned, so they are charging everyone just to cover themselves, and like I said before they make you sign a document at the closing in the event the seller doesn't pay a past due bill and it got by them somehow, so the Title company doesn't pay anything after the closing, again more protection for the Title company.. Anyway you look at it it's still a rip off fee.
ReplyDeleteThe 2008 change, Notwithstanding anything to the contrary contained in this section, the liability of a first mortgagee, or its successor or assignee as a subsequent holder of the first mortgage who acquires title to a parcel by foreclosure or by deed in lieu of foreclosure for the unpaid assessments that became due before the mortgagee’s acquisition of title, shall be the lesser of:
ReplyDelete1. The parcel’s unpaid common expenses and regular periodic or special assessments that accrued or came due during the 12 months immediately preceding the acquisition of title and for which payment in full has not been received by the association; or
2. One percent of the original mortgage debt.
Does this mean the POA can not collect the 10 year pass due annual fees and interest on a property that is foreclosed.
If the first mortgagee acquires title via foreclosure then yes, the liability of that first mortgagee for unpaid assessments is limited.
DeleteBrandon said:
DeleteThe parcel’s unpaid common expenses and regular periodic or special assessments that accrued or came due during the 12 months immediately preceding the acquisition of title and for which payment in full has not been received by the association; or
"One percent of the original mortgage debt.
Does this mean the POA can not collect the 10 year pass due annual fees and interest on a property that is foreclosed:.
I say that is why we have a title company, they pay when bills aren't completely paid before the closing, but the title company puts a document in front of you (as a seller at closing) that says the Title company is not responsible for anything, when it used to be that any bill that was missed would be paid by the Title company, but with all the foreclosures since 2008 they must have been burned several times, so now they have this document hidden in the documents that the seller has to sign, so look for it, it's there.
The Estopple fee must be paid by the seller or else they can be no closing, and I have said that this fee is a Rip off fee especially when the seller has paid all fee's including any and all prorated fee's, they charge the seller this fee anyway.
I am trying to buy my neighbor's condo but the HOA is attempting to block the sale as the president holds a personal grudge against me . The HOA refuses to issue an Estoppel. Is this legal ? And can I close without the HOA's compliance ( our by laws exempt existing owners from any approval process )
ReplyDeleteNo, 718.116(8) says they have 15 days to issue an estoppel from when it's requested.
DeleteGlad I found this site. Here is my situation. I paid cash for my mobile home here in florida. At closing, I was presented this "estoppel letter" to sign. Not really sure what it was, I went ahead and signed just to close the deal. Since investigating it further, here is my current situation. I am in the process of obtaining a Reverse Mortgage. One of the many documents I had to provide to the lender was the name of who I paid my AMENTY FEES to....not HOA FEES! I do not belong to the HOA here and so HOA fees do not apply to my situation. BUT we do pay an AMENITY FEE every month for pool, etc . I am current on my amenity fees. Unity Land Management spoke to the lender I am dealing with and explained to my loan processor this: Unity Land Mgmt accures "fees accured but not yet billed." These fees go back 18 months. Bottom line.....Most of the fees accured but not yet billed, were fees when I did not even own this property. So now my Reverse Mortage Lender says I have to pay these fees or I don't get my loan as they consider it a Lein. I told her, these are NOT HOA fees. So.....I have an appointment with an attorney to get this convulated mess cleared up before I have to fork out $5,800 or forgo my Reverse Mortage. What a mess I got myself into when I bought into this place. Please pardon my spelling. I am a 70+ senior and so upset at this mess I got myself into. Thank you and God Bless you for any information you can give me.
ReplyDeleteI think you're right to go speak with an attorney about this. Best of luck to you.
DeleteThank you!
ReplyDeleteThank you for any help you can give me.
ReplyDeleteI work at a title company and we got estoppel info from the HOA 10 days ago. The seller now says he just paid the dues. We called the HOA and they are demanding another $150 for another estoppel letter. They won't verbally tell us if they got the check from the Seller even though it has only been 10 days since we got the first estoppel letter. Is that legal?
ReplyDeleteI'm assuming you have a purchase agreement place and a scheduled closing date. Seems like the seller should have paid this at closing. That way it could have all been done at the same time. I'd get the seller to show proof of payment or ask the seller to pay fee for the renewed estoppel.
DeleteIs it a law in FL that all open violations in the estoppel letter should be cured before close? The title company even did not mention that is an estoppel letter so I Inherited all open violations including re-painting outside of the entire house.
ReplyDeleteDid you ever get this resolved? I just went through literally the exact same situation.
DeleteIs it a law in FL that all open violations in the estoppel letter should be cured before close? Not sure if there is a law, check with your attorney, but like I said in previous posts the Title company would pay for unpaid bills after the closing if one was missed. Now the Title has you sign a document that says the Title company is not responsible to pay for any unpaid bills, that should be illegal, but to my knowledge nobody is challenging it.
ReplyDeleteInterested on a solution?
ReplyDeleteOne idea would be for the Title company (insurance issuer) to really cover All possible situations like they used to.
If they charge, for example $375.00 for their policy and HOA wants $125.00 for estoppel letter, then the policy fee should include that. Charge would be $500.00 for the policy or to include their time and effort, they could raise it to include that amount also.
Seller and buyer would both know the policy fee and it would cover all obligations without all this time, confusion and delays.
Then you legal people get together in Tallassee to set maxium charges and design a form letter.
P.S.
Note to Title companies; You have missed an opportunity to increase your income, solve an issue and your company will have more value. $$$$$
Not to mention that your industry as a whole would have a more favorable appeal to consumers.
(The bill payers)
The problem with your solution is...The Title Companies like it the way it is, and the HOA's love it.
ReplyDeleteI have an interesting question. The executor of an estate for a minor through the death of his father was in charge for selling a property. The seller was not in the local area and had to do everything remotely. The seller (executor) signed the owner affidavit and closing agreement stating to the best of her knowledge that all information is true. She has no information in regards to house and any debts or liens against it or any other information. She posted all the information in the local paper in regards to claims against the estate for the appropriate time period and nothing came back. At closing there were no known debts, liens or any HOA payments due. The house did close and funds were released. The house is now owned by someone else, and the title was transferred to the new owner. A couple months after closing, the title company contacted her to state that she owed HOA dues, as there apparently were 2 HOAs.
ReplyDeleteMy question is, who is responsible for the HOA dues prior to closing? What is the responsibility for the title company or the buyer to request an estoppel letter? What responsibility is it of the executor of an estate they have no knowledge about, outside of posting the estate in the paper and waiting for claims to come in?
From my reading it seems to be a grey area and I have yet to find anything in regards to this exact issue.
Can anyone chime in on this?
Thanks
Our HOA (not Condo or Co-Op) is in the process of approving an LCAM contract. Included are mandatory fees to be paid by the buyer/seller: $250 Document Fee, $100 Transfer Fee, and $60 Property Inspection Fee. I understand the Document Fee is the Estoppel letter(amount seems excessive) but the Transfer Fee is for the LCAM to update the owner data base(a few key strokes) and the Property Inspection seems redundant as they are inspecting on a regular basis anyway. The Estoppel letter is a must (except the cost) but the other two fees seem questionable. The HOA documents are silent about any such requirements including an inspection upon sale. Doesn't the Board need member approval for those fees? Thank you.
ReplyDeleteDick G.
Dick G. You asked: "Doesn't the Board need member approval for those fees?"
ReplyDeleteIt seems to me that they would, you should ask them or your attorney if you have one, but if you are a cash buyer or involved as a seller in all cash deal, and all past fee's have been paid on time, and in full plus your property is in Florida, then there should be no fee's.
However the HOA and the Title Company are making sure they don't get stuck with any unpaid bills after the deal is over. The problem I have with that is when they find that all bills have been paid they don't refund any of those fee's, that's why I call it a rip off fee.
The last title company I dealt with showed a document to me that was signed, and it was to protect them from just those unpaid bills.
I always believed that this what the Title company is supposed to be doing, to protect the buyer or the seller, that is what you pay for, but in reality they are protecting themselves from any unpaid bills.
Just take your time when signing, don't let them rush you through it, because they will shove one document after another at you, and you don't know what your signing unless you read everything before you sign them.
Good Luck,
Joe
Florida State Statute allows for an Estoppel fee and set a maximum, as noted below. My issue is that the $100 Transfer Fee and the $60 Inspection Fee are not to carry out actions required by the Title Company for closing and the Statute and our bylaws are silent about such fees. Therefore, it does not appear legal for them to collect such fees.
ReplyDelete"3) The authority to charge a fee for the certificate shall be established by a written resolution adopted by the board or provided by a written management, bookkeeping, or maintenance contract and is payable upon the preparation of the certificate. If the certificate is requested in conjunction with the sale or mortgage of a parcel but the closing does not occur and no later than 30 days after the closing date for which the certificate was sought the preparer receives a written request, accompanied by reasonable documentation, that the sale did not occur from a payor that is not the parcel owner, the fee shall be refunded to that payor within 30 days after receipt of the request. The refund is the obligation of the parcel owner, and the association may collect it from that owner in the same manner as an assessment as provided in this section."
I am selling a townhome in a HOA that is managed by one of the owners. I am selling the property and the title company requested a standard estoppel three weeks ago, which has still not been received. All of the stakeholders have reached out to the individual and all have received multiple excuses. A realtor was told the assessment is 50% higher because of trees that had to be trimmed. The only trees that were trimmed are on the "manager's" property. I am told the transaction can't be closed without the letter and now I fear a large amount which will extort me to pay for the tree trimming or even worse the buyer will find a way to walk because of the large assessment amount.
ReplyDeleteDoesn't the HOA get the $ from estoppel? I was just elected treasurer to our HOA that was just handed over from the developer. The developer had a company doing the bookkeeping and that company has specifically stated that they did not manage the HOA, bookkeeping only. Over several years (it has taken a long time to build the neighborhood), estoppel letters were done differently. I see no evidence of any of that money deposited into the HOA's bank account yet the bookkeeping company withdrew $150 a month as their service fee. Are they allowed to just keep the estoppel fees with no tracking of it? Also, the estoppel for my property stated that fees had to be paid back to 2010 when the HOA began. No other estoppel did this. Because of this, I paid $1440 more than all other homeowners. Some people didn't even pay the full amount in the estoppel letter. Other homes never had an estoppel done and didn't pay the new resident fee. Can the HOA go back and charge for balances that were not paid at closing (that were stated in the estoppel)? Can I request a refund from the HOA for my particular lot? Can the HOA assess the new resident fee onto homeowners from 5 years ago?
ReplyDeleteI have a contract to purchase a condo. The HOA received payment for the estoppel letter but has not provided to the title company. The title company says we can't close without the estoppel letter. Is that specific to the title company or FL statute?
ReplyDeleteEvery title company is going to require that. Florida law says the Association has 15 days to provide the letter. 718.116(8).
DeleteIf you are positive the fee was paid, prove it with a cancelled check or document that shows the fee and is stamped paid, then show a copy of it to the Title Co.
DeleteIf not then ask the HOA for a paid receipt with that fee included, then send it to the Title company.
Your information is very helpful. Question...can I (as the seller) order the estoppels from the HOA myself instead of the Title company ordering them? In my case the title company uses a 3rd party to order the estoppels because the title company says the title insurance industry "forbids title agents from paying for estopple fees in advance of closing. The insurance commission has determined that to be an illegal inducement!" Therefore, this 3rd party company charges $79 ea to obtain the certificates (in my case there are 2) on top of the association fees for these two estoppels (which totals $400). I figure if I can order them I can at least save the almost $160 3rd party charge.
ReplyDeleteI have a question. As a first time seller(trustee) of a condo in Florida residing outside of Florida, after being told to sign and send in (overnight) all requested paperwork from title company and title company ordering "estoppel letter" which cost $350! (HOA charges $250 within 15 days, $100 extra within 3 days), was not told of this beforehand, only to have the closing not go through (even after the buyer was approved by HOA). Do all of the charges need to be paid to the title company and does another estoppel letter need to be paid for if there is another buyer? The seller was not at fault for the sale not going through...what should the seller do? I completely agree that the price is a total ripoff!!! By the way, this was to be a cash sale. Also everything was clear, nothing outstanding. Title company was the one that real estate broker uses...
ReplyDeleteWhen my father died in Nov.2015 his condo passed to my sister and me without incident as we were on his Ladybird deed since 2013. The President and management company did not require any kind of fee or background checks because we have been coming here for 28 years, etc.. Now I am paying my sister cash for her half of the condo. My lawyer said I do not need to pay any estoppel fees, but after reading the above blogs I want another opinion. Since we are already on the deed and there are no new buyers I would think not. What is your opinion? Thank you.
ReplyDeleteThere's no requirement to get an estoppel letter. You're just not going to have any legal assurance from the Association on how much is owed. If you're doing a cash transaction and you either know what's owed to the association or are willing to accept the risk that something is owed then don't get an estoppel letter.
DeleteAs a real estate broker, I don't mind telling the buyer there is a fee involved for the estoppel and/or the FAQ from the lender. My issue is the amount of said fee. Someone needs to justify a 360 dollar fee for less than an hour's worth of work, likely provided by an assistant to be signed by a manager/president. I believe 100 dollars per form is more than adequate remuneration to the entity. Unfortunately, the Florida legislature seems to side with the HOA's. Not sure why.
ReplyDeleteI respect your point but there are two sides to this issue. On one hand it does seem like a lot to pay the HOA $360 for a estoppel saying that nothing is owed. However, I frequently get estoppel requests where the amounts are in dispute, or they want information about voting rights and use rights. Also, I get requests where they are closing "tomorrow" and need the letter today. So, it's hard for me to say that $360 in inherently too much.
DeleteI have a couple of questions regarding HOA's and closing on a house. I am planning on selling my house in a few weeks and I don't want my issues with the HOA impeding the sale. I am completely paid up in all of my dues, but because this particular HOA has nothing better to do than complain about grass in a flowerbed, I have received several letters basically ordering me to remedy the situation. I did the best I could, but I continued to receive letters, including some from a law firm that now wants me to pay legal fees.
ReplyDeleteI checked Orange County Court records and nothing has been filed against me or my property, so my question is if the HOA can block my sale due to these "violations" and legal fees they are trying to collect. Thanks
I am trying to sell my condo and the association is now saying I was never approved. Of course I was, I hat to pay an application fee, obtain a police report and meet with the association members. The problem is, the association has changed so many times and it's been 14 years now.. They are asking me for a copy of the estoppel letter. I don't have a copy of it however, I found the police report they required for me to obtain back then.. I cannot get my hands on a copy of the check I paid for the application fee as the banks only retain records for 7 years. They are now requiring that I go through the approval process all over again after 14 years! Are they allowed to do this?
ReplyDeleteI have close situation. I was approved as buyer in 2013 but seller suspended the sale and agreed to close in 2016 only. Association required me to pass application process again and I did not agree based on foregoing reasons:
Delete- Association governing docs. (declaration, bylaws, R&R) should include the provision concerning possible actions of the Board if condo is sold without approval (Florida Statutes have no such provision). That is why Association can choose any action based on it's documents. If they do not act (before they act) - you are legal owner and you have all the rights of the owner.
- According to FS 718.116 (8) condominium association shoul provide certificate (estoppel) within 15 days and there is no any excuse.
What would happen, in your opinion, if estoppels were signed, money sent, but the agency/HOA never cashed the checks? Who bears the burden in this circumstance?
ReplyDeleteIf the letter was signed and money was tendered then I think the Association is bound.
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ReplyDeleteI am a Real Estate Agent representing a Buyer in a REO Sale.
ReplyDeleteThey insist my Buyer check line #181 in the Florida Far-Bar Contract for Residential Purchase. The HOA Assessments are over $25,000. The Listing Agent claims that checking line #181 which states Seller shall pay installments before closing and Buyer shall pay installments after closing will only apply to Assessments Outside The HOA.
Should I do Due-Diligence and call all the Utility Companies before submitting this Offer?
Thank You
I have never, ever checked this Box before. I do not want Bills coming to my Client after he Closes on the Property.
45 days after my buyer closing on his home he receives a violation letter from the HOA. How is it they can issue an estoppel letter 45 days ago with no violations and now decide there are violations after he has closed? He was told I should have know these could be possible violations. Isn't that the purpose of getting an Estoppel Letter?
ReplyDeletesorta, this should have been covered in the purchase agreement for the property.
DeleteI sell my condo in Palm Beach and COA provided wrong amount due in estoppel letter. Association included 38100 attorney fee that previous owner (NOT me) has to pay them because he lost in Small Claims Court. They say that there is "debt on the Unit" despite it is debt of previous owner (not mine) and even there is no judgment against previous owner - they only filed motion and hope to get it.
ReplyDelete- How can I compell the Condominium Association to provide correct estoppel;
- may I recover 38100 later if I pay (I would like to close without delay).
I'd need to see the court docket and documents. Yes, there is a way to compel an estoppel letter but it involves filing a lawsuit.
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ReplyDeleteIs there reasonable cause for a home seller to sue the HOA if it provided an Estoppel Letter with a claim for fines (due to violation of HOA rules) that turns out to have been rendered moot by a (claimed) statue of limitations on recovering those fines? The Letter was provided in good faith in accordance with the HOA by-laws by the board, which was not aware that there was any Florida statute limiting the duration for which such fines could be kept "on the books" (the homeowner ignored requests for payment for several years and the by-laws provided no means to compel payment -- not even late fee assessments -- short of filing a lawsuit, for which no other homeowner wanted to incur the legal expense. Nevertheless, the homeowner is now suing in small claims court, saying that the Estoppel Letter was "knowingly" inaccurate and this apparently somehow damaged him (he did not elaborate in this regard, and his lawyer informed the board immediately after receiving the letter than the claim was uncollectible, at which point the HOA provided a new Estoppel listing no fines but only the outstanding last year's dues, such that the homeowner was able to close on his sale in any case.
ReplyDeleteI'm in the final stages of closing on a house on Florida. The HOA has issued an estoppel letter citing minor violations, with no monetary fines. The sellers want me to sign accepting the violations. I would rather not even though they are minor. We're very close to the closing date. They are saying I'm the one delaying the closing because the violations are not going to prevent the house from closing. If that were true why would I need to sign off on it? If they cannot get a new estoppel letter clearing the violations by the contract date, can they keep my earnest money deposit if this deal falls through?
ReplyDeleteI'm in the final stages of closing on a house in Florida. The estoppel letter came back with minor violations but no monetary fines. The sellers want me to sign accepting the violations because we are very close to the sale date. I would rather not accept any violations. The sellers are saying I'm the one delaying the closing because the violations are not serious enough to prevent closing. But if that were true, why do they need me to sign off on it. If this deal falls through because they cannot clear and obtain a new estoppel letter can they keep my earnest money deposit?
ReplyDeleteI closed on my first home in Florida back in August of 2015. At that time, the HOA issued an estoppel that stated the seller had a positive account balance of nearly $1,000. Based upon that estoppel, I was required to "buy" this credit from the seller at closing by paying the seller the amount of the credit. Over a year later, in November of 2016, I received a letter from the HOA saying that I now owe them $250.00 due to an accounting error that they made on the seller's account back in April of 2014 (16 months before I purchased the home from the seller). At that time, the HOA had incorrectly applied another party's $250.00 quarterly payment to the seller's account, which increased her positive balance to nearly $1,000.00 (when it should have only been approximately $750.00). In response, I recently sent a certified letter back to the HOA informing them that I have met all of my financial obligations to the HOA and formally requesting that this charge be removed from my account. I substantiated my position by using the following facts; (1) I had a signed estoppel from them at the time of closing showing the seller's positive balance, (2) as evidenced by my HUD-1 form, I already paid the seller for the full positive balance represented on their estoppel, and (3) since closing, I have made all of my required quarterly payments on-time. I included a copy of the estoppel, my HUD-1 form, and copies of all the cancelled checks from my quarterly payments since closing. Based upon this, do you think that I am liable for this $250.00 charge the HOA just placed on my account due to their April 2014 accounting error?
ReplyDeleteIf you closed on this property over a year ago and they are looking to collect money from you now? I would them them to pound sand, you are closed on this property, they have no rights what so ever to collect anything from you, and I'm sure they can't get anything from the buyer either....
ReplyDeleteI know of a situation where I live now where the association inspected the property before the closing but didn't notice the brick paved driveway had been painted, they just missed it. They could not go after the former owner because the property was closed..........I would just ignore it.
Principal Title company here in orlando said the estoppel fee was passed into law and MUST be paid at closing by the seller. They are not willing to take a ledger letter from HOA to show you are paid in full (or more than in full) for your HOA fees. But for some reason I read in 2016 there was a law to change things where the seller could get the estoppel themselves at a reduced rate.
ReplyDeleteCan you do an estoppel request on a website somewhere if your HOA management company does not do.
ReplyDeleteHow do you like the new HB 483/SB 398? I do not understand whey fighting for so long to produce this little result. So now they can charge $250 for an Estoppel letter, but they can add $150 if there is a delinquency. And then another $100 if you need expedited.
ReplyDelete$500. Isn't it simply crazy? The fact that some companies charged more is not a good reason to allow now the management companies to rip people off. It takes 10 minutes to put it together.
To tell you the truth, the management is interested in having it all done right so that the Seller pays what s/he owes, and why not this is the obligation of the management company to provide and provide for free?
Also, what does the fee have to do with whether there is a delinquency or not? More work? Why. They do the balance, so no, they do not have to go all the way back, their software is showing them the balance for a particular date. I did not read the HB 483/SB 398 itself and do not know whether there is time limit for regular Estoppel letter preparation, but if not, the management would be using longer time to force people pay extra $100 to "expedite". In the era of computers, why 3 days is considered "expedited"?
I am scheduled to close on or before june 30. The title company wants to request the estoppel letter now bc it is possible we may close by the end of the month but I am concerned if we dont close it will not show the June HOA fees as paid and then I will have to pay the $300 estoppel fee again. Obviously I dont want to pay the HOA fees for june if we close earlier. How does this work?
ReplyDeleteIf you are a cash buyer, you can ask that you close on July 1st so you don't pay those fee's for June, on the other hand if your taking a loan for the house your at the mercy of the Bank, and the closing company they usually sett he closing dates. If you have an attorney working for you he/she should be doing this closing in your interest, some will some won't, but you will have to ask, to see if they will or won't.
ReplyDeleteI was a seller on a condo, the HOA made a mistake on the estoppel and left off a special assessment. The title company at closing did not deduct this amount from the sale proceeds. I was contacted after the transaction closed and asked to pay the special assessment off or face legal action. Am I responsible to pay this amount?
ReplyDeleteThat's what the title company is paid for, i.e. get any unpaid bills before the closing, tell them they have to pay it, that's what you paid for in your closing costs. They are trying to get away without paying that bill, don't let them do it, don't pay it, tell them it's their responsibility.
ReplyDeleteI have no idea, check with your lawyer or title company, that's what you paid them for. Don't pay anyone until you know where the money is going, and what it's for.
ReplyDeleteIf you already closed and they are still looking for you to pay someone, don't when the closing is over it's like they closed the door, the Title company pays for any unpaid misses, or mistakes.
I live in Florida and my association has added to the estoppel letter charges to correct lawn, paint mailbox, change bottom part of the garage, etc. This was in excess of $4,000.00. Can they legally add all theses charges to the Estoppel, or just fees and fines, if any?
ReplyDeleteI live in Florida and I am about to close a cash deal as a seller. The association issued an Estoppel including charges to fix the grass, paint fences, fix driveway, etc. Can they legally do that? Aren't estoppel for late fees and fines? Can they also recommend vendors to do the job?
ReplyDeleteThey can get the seller to fix what is needed or not attended to while the seller was the owner and didn't do it, but I don't think that has anything to do with the estoppal letter, that's a separate issue which is done with the closing paperwork.
ReplyDeleteI'm not a fan of the estoppal rip off fee, I'm sure it wasn't part of the closing documents years ago, but now it is, & if you want your property to close, most sellers do, some Title companies make you agree to the estoppal fee, & a document that takes any liability for missed or unpaid bills that the Title company would be responsible for by getting the seller to sign some of the closing documents before the closing date.
That document will take any unpaid bill that they missed, and make you pay for it, because you signed a document you had no idea of it's contents, make sure you know what your signing, take your time don't let them rush you into signing, get a lawyer if your not sure, & make sure he/she is working for you & not the Title company.
The condo estoppel letter states there is nothing assessed and no special assessments. However the seller owes the condo for a loan to pay for a special assessment. The payments are lumped into the maintenance fee as one figure. I have paid this amount for over a year and am told I am obligated to pay it until 2025. I should not have to pay for the seller's loan. It should have been disclosed before closing and wasn't
ReplyDeleteI moved in to a condominium with an Estoppel Letter. Three weeks later, I was told in a casual conversation with the property manager, that I will be facing a special assessment of $4,000, due to a construction issue on the property. All owners were notified a year ago. Do I have any recourse to collect this assessment from the previous owner or the property management company ? I was interviewed by the property manager the day before my closing, I suppose to see if I was worthy of the property. He mentioned the construction, but never mentioned the 2.5 million dollar shortfall that the owners would be assessed on. This project is a 2-year venture that was originally intended with a special assessment to the owners. Please advise. My email is cocchi2@msn.com.
ReplyDeleteHow many days is the Florida HOA review period on a new home purchase?
ReplyDelete