Management company now charging for estoppel letters

We hired a management company last year and everything went well. Now, it appears that they are charging for estoppel letters and keeping the money for themselves. As a board member, I did not know this until another member mentioned it to me when a friend of hers bought a house in the developement and was charged a fee for this transaction. We never knew the management company was doing this. By what authority can the management company do this and should this fee be given to the HOA? Any advice would be appreciated.

Its your management company, take a look at your contract. Obviously they dont work for free, if you tell them you dont want them charging members for letters, they are going to charge the HOA (which is members) Either way members pay.

Joanne,

As others have pointed out any authority would be within the contract or a change in the contract. I would suggest that your Board review the contact and past minutes of board meetings to determine if they have that responsibility. If they do not have that authority, the Board needs to inform the MC that any requests that falls outside the scope of the contract should be forwarded to the Board for action.

Tim

However, you are only paying them to perform functions within their contract. If creating and issuing estoppel letters are outside of that contract, or for anything that is outside of the contract, they would probably do one of the following:

1) issue the letter but charge the requester for the time
2) issue the letter and charge the Association for the time
3) Pass the issue to the Board
4) Tell the requester to contact the board directly.
5) Inform the Board of these requests and negotiate how the time will be paid for

If it is part of the contract, then the company should be issuing the letters for no additional fee. If this is the case, I would start looking for a new management company.

C&P from another site

An estoppel letter is typically used in a transfer or conveyance of real property before the Closing transaction. It is a document sent to a bank (or other lender), to a homeowners' association (or condo association), to a city/municipality, or a tenant requesting a payoff of a mortgage, assessments or taxes due, or rental amounts due on a lease, to incorporate these amounts into the Settlement Statement for the buyer and seller of the real estate. All assessments and payments due must be incorporated into the amounts due at Closing and paid at the time of the Closing. Some amounts may be pro-rated, but all must be included in the Settlement Statement. The estoppel letter facilitates this process.

"All assessments and payments due..." regarding an association should also include and not be limited to monthly or quarterly maintenance but ALSO any fines or other levies that are internal to the association and have not yet been processed through the courts which would result in a lien. Too often these other charges are missed my closing officers. An assessment is not a a monetary amount for a specific fine directed towards one member of the association but rather a general term for a financial charge towards the community.

Read more: http://wiki.answers.com/Q/What_is_an_estoppel_letter#ixzz1WvoMr4Tw

Postmaster charges for stamps, shipping costs money, phone orders now have a phone fee, attorney's charge for their work, realtors make a fee for selling a home.....why shouldn't a management company be compensated for extra work that is obviously not in their monthly duties that you pay for?! Whew, if you only knew what goes into management, the day-to-day operation of any HOA is not a simple task; just read these threads. Much work goes on behind the scene of a closing for the managing agent.