Realtor® Attorney Joint Committee

REALTOR® ATTORNEY JOINT COMMITTEE What To (And Not To) Expect From An Estoppel

By: Douglas G. Christy, The Law Office of Douglas G. Christy, PLLC

When dealing with estoppel certificates requested from a community association (either a homeowners’ association or a condominium association), knowing what the association is required by law to provide and what additional information or documentation a buyer may want, which the association is not required by law to provide, is the key to knowing how, and from whom, a buyer can get the desired information or documentation.

The Homeowners’ Association Act (Chapter 720, Florida Statutes) and the Condominium Act (Chapter 718, Florida Statutes) were both amended recently to codify the substance, timing, fees, and other issues related to estoppel certificates provided by community associations. These details are explained in greater detail below, and the specific requirements are found at Section 718.116(8), Fla. Stat. and Section 720.30851, Fla. Stat.

FLORIDA STATUTES

First, it is important to know that an association is not required to answer any questions or provide any information or documentation other than what is required by statute. The statute generally requires an association to provide information about assessment amounts due for the current year, the outstanding balance due to the association for the parcel or unit, information about any planned special assessments, insurance information, and any outstanding violations related to the parcel or unit and its owner(s).

Associations will generally decline to provide any additional information or documentation, even if requested, either because they want to avoid the risk or potential liability, or don’t want to spend the time to do so when there is no requirement. For this reason, it is important for buyers (or their lenders) to know what additional questions or information and the documentation they might want to have from the association that is not required by the statute and, if any, to obligate the seller to obtain or provide responses to these additional questions or information, and documentation. Sellers, as current members of the association, have additional rights to procure this information from the association and if the seller will not be obligated to do so by the buyer under the contract, then the buyer should not expect it to be provided.

ESTOPPEL FEES

The fees permitted to be charged by an association for an estoppel certificate are payable by the requesting party and are prescribed by statute. A fee of $250 may be charged when there are no outstanding amounts due, an additional $150 may be charged when there are amounts due, and an additional $100 if the estoppel certificate is requested to be provided on an expedited basis, in which case the estoppel certificate must be provided within three business days. While there are fees that can be charged by an association in connection with accessing the official records of an association, those fees are due by the seller (i.e., the owner or member) and depend on the volume of records accessed and the time involved. Accordingly, buyers expecting this information or documentation to be provided to them by the seller should expect to reimburse the seller for the expenses the seller may incur. •

This article is not intended to serve as legal advice, is disclaimed as such, and should not be used as a substitute for consultation with an attorney.

Douglas G. Christy is a Board Certified Specialist in Condominium and Planned Development Law and practices community association law and real estate law in Sarasota, FL.

ESTOPPEL CERTIFICATES

documentation that may be requested by, or required to be provided to, the buyer. Associations have ten business days to provide the estoppel certificate once the request is received. Owners can also generally obtain access to the official records of the association within ten working days of making a request to access them, but since it would likely take longer for the information or documentation to then be provided by the owner to the buyer, or because the access cannot be coordinated within the ten working days’ time period, buyers should expect that sellers may need additional time beyond the ten working days’ time period to be able to provide the required information or documentation to them. The lifespan of the estoppel certificate versus the information or documentation that may be provided by a seller may also impact from which source the buyer chooses to obtain the information or documentation. Estoppel certificates are good for 30 days (if provided by hand-delivering or electronic means) or 35 days (if sent by regular mail) from the date of issuance. Information or documentation that may be provided by a seller would only be valid as of the time that they provided it, and there is no statutory obligation on owners to update or supplement this information or documentation, so sellers should be somewhat warier of information or documentation provided by a seller, then they should be of an estoppel certificate from an association.