An estoppel certificate provides a snapshot of the fees or assessments that a seller may owe to their community association and is provided by the association or management company when a property is being sold. Prior to this legislation, Florida law allowed associations to charge a "reasonable" fee to prepare an estoppel certificate, obviously that word or number was/is very subjective as some association management companies were charging very "un-reasonable" fees as high as $1700 on a property under $200k.
Many will charge an additional rush fee if the letter is needed before the 15 days, as well as an update fee if the closing is delayed beyond the “good through” date.
The process is further complicated if the homeowner is in collection. A payoff letter must be obtained from the HOA’s attorney and they have 15 business days to provide the payoff and will charge an additional fee.
HB 483/SB 398 caps the fees that community association management companies can charge for estoppel certificates:
- $250 for unit owners who are current in their assessments.
- An additional $100 can be charged for "expedited" estoppel certificates (delivered within three business days), and
- another $150 can be charged for owners who are delinquent in their assessments. This is a maximum of $500 for an expedited, delinquent estoppel certificate.
- also require certificates to be valid for 30 days
- and provide for a standard estoppel certificate form to ensure the same information is provided to owners across Florida.
Now I like the idea of a standardized form, but anytime you give them the option of "can" it automatically becomes "will".
HB 483/SB 398 is now headed to Gov. Scott for his signature. Once the bill is signed into law, it will take effect July 1, 2017.
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