Estoppels - Who Actually Knows The REAL number?

I challenge you to answer the following questions:

1. Does the President sign(Digitally with Adobe Sign, or by hand) all Estoppels generated for your Association?
2. If not, why not? It is a substantial LEGAL document and should always be reviewed for accuracy.
3. Do monies collected as a result of Estoppels being issued come into the books of the Association OR, do they go straight to Mgmt?
4. Tell me your current daily rate of Estoppels? Mine is 1.4 per day and rising.

Lets do some quick math....

Management Contract- lets say it's $50,000 per year
That's a community of around 2000 homes with a MARGINAL(at best) job having been done from three "well known" Mgmt companies over a 14 year period.

NOW, lets add up the Estoppels.....

1.4 * 30 = 42 Estoppels Each Month
42 * 12 = 504 Estoppels Each Year

Let's say your Mgmt company charges the same as ours did? 350$ plus a 125$ "Transfer Fee"(Don't even get me started)

475 x 504 = $239,400

Did you seriously just let your Mgmt company print a single REAM of paper and get paid a quarter of a million dollars to do so?

There is only ONE reason Mgmt companies exist....and I assure you it has NOTHING to do with violations!!!! That "other" stuff is for appearances and to keep the Board busy and distracted from what's really happening.

THE UNLAWFUL EXTRACTION OF ASSOCIATION MONIES OFF THE ASSOCIATION BOOKS PAID DIRECTLY TO MGMT.

Asking these questions may cause harm to the relationship you have with Mgmt, but if you cannot answer these, or you are unaware of what the Estoppel process even is, you should resign your position on the Board IMMEDIATELY and let someone more qualified do the job of running the corporation!

"Will Allow?" Wow. Who's running this corporation? You or the idiots on the Board who illegally assigned their duties away to you in a half baked contract. You might be a "great" property manager but unfortunately you're bad at reading and math)

504 was the total number of Estoppels per year, not the charged amount of the legal ESTOPPEL document you so vehemently seem to be protecting.

Go ahead and admit that you(another shady Mgmt co) feel "justified" in those "fees to owners" while clearly not letting the members of the Association know that your company gets paid AT LEAST FOUR times the amount youre contrated for to manage the Association.

Enlighten us on the exact content of this 300 page Estoppel you say you produce for $750.00. Lol! Waiting with baited breath.....

It took me one day to get up to speed on Estoppels. Paypal API, Webform, Fillable PDF....

Let me guess...yours contains the following: Assessment owed, outstanding fines, violations, special assessments...and then you plop on the "official records" to make it seem like there's so much more to your scam.

Obviously, you’re upset at the management company, but remember, they don’t (usually) operate in a vacuum – a HOA board of directors should authorize what it can and can’t do.

But I’m confused as to whether you’re just ranting or have a question about what your property manager is doing. Your original comment reads like you began yelling about something and then posted this mid-rant, so to begin, what exactly do you mean by estoppel? If you’re using estoppel as another word for escrow, as Richard stated, I would agree with him that if you think the property management charges are excessive, the board should renegotiate the terms, get another company to handle this for them or do it themselves.

This brings me back to your point for posting this. If you’re just blowing off steam that’s fine, but if you have a question on the best way to address this, ask, don’t just rant and rave. Are you upset because you think the charges are excessive and the board hasn’t (or refuses to) address this? Are you upset because these charges have been passed along to you? Why do you have anything in escrow? Is it because you’re going through a dispute with the association and your assessments have been placed there until the dispute is resolved? In that case, perhaps you need to address the situation that prompted the escrow first and THEN move onto the escrow (estoppel) charges?

Finally, stop insulting people. Richard was trying to answer your question (although I really didn’t see one in your comments) – you don’t have to agree, but comments like “You might be a "great" property manager but unfortunately you're bad at reading and math” are unnecessary and don’t change your situation.

Robert,

In my Association, they are called disclosure statements.

I don't live in a condominium, hence I'm surprised that there are really 42 disclosure statements per month for a single Association.

In my Association (130 homes) we average 5 per year.

Virginia specifies the information that is contained within a disclosure statement. My Association also adds additional items. The cost is also specified by statute. We charge $100. $50 if you need an update.

We are self managed, therefore the Association gets the money. However, it costs just as much to put a package together as we charge (and this is with free labor). If you include labor costs, it would likely cost more which is why Virginia allows management companies to charge a higher fee.

Sorry if I had inverted the numbers. Having just driven 211 miles home and arriving at midnight from a HOA appointment, my eyes might do that to me. But I responded last night, when I should have gone to sleep.

You might to preach to the over 360,000 HOA's in the US and the more than 1.5M volunteers who serve on Boards. BUT, you are lying when you insinuate that the practice is illegal.

In California, by statue, there are a specific list of documents the seller MUST provide to the buyer. I don't make the rules, the state legislature does. My job, on behalf of the HOA, is to provide the correct documents when they are asked for. In addition, the seller can use the cost as a deduction on their federal tax return.

Dollars and Sense: If the association you reference pays $50K for management, the going rate is $10.00 a door or $20K per month, or $240K per year. I find it hard to believe that 1 in 4 homes change hands in your association. The average is 1/2 of 1%, or in your case, 10 per month or 120 per year. So the bloodsuckers are only ripping the poor souls off for $57K per year. In addition, as this is additional income, they are required to pay income taxes.

We provide a service to provide documents on a timely basis during a real estate transaction. In eight years, I have had ONE complaint on price, ONE.

In California, what an association can charge and what a management company charges are two different matters, decided, again, by the state legislators.

I guess you did look at the link I provided, so below are the required documents required. BTW, I can knock one of these off in 5 minutes TOPS!

Articles of Incorporation or statement that not incorporated Section 4525(a)(1)
CC&Rs Section 4525(a)(1)
Bylaws Section 4525(a)(1)
Operating Rules Section 4525(a)(1)
Age restrictions, if any Section 4525(a)(2)
Rental restrictions, if any Section 4525(a)(9)
Annual budget report or summary, including reserve study Sections 5300 and 4525(a)(3)
Assessment and reserve funding disclosure summary Sections 5300 and 4525(a)(4)
Financial statement review Sections 5305 and 4525(a)(3)
Assessment enforcement policy Sections 5310 and 4525(a)(4)
Insurance summary Sections 5300 and 4525(a)(3)
Regular assessment Section 4525(a)(4)
Special assessment Section 4525(a)(4)
Emergency assessment Section 4525(a)(4)
Other unpaid obligations of seller Sections 5675 and 4525(a)(4)
Approved changes to assessments Sections 5300 and 4525(a)(4), (8)
Settlement notice regarding common area defects Sections 4525(a)(6), (7), and 6100
Preliminary list of defects Sections 4525(a)(6), 6000, and 6100
Notice(s) of violation Sections 5855 and 4525(a)(5)
Required statement of fees Section 4525
Minutes of regular board meetings conducted over the previous 12 months, if requested Section 4525(a)(10)

I know actually what Estoppels are, but we don't use them in California!

Provide ANY evidence of the "illegal" part that management companies skirt around the association books. ANYTHING You won't and can't, just hot air!

Florida has some "different rules" than many other states have. They are one of the few states that do put the new owner on the hook for the previous owner's debt to the HOA. Don't agree with it but it's something Florida does allow.

Management company works for the HOA. It's the HOA's responsibility to allow one to VIEW documents but not necessarily PROVIDE copies. The HOA can charge money to provide physical copies as it does cost them money.

Suing your HOA is suing yourself and your neighbors. So you may be "litigious" but your going to find the HOA lawyer is just as much against you. So it's best to settle this issue within the system than fighting. Unless your into paying for someone to fight your own lawsuit.

If you've outsourced the job to your management company then a director's signature is not required. Otherwise any board member can prepare and deliver an estoppel letter. The maximum you can charge, as of July 1, is $250 and you've got to deliver it within 10 business days. You can charge an extra $100 for expedited delivery. If the seller is delinquent in any monetary obligation you can charge another $150 on top of that.

"Transfer Fee" sounds like a transparent, illegal attempt to circumvent the statutory cap on fees.

You should take it up with your board which is ultimately responsible for whatever arrangement you have with your management company. If your management company is making too much money at the association's expense, there's one place to look: the board of directors.

2,000 units turning over every 4 years sounds like a nice stable community. A wet dream for shady management companies, I'm sure. BTW is it a condo or homeowners association?

How is the management company unlawfully extracting money from the association? He who prepares the estoppel letter is entitled to charge the fee. It doesn't automatically belong to the association. Again, if your board entered into a bad deal with the management company then, well... you know where to look.

You should stop trying to tell other people what to do. Look in a mirror.

Straight up HOA, not a timeshare. That reminds me... you should have seen my wife's face one day as we did the "free weekend in Orlando" in exchange for the timeshare pitch when I started asking specific questions with ever increasing specificity which caused the sales guy to remove himself and retrieve the big guns to come help diffuse the confusing situation for him. They flat out REFUSED to let me see any governing docs and that ultimately was my cue to depart although i had zero interest in a TS from the get go. I was chiming off to another family on the way down in the elevator about my discoveries and suspicions and afterwards my wife told me they were holding a signed contract(oops) as I went through my abridged hoa tirade. Guess they met me about 10 min too late.

The "illegal" part....our CC&Rs say "...Estoppels provided to owners, or their agents, will be added to the owner's account....then paid at closing and credited...". Now, if "these shady management companies" are state licensed(CAM) to be "experts" in their respective field and in turn agree in their contracts to use the community's governing documents as their ultimate guide, then I assure you that when I sue them for breach(possible class litigation can be created) not only will their scam be revealed to hundreds of their other "customers", but the sheer inconvenience of having to contact thousands of title companies and refund monies to them should disuade any other company from trying to pull that stunt on my watch. How did so many people before me fail to realize what was happening? I will tell you! They trust that management is competent, truthful or honest. I have so many instances to the contrary it will make your heads spin. From three different LARGE hoa management companies. One has a million a MONTH in payroll expenses to give you an idea of their size but even the mighty can fall. . I am a data hoarder and that peculiarly of mine is going to come back to haunt them in the end. Poor them thinking I wasnt adversarial as they fed me dataset after dataset....until I WAS. HA! Takes one to catch one. I took a break from running my multi-million dollar company to offer my free executive services to my community....that was 8 years and $1,000,000 in lost personal income ago but now that I am up to speed in the "tricks of the trade" related to Mgmt, FCs, collections, fees, over billing of office supplies, poor compliance adherence, I am prepared to do some retroactive damage to these companies who harmed my community with their scams.

Also, there are many Mgmt contracts that say things like management "...issues Estoppels..." and "fees to owners" bla bla bla, but specific contract language delegating the president's typical requirement to sign ALL written instruments is usually blatantly absent, therefore the actual ability of the Mgmt company to "issue" ANY document which requires an association authorizing signature could be on shaky legal grounds. What if it meant that now every one of those homes subject to those invalid Estoppels has a "title defect"? Ouch!!! Could be very bad for all those title insurance companies who vouched for that title would resolve and possibly subrogate against mgmt's GL policy coverage. TBD.

I am not frightened by the cost of any attorney nor do I have problems with suing or FC-ing on owners for non-payment or anyone else who has it coming related to this association. We've spent over 550,000$ on attorney's fees but we get most of that back but laws are concerningly more and more bank friendly again now that Wall Street rooted their pig snouts deep into the rental game(AH4R and IH). We have had zero assessment(<100.00) increase in a decade. Have gobs of cash even though management seems to have been extracting an extraordinary $250,000 a year for the past decade OFF THE BOOKS as "fees to owners".

any hoa budget which is being reduced by Mgmt "fees to owners" traveling around the edges of the hoa books is a total BS practice but will NEVER happen here in my community again.

Mgmt....Best of luck in court;)

Thnx for all your comments.

Potentially may not matter what your CCR's state because your State Law in this instance will most likely supersede. And your State law for Single Family HOA'S State the following. If you are Condo let us know as most likely will be similar:

720.30851 Estoppel certificates.

(6) An association or its authorized agent may charge a reasonable fee for the preparation and delivery of an estoppel certificate, which may not exceed $250, if, on the date the certificate is issued, no delinquent amounts are owed to the association for the applicable parcel. If an estoppel certificate is requested on an expedited basis and delivered within 3 business days after the request, the association may charge an additional fee of $100. If a delinquent amount is owed to the association for the applicable parcel, an additional fee for the estoppel certificate may not exceed $150.
(7) If estoppel certificates for multiple parcels owned by the same owner are simultaneously requested from the same association and there are no past due monetary obligations owed to the association, the statement of moneys due for those parcels may be delivered in one or more estoppel certificates, and, even though the fee for each parcel shall be computed as set forth in subsection (6), the total fee that the association may charge for the preparation and delivery of the estoppel certificates may not exceed, in the aggregate:
(a) For 25 or fewer parcels, $750.
(b) For 26 to 50 parcels, $1,000.
(c) For 51 to 100 parcels, $1,500.
(d) For more than 100 parcels, $2,500.
(8) The authority to charge a fee for the preparation and delivery of the estoppel certificate must be established by a written resolution adopted by the board or provided by a written management, bookkeeping, or maintenance contract and is payable upon the preparation of the certificate. If the certificate is requested in conjunction with the sale or mortgage of a parcel but the closing does not occur and no later than 30 days after the closing date for which the certificate was sought the preparer receives a written request, accompanied by reasonable documentation, that the sale did not occur from a payor that is not the parcel owner, the fee shall be refunded to that payor within 30 days after receipt of the request. The refund is the obligation of the parcel owner, and the association may collect it from that owner in the same manner as an assessment as provided in this section. The right to reimbursement may not be waived or modified by any contract or agreement. The prevailing party in any action brought to enforce a right of reimbursement shall be awarded damages and all applicable attorney fees and costs.
(9) The fees specified in this section shall be adjusted every 5 years in an amount equal to the total of the annual increases for that 5-year period in the Consumer Price Index for All Urban Consumers, U.S. City Average, All Items. The Department of Business and Professional Regulation shall periodically calculate the fees, rounded to the nearest dollar, and publish the amounts, as adjusted, on its website.

These amounts are similar to what Geno already pointed out and he is also from your state. If the Association is providing then the association reaps the reward for their work in providing. If an authorized agent is providing then they in turn reap the reward for their services provided on behalf of the Association. The first sentence in (6) notes: "An association OR its authorized agent may charge a reasonable fee for the preparation and delivery of an estoppel certificate." So ... I am not sure what your REAL issue is with regards to your OP statement? Are you angry because the "authorized agent" is receiving the fee charged instead of the HOA?