New laws creating uniform estoppel certificates
There were five (5) bills approved this year by the Florida Legislature affecting community associations.
As of the writing of this article, only one bill had been signed by the Governor, SB 398, that prescribes new detailed information and procedures required to be followed by condos, cooperatives and HOAs in response to request for estoppel certificates. It was co-sponsored by our local Representative, Kathleen Passidomo (representing District 28 – Collier, Hendry and the southeast portion of Lee County). The bill became effective July 1, 2017.
Next month we will review the other four (4) bills assuming they are signed by the Governor and thereby become law.
An estoppel certificate is a document stating what assessments and other monies are owed to the association to be provided to the unit owner or unit owner’s designee or a unit mortgagee or its designee typically when a unit or parcel is being sold or refinanced. Monies are typically set aside at closing to pay the association what is due.
Under the new provisions, requests for estoppel certificates can now be made by electronic means (email) and the association is required to designate an email address for such requests.
The contents of a certificate must include the date of the certificate; name of owner; unit/parcel number/designation; any owned parking spaces; the association’s attorney information (if account has been turned over to attorney for collection); fee for the certificate; name of the person requesting the certificate; amount of periodic assessment with a paid through date; the date of the next installment due; an itemized list of monies owed; a list of scheduled additional or special assessments not currently due; transfer fees; open violations of rules or regulations by the existing owner; whether board approval is necessary for the transfer of the unit/parcel and if so whether such approval has been provided; whether a right of first refusal exists, and if so, whether it has been exercised; contact information for other associations governing the unit/parcel; and contact information for the association’s insurance carriers.
An estoppel certificate remains effective for 30 days from issuance or 35 days if mailed. The charges for an estoppel certificate is limited to $250 but an additional charge of $150 is permitted if the owner is delinquent and $100 for expedited service within three (3) business days. Otherwise, delivery must be made within 10 business days or no charge may be made for the certificate after 10 business days.
In cases where certificates for multiple units owned by the same party are requested, there is a sliding scale per unit/parcel starting at $750 for up to 25 units increasing to $2,500 for more than 100 units.
The new estoppel certificate laws should bring uniformity throughout the community association world when informing interested parties what is owed to an association and thereby assist in quicker and more efficient closings and refis.
