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Learn More About Association Estoppels

Most owners who own property governed by a condo or HOA do not really understand what an "Estoppel" is, and the difference between an Estoppel, Ledger and a Payoff. When buying or selling real estate governed by a condominium or homeowner association, an estoppel must be obtained from the Association which outlines certain items, such as debts on the property and other binding matters on the property. The Associations are bound by the Florida Statutes requirements for issuing estoppels. Florida Statute, 718.116(8) for Condominium Association, and 720.30851 for Homeowner Association, are virtually identical.

Distinguishing a Payoff, Ledger and Estoppel

When speaking of estoppels, it is important to make a distinction between a payoff, an estoppel, and a ledger. Many owners are confused by these terms because they are used interchangeably sometimes, but the implications of each is very different.

  • Ledger: simply shows all transactions against a unit and is required to be kept as the association’s official records. Ledgers may be amended, and as such are not legally binding on an association.

  • Payoff: can be used to preliminarily assess the numbers and avoid the cost of an estoppel while deciding whether the investment is worthwhile. However, a matter should never be settled based on a payoff because it is not likely to be legally binding on the association. A payoff is usually non-binding, but can be made into a "binding payoff" if certain release language is included in it.

  • Estoppel: An estoppel is a legally binding document, typically used when there is a closing on a property. The Associations are bound by the Florida Statutes requirements for issuing estoppels. Florida Statute, 718.116(8) for Condominium Association, and 720.30851 for Homeowner Association, are virtually identical. The following are the highlights.

Florida Statutory Requirements for Estoppels

  • Timing: Associations required to issue "estoppel certificate" within 10 business days after receipt of written or electronic request;

  • FEES: Associations may charge reasonable fee between $250 (only if there is no debt owed on the property) and $400 (if there is debt owed on the property). There is also an expedited fee, for delivery within 3 business days after the request, for an additional $100 fee. These are statutorily set and cannot exceed these amounts;

  • Fee Refund: if requested in conjunction with mortgage, but closing does not occur, and no later than 30 days after scheduled closing date Association receives written request that sale did not go through;

  • Association required to designate on its website a person or entity with a street or email address for estoppel requests;

  • List of all the legal requirement to be within the estoppel certificate;

  • Estoppel Certificate emailed or hand delivered is has a 30 day effective period, if regular mail it is effective for 35 days;

  • If Association receives request for estoppel, and fails to deliver within 10 business days, a fee may not be charged for the preparation and delivery of the estoppel certificate;

  • If the Association refuses a summary proceeding may be brought to compel the estoppel, prevailing party entitled to attorney fees;

  • Caps estoppel fees for certain bulk purchases (25+ parcels)