Florida Estoppel Reform is Finally a Reality

After a three year run through the Capitol halls in our state’s capital, Florida estoppel reform is finally a reality.

The estoppel certificate is a letter required in just about every real estate transaction involving a condominium or homeowner’s association.  The certificate is intended to provide pertinent information to the buyer.  The buyer will need that estoppel certificate to confirm the current status of the pending assessments and violations with the property the buyer is purchasing.  The issuance of the estoppel certificate is also a common condition in the Florida Realtors/Florida Bar Contract.  Most title companies will also request an estoppel certificate to ensure that the buyer is aware of any pending financial concerns with the property.

There were two issues that created the need to institute estoppel reform.  First, the lack of uniformity as it relates to the charges associated with the issuance of estoppel certificates.  Some homeowner’s associations charged exorbitant amounts of money to generate additional fees.  The second was the lack of uniformity as it relates to the content contained within the estoppel certificate itself.  So some associations were not only charging excessive fees they were also failing to provide the necessary information required by the estoppel.

The HOA/COA estoppel certificate reform, signed into law by Governor Scott, brings uniformity and clarity to those two issues.  The law now provides for a cap in the fees an association may charge for the estoppel certificate.  The fee cap is $250 for owners who are current on their assessments.  An expedited fee of up to $100 can be charged if the estoppel request asks for delivery within three (3) days.  An additional charge of up to $150 can be charged if the owner/seller is delinquent on the assessments.

The law not only provides for uniformity as it relates to the charges associated with the issuance of an estoppel, but it also provides for a standardized form related to the issuance of the estoppels.  Thanks to the hard work by our Florida legislators, the days of diverging information as it relates to the issuance of estoppels are over.

This reform package is a win for Floridians and closing agents.  It brings about much needed clarity to the issuance of estoppels.

ABOUT THE AUTHOR.  Hugo V. Alvarez is a shareholder at the law firm of Becker & Poliakoff.  He is the 2017 Dade County Bar Association’s Legal Luminary Award winner.  He was also named to the Best Lawyers in America in Real Estate related litigation.