What IS AN ESTOPPEL LETTER FROM A HOMEOWNERS OR CONDO ASSOCIATION?

By Tony Marcucilli | January 18, 2019

An estoppel letter is documentation provided by a homeowner’s or condo association that is required before real estate transactions when an association is present. The essential purpose of an estoppel letter is to discover outstanding balances a seller may owe to the association. For the State of Florida, property owners are liable for debt on the property they wish to sell. Thus, when a buyer is purchasing a property, they must be made aware of any amount owed on the property to ensure outstanding balances are collected and applied at closing. The estoppel letter is signed by an authorized member of the association in which the property is being purchased, typically around 30 days prior to closing.

Estoppel Letters and Title Insurance

When delving into the process of an estoppel letter, it is imperative to understand the role in which it plays for title insurance. At closing, the seller provides the buyer with a warranty deed. The deed warrants the owner has clear title, right to sell the property, and is guaranteed by title insurance. To issue title insurance on clear title, there must not be liens nor outstanding debt, or there may be exceptions on the policy. The estoppel letter is considered a form for payoff made out to the homeowner’s or condo association and is always required for closing. HOA Florida Statute 720.30851 highlights an estoppel letter must contain the following components:​

1. Within 10 business days after receiving a written or electronic request for an estoppel certificate from a property owner, the association must issue the estoppel certificate. The estoppel must be hand delivered, mailed, or emailed to the requestor on the date of issuance of the estoppel.

2. Must be completed by a board member, authorized agent, or authorized representative of the association and is required to contain the following:

     a. Date of issuance
     b. Names of property owner
     c. Property address
     d. Parking or garage number
     e. Attorney name and contact
     f. Fee for preparation and delivery
     g. Name of requestor
     h. Assessment information
         (i)   The regular periodic assessment levied against the parcel
         (ii)  The regular periodic assessment is paid through
         (iii) The due date of the next installment
        (iv) An itemized list of all assessments, special assessments, and other moneys owed on the date of issuance to the association by the parcel owner for a specific parcel is provided
         (v) An itemized list of any additional assessments, special assessments, and other moneys that are scheduled to become due for each day after the date of issuance for the effective period of the estoppel certificate is provided. In calculating the amounts that are scheduled to become due, the association may assume that any delinquent amounts will remain delinquent during the effective period of the estoppel certificate.
     i. Other information
         (i)   State if there is a capital distribution fee, resale fee, or other fee due
         (ii)  State if there is any open violation of rule or regulation noticed to the parcel owner
         (iii) Do the rules and regulations of the association applicable to the parcel require approval by the board for transfer of the parcel?
         (iv) Is there right of first refusal?
         (v)  Provide a list of contact information for all associations of which the parcel is a member
         (vi) Provide contact information for insurance maintained by the association
         (vii)Provide signature of the authorized agent of the association

How Can a Closing Attorney Help You with an Estoppel?

An estoppel letter is an essential element when dealing with the sale of HOA and Condo properties. JK Closing Attorneys orders estoppel letters as part of the regular course of a real estate transaction in order to provide legal assurance for lenders, buyers, and title insurance companies that all assessments, debts, and balances are paid off prior to closing.​