Who Pays the Estoppel Fee in Florida?

In Florida real estate transactions, particularly those involving properties within homeowners’ associations (HOAs) or condominium associations (COAs), specific documentation is necessary to ensure a clear and efficient transfer of ownership. These associations manage common areas and services, requiring property owners to pay regular assessments and adhere to community rules. To facilitate a smooth property transfer, one document that plays a significant role is the estoppel certificate, which provides essential financial clarity.

Understanding Florida Estoppel Certificates

An estoppel certificate serves as a legally binding document that outlines the current financial standing of a property within a community association. Its primary purpose is to present a precise snapshot of all outstanding assessments, fees, and other charges owed to an HOA or COA as of a specified date. This document is crucial for both buyers and sellers during a real estate closing.

For buyers, the estoppel certificate prevents the association from later claiming additional amounts not disclosed, preventing unexpected financial liabilities. Sellers rely on it to confirm all their financial obligations to the association have been satisfied or will be at closing. The certificate typically includes details such as current periodic assessments, special assessments, outstanding fines, and future payment schedules, providing a comprehensive overview of the property’s financial obligations. Florida law mandates this certificate be provided in a uniform statewide format, ensuring consistency and transparency.

Fee Responsibility and Statutory Guidance

Determining who pays for the estoppel certificate in Florida typically depends on the terms negotiated within the real estate purchase agreement, though the seller often assumes this cost. Florida Statutes provide specific guidance regarding an association’s ability to charge for these certificates and the conditions for such charges. Florida Statute 718.116 governs condominium associations, while Florida Statute 720.30851 addresses homeowners’ associations.

These statutes dictate that an association or its authorized agent may charge a reasonable fee for preparing and delivering an estoppel certificate. An association must designate a person or entity on its website to receive requests for estoppel certificates. The association is required to issue the certificate within 10 business days of receiving a written or electronic request from a parcel owner or their designee, or a mortgagee or their designee. Failure by the association to deliver the estoppel certificate within this 10-business-day timeframe means that a fee cannot be charged for its preparation and delivery. The authority for an association to charge this fee must be established by a written resolution adopted by its board or through a written management, bookkeeping, or maintenance contract.

Fee Structure and Transaction Outcomes

Florida law sets limits on the fees associations can charge for estoppel certificates. The maximum standard fee for an estoppel certificate is capped at $299 if no delinquent amounts are owed to the association for the property. If the certificate is requested on an expedited basis, requiring delivery within three business days, an additional fee of up to $119 may be charged.

When delinquent amounts are owed to the association for the applicable parcel, an additional fee of up to $179 may be assessed. Therefore, for an expedited request involving a delinquent account, the total fee could reach approximately $500. These statutory fee caps are subject to adjustment every five years based on changes in the Consumer Price Index.

If a real estate transaction does not close, the estoppel fee may still be due to the association. The ultimate responsibility for the fee in such cases often reverts to the seller, allowing the association to collect it from the property owner. At closing, the estoppel fee typically appears as a line item on the settlement statement, ensuring its collection and proper allocation.