Everything You Need to Know About Estoppel Letters Part 1

An estoppel letter is a critical part of buying or selling a unit or parcel that is part of a Homeowners Association (HOA). As a Tampa condo association management company that has been serving the area since 1981, we are intimately familiar with estoppel letters and their importance.

Today in Part 1, we will define an estoppel letter from a legal standpoint. In Part 2, we will further examine the specifics of tenant estoppel letters and HOA estoppel letters.

Florida State Law

An estoppel letter is sometimes called an “estoppel certificate”; in fact, Chapter 718 of the Florida Statutes simply refers to it as a “certificate.” For the purpose of consistency, this article will continue to refer to it as an estoppel letter.

Estoppel letters are important documents and are consequently addressed in both the Florida Condominium Act and the Florida Homeowners Association Act. These governing rules and regulations can be found in Florida Statutes 718.116(8) and 720.30851.

In the State of Florida, parcel or association unit owners are jointly and severally liable along with the previous owner for property-related debts. The estoppel letter is used to put the amount and the due date in writing.

Florida Statute 720.30851 states that once a request for an estoppel letter has been made, the HOA must deliver the document to the requested party within 15 days. The preparation fee must be clearly identified and the balance on the document is legally binding once delivered. In the event that a closing doesn’t occur, the HOA is legally required to refund the estoppel letter preparation fee within 30 days.

What Is an Estoppel Letter?

The legal definition of an estoppel letter is “a bar or impediment which precludes a person from asserting a fact or a right, or prevents one from denying a fact.”

An estoppel letter is used to prevent someone from taking something back at a later date and is part of due diligence when it comes to reviewing a property. It also delivers critical information regarding the tenant-landlord relationship to a third party. Often, this third party is a prospective buyer looking to purchase a landlord’s real property that contains the tenant’s premises.

Another common example is when the third party is a lender who will be secured by an interest in that property. Prior to closing, the HOA or HOA management company needs to supply an estoppel letter to the bank or lender to show whether they are owed any delinquent balances.

These include but are not limited to:

  • Legal fees
  • Recurring payments
  • Special assessments
  • Violations

This article is continued in Part 2, where we will delve into the specifics of tenant estoppel letters and HOA estoppel letters.

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