Understanding The Role of Estoppel Letters in Florida Real Estate

  • 10 months ago
  • Blog

Estoppel letters are commonly known as homeowner’s association (HOA) dues letters or certificates in other states. But in Florida, we refer to them as estoppel letters.

Let’s talk about the role an estoppel letter plays in a real estate transaction and the common fees associated with getting one.

What is an estoppel letter in Florida?

Estoppel letters are part of any real estate closing for a home or condo in an HOA.

It is a letter that documents any current outstanding assessments owned to a condo or homeowner’s association by the seller of the property.

How do I get an estoppel letter?

Your title agency usually makes the request as they investigate the property title. They will contact the management company of the HOA for the estoppel letter.

Is it difficult to get an estoppel letter in Florida?

It all depends on the management company. Some management companies don’t always deliver the letters on time. 

However, an expert title agent will know how to navigate these difficulties.

How much does an estoppel letter cost?

The Florida Department of Business & Professional Regulation (DBPR) put a cap on the cost of preparing and delivering an estoppel certificate in 2022.

You can find all the fees here, but here’s a breakdown of the current fees:

  • A standard estoppel is capped at $299.
  • Expedited fees are capped at $119.
  • Delinquent fees are capped at $179.

Florida law allows for a maximum of $500 for issuing an expedited, delinquent estoppel letter from just one association. 

Just be aware that even if the delinquent fee due is $1, the management company may still charge the additional $179 for the information.

Additionally, some management companies are now adding an “online misc fee” that ranges from $5 to $50.

How long does it take to receive an estoppel letter?

The management company must deliver the estoppel letter within 10 days of the request. Otherwise, they must refund the paid fees and still produce the letter.

Are there any problems I should be aware of when requesting estoppel letters?

Yes, there are 2 potential problems you may encounter when requesting an estoppel letter for a real estate sale.

Multiple associations

If there is more than one association attached to the property, you will be required to get a letter from each association. 

It’s possible for one property to be connected to 4 associations! 

For example, a condo may be part of a condominium association, property owner’s association, residential association, and foundation association. And sometimes these associations don’t even know the others exist!

So the title agency needs to connect with all possible associations. If an association is missed, this can cause liability issues and thousands of dollars to fix.

Dissolved associations

If an HOA has dissolved and there is an HOA lien on the property, this will still need to be resolved before the property can be sold or transferred.

What if the information is no longer correct on the estoppel letter?

Any changes on the property will need to be reflected in the estoppel letter. So you’ll have to request a new letter to avoid any discrepancies.

A professional title agent will keep on top of this information and make sure everything is done efficiently and effectively to reduce the chance of needing a new estoppel letter.

When it’s time to sell your home, Liberty Title is ready to act as your title agent.

Call us at (772) 335-7474 or send us an email. We’re here to help!

Your Team at Liberty Title Company of America

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