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Review of New Legislature Continues – Part 2

Last week, we began our annual review of legislation affecting Florida’s community associations. This week we continue our review of SB 398, the new law regarding “estoppel certificates,” the form associations have to complete for unit or parcel closings.

An estoppel certificate that is hand delivered or sent by electronic means has a 30-day effective period. An estoppel certificate that is sent by regular mail has a 35-day effective period.

If additional information or a mistake related to the estoppel certificate becomes known to the association within the effective period, an amended estoppel certificate may be delivered and becomes effective if a sale or refinancing of the unit or parcel has not been completed during the effective period. A fee may not be charged for an amended estoppel certificate. An amended estoppel certificate must be delivered on the date of issuance, and a new 30-day or 35-day effective period begins on such date.

An association waives the right to collect any moneys owed in excess of the amounts set forth in the estoppel certificate from any person, and his or her successors and assigns, who in good faith relies upon the certificate.

The law now prohibits an association from charging a fee for preparing and delivering an estoppel certificate that is requested, if it is not delivered within 10 business days.

For cooperative associations, the new law authorizes an association to charge a fee for preparing and delivering an estoppel certificate but the authorization must be established be a written resolution adopted by either the board or a written management, bookkeeping, or maintenance contract. This was already the law for condominium and homeowners’ associations.

The maximum amount of the estoppel certificate fee is $250 if there are no delinquent amounts owed to the association. An additional $100 fee may be charged for an expedited estoppel certificate delivered within 3 business days after a request for an expedited certificate. An additional fee of $150 can be added if there is a delinquent amount owed to the association.

A person who pays for the preparation of an estoppel certificate may request a refund if the certificate is requested in conjunction with the sale or mortgage of a unit or parcel but the closing does not occur. The request for the refund must be in writing and must occur no later than 30 days after the closing date.  The refund must be provided within 30 days after receipt of a written request.

The right to a refund if the closing does not occur may not be waived or modified by any contract or agreement. The prevailing party in a suit to enforce a right of reimbursement is entitled to an award of damages, attorney fees, and costs.

SB 398 made a number of significant changes to the law concerning a community association’s obligations in providing estoppel certificates. Community associations should consult with both management and their legal service provider to develop a standard template, and a process for responding to requests for estoppel certificates, including the fee to be charged, and who gets the money. While each estoppel certificate will be unique based upon the particular unit or parcel, many of the required responses will be the same for all estoppel certificates, since they are based on the relevant provisions of the association’s governing documents.

Next week, we will begin review of HB 1237, which includes some fairly radical changes to the Florida Condominium Act, including (another) new term limit law, and strict conflict of interest rules.

Joe Adams is an attorney with Becker & Poliakoff, P.A., Fort Myers. Send questions to Joe Adams by e-mail to jadams@bplegal.com.

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1 Comment
  • phil hylander
    July 17, 2017

    are there limitations on fees charged by third party fees for requesting estoppel info? Can a title company charge additional fees for an estoppel request?

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