Estoppel

Started by TheI • 10 replies • 1844 views

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TheI (Florida)
Posts: 40

Posted:

Does anyone have a template for an estoppel certificate or know what info has to be included in one? I have searched online but all I seem to find is an estoppel for tenants not HOA's.

CarolF (Florida)
Posts: 435

Posted:

I believe that the title company doing the closing has specific information that they require. Our property manager handles all estoppels, are you self managed? If so, I would ask the title company about their requirements.

TimB4 (Tennessee)
Posts: 21,059

Posted:

For those who don't know, per uslegal.com, Estoppel is a legal doctrine that prevents a person from adopting a position, action, or attitude, asserting a fact or a right, or prevents one from denying a fact inconsistent with an earlier position if it would result in an injury to someone else. Injury of course can be physical, material or monetary.

An estoppel certificate is a signed document establishing certain facts which the signing party may not later contradict, dispute, or recant.

TheI, is someone asking you for one or are you asking someone else for one?

I ask because typically, an estoppel letter From a Homeowners Association deals with the individual owners assessment/special assessment accounting. Everyone I've had to provide came from the lender and I just had to fill in the blanks on behalf of the Association.

TheI (Florida)
Posts: 40

Posted:

I am on the board and we received a request for an estoppel on Friday. We are self-managed. The requesting party looks like a title company and they did not send a form but did give some information like the buyer, seller, closing date and they want it by 10/17. There is no money owed on the property and I would hate to get the lawyer to do it because they charge so much.

LarryB13 (Arizona)
Posts: 4,099

Posted:

I would respond by asking them for a copy of the form they wish you to fill out. I would also ask for a copy of their state license since you seem to be uncertain as to just who they are. I would also inform them that because you are a volunteer you find their 5-calendar-day deadline unreasonable.

I would not make up any forms of your own nor would I involve your attorney. If they really need the information they should not have waited until the 11th hour to ask for it.

TimB4 (Tennessee)
Posts: 21,059

Posted:

@Larry, The 5 calendar days may be a State law.

@TheI, I've attached what our last lender wanted. Perhaps it will help.

Note, the certificate of insurance that they want is a copy of the declarations page of the Associations liability insurance.

Since we are not a condominium, we still provide a copy of the declarations page but also include the following statement:

The [NAME} Homeowners Association holds liability insurance policies required by the Bylaws and the Commonwealth of Virginia. It is suggested that each town-home owner obtain insurance covering property damage and personal property liability insurance covering his/her personal unit (it is not covered by Association Insurance).

Hope this helps,

Tim

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LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By TimB4 on 10/13/2013 4:36 AM
@Larry, The 5 calendar days may be a State law.

I have never heard of anything that requires returning a document in five calendar days. In those situations where the time is five business days, the law usually grants three extra days if the item is sent by mail.

Just what do they intend to do if the estoppel letter is not returned by their deadline? Call out the National Guard? Charge the person with failure to perform voluntary work for the benefit of a title company?

LarryB13 (Arizona)
Posts: 4,099

Posted:

Tim,

Now for a more serious response.

The estoppel letter, as you pointed out earlier, will serve to forever bar the association from pursuing collections against either buyer or seller should there be any unpaid assessments. Because of its irrevokeable nature, I would be extremely cautious in signing or sending such a document. Submitting it to the requesting party will bind the association to a course of action.

In this case, the requesting party did not provide a form and their identity is uncertain. "The requesting party looks like a title company." In addition, they are demanding a fast response.

Before I bound my association to anything, I would want to know for certain who the requesting party is and whether there is a statute requiring me to respond. Then I would inform the requesting party that since I am a volunteer, I will need to research the association records when I have the time to do so. Let the other party take it from there.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Well, rather then debate what is or isn't needed and how long of a time frame is required, I went ahead and looked up the FL statute. See

720.30851 Estoppel certificates

LarryB13 (Arizona)
Posts: 4,099

Posted:

Tim,

Thanks for the link. The statute clearly states "15 days after the date on which a request for an estoppel certificate is received . . ."

The way I read that statute is that the owner, his mortgage company, or an agent for either, are authorized to request an estoppel certificate at any time of their choosing. It is not dependent on a sale. A wise owner might want to request such a certificate once a year just to prevent a future board from claiming that there were unpaid assessments.

BTW, we have no similar statute in Arizona.

TheI (Florida)
Posts: 40

Posted:

Thank you all for the answers.

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