Are you considering purchasing property within a community association in Florida? If so, you might encounter an essential document known as the estoppel letter, or more formally, the estoppel certificate. This blog post aims to demystify this crucial piece of paperwork and explain why it’s indispensable in the real estate transaction process.

What is an Estoppel Letter?

An estoppel letter is a method used by community associations to communicate the amounts due concerning a property. The term “estoppel letter” originates from the equitable doctrine of estoppel, which traditionally conveys the amount claimed due in a letter. This doctrine prevents an association from changing the amounts due pre-closing once communicated.

The Legislative Framework

Historically, both the Condominium and Homeowners’ Association Acts required associations to provide estoppel letters. However, significant legislative changes occurred on July 1, 2017, when the Florida Legislature adopted new “estoppel certificate” legislation. This legislation mandates changes to handling requests, contents of estoppel certificates, and details such as issuance time limits and fees.

Key Provisions

• Designation of Issuance: Associations must designate who issues the certificates and provide contact information.
• Time Limit: There is a 10-day limit for issuance. If an estoppel certificate is not timely issued, the fee is waived.
• Fees: A reasonable fee may be charged for preparation and delivery, capped at $299 if no outstanding amounts are owed. Additional fees may apply for expedited requests or delinquent accounts.
• Effectiveness: Estoppel certificates are effective for 30 days if sent electronically or by hand delivery, and 35 days if sent by regular mail.
• Contents: Specific details must be included, such as assessment amounts, due dates, known violations, and insurance contacts.

Correcting Mistakes

If mistakes are found in the estoppel certificate, they can be corrected if delivered before the closing date, triggering a new effective period.

Refund Provisions

• Refunds: Non-owners may request refunds within 30 days of the anticipated closing date if the sale does not occur, provided documentation confirms this.
• Responsibility: The unit owner is ultimately responsible for reimbursing the association for any refunded fees.

Conclusion

Understanding estoppel letters is vital for prospective property buyers within community associations. These certificates ensure transparency in financial obligations and protect both buyers and associations during the closing process. By adhering to the legislative framework and key provisions, you can navigate your property purchase smoothly and confidently.

Ormond Beach foreclosure defense lawyer

The Law Office of Andrew J. Pascale, P.A., successfully represents homeowners in foreclosure defense and real estate litigation. Contact Ormond Beach foreclosure defense lawyer Andrew J. Pascale at  877-667-1211 to learn how we can help protect your rights. This blog is for illustrative purposes only and does not constitute legal advice.