Today begins our annual review of legislation affecting community associations in Florida. Today’s topic, “estoppel certificates.”
On June 14, 2017, Governor Scott signed SB 398, which amends Chapters 718 (condominiums), 719 (cooperatives), and 720 (homeowners’ associations) and which became effective on July 1, 2017. Associations should be prepared to properly respond to requests for an estoppel certificate under the new law.
An “estoppel certificate” is a form the association gives to a buyer or lender when property is being sold in the community. Historically, the certificate only disclosed the amounts necessary to bring maintenance fees current, and the association is there after “estopped” (legally precluded) from seeking more money after the closing. Hence the name. The new law makes many changes to the previous law, and adds additional disclosure requirements.
The changes include:
- The period in which an association must respond to a request for an estoppel certificate has been changed from 15 days to 10 business days.
- An association must designate on its website a person or entity with a street or e-mail address for receipt of requests for estoppel certificates.
- The estoppel certificate must contain all of the following information:
- Date of issuance.
- Name(s) of the unit or parcel owner(s) as reflected in the books and records of the association.
- Unit or parcel designation and address.
- Parking or garage space number, as reflected in the books and records of the association.
- Attorney’s name and contact information if the account is delinquent and has been turned over to an attorney for collection. No fee may be charged for this information.
- Fee for the preparation and delivery of the estoppel certificate.
- Name of the requestor.
- The estoppel certificate must also contain specific “Assessment Information,” including the amount of regular periodic assessments levied against the unit or parcel, the date the regular periodic assessment is paid through, and the date the next installment of the regular periodic assessment is due.
- An itemized list of all assessments, special assessments, and other moneys owed on the date of issuance to the association by the owner for a specific unit or parcel.
- An itemized list of any additional assessments, special assessments, and other moneys that are scheduled to become due for each day after the date of issuance for the effective period of the estoppel certificate is provided.
- The estoppel certificate must also contain a number of additional items under “Other Information,” these include whether there is a capital contribution fee, resale fee, transfer fee, or other fee due. Also, the association must now disclose if there are any “open violations” of rules or regulations “noticed” to the owner in the association official records.
- The estoppel certificate must state whether the rules and regulations of the association require approval by the board of directors of the association for the transfer of the unit or parcel and whether the transfer has been approved. Also, the estoppel certificate must state if there a right of first refusal provided to the members or the association, and if the members or the association have exercised that right of first refusal.
- The estoppel certificate must also provide a list of, and contact information for, all other associations of which the unit or parcel is a member; and the contact information for all insurance maintained by the association.
Next week we will continue review of this law and look at fees that can be charged by the association for this service, and some practical tips for complying with the new law.