The ability to efficiently buy and sell units is the hallmark of a healthy condominium community. The association’s role in this process has long been to issue estoppel certificates to prospective purchasers. However, pursuant to a recent statutory amendment, the manner in which associations are required to handle estoppel certificates has changed.

Estoppel certificates are generally used to certify amounts owed or due to the association for a specific unit as of a specified date. Potential purchasers use them to find out how much money would actually need to be paid to the association if they chose to buy the unit.

Are estoppel certificates really that important? Yes! An association generally waives the right to collect any amounts of money that are not specified in an estoppel certificate. They need to be prepared properly and accurately.

As of July 1, 2017, associations are required to issue estoppel certificates within 10 business days after receiving a written or electronic request. Certificates can be completed by any board member or authorized representative, but each association must designate on its website the person or entity responsible for receiving certificate requests.

The amended statute identifies specific information that must be included in estoppel certificates, including:

  • The date of issuance;
  • Names of unit owner and unit designations (including parking spaces);
  • Attorney’s name and contact information if account turned over for collections;
  • The preparation fee; and
  • The name of the requestor.

Estoppel Certificates must also include specific assessment information, including:

  • The amount and frequency of regular assessment.
  • The date through which regular assessments have been paid.
  • The due date and amount of the next regular assessment.
  • An itemized list of all moneys currently owed to the association (regular and special assessments, etc.) and moneys scheduled to become due during the effective period of the certificate. (The effective period is 30 days if delivered by hand or electronically and 35 days if sent by regular mail.)

The amended statute also requires estoppel certificates to include other information, including information about:

  • Fees (capital contribution, resale, transfer, other);
  • Open rule or regulation violations;
  • Board approval requirements for unit transfers;
  • Rights of first refusal; and
  • Insurance maintained by the association.

Under the amended statute, an association may charge a reasonable fee of up to $250 ($400 if the unit has delinquencies) for preparing and delivering estoppel certificates. An expedited request fee of $100 can also be charged for certificates that are delivered within 3 business days.

If certificates are requested for multiple units owned by the same owner and there are no delinquencies, the total fee charged by the association may not exceed, in the aggregate:

  • $750 for 25 or fewer units
  • $1,000 for 26 to 50 units
  • $1,500 for 51 to 100 units
  • $2,500 for more than 100 units

Given the very specific requirements under the amended statute, including those discussed in this article, associations should consult with a professional to ensure processes and procedures for estoppel certificates are compliant.

Setnor Byer Insurance & Risk is available to discuss ways to identify, manage and insure the risks facing condominium associations and their board members.

Clients of Setnor Byer’s Condominium Insurance Programs enjoy access to various risk management services, such as Setnor Byer’s Risk Management Group, Unit Owners’ Report Line, and our New Board Member Education Certification training, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

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