Condominium Estoppel Certificates

By Christopher M. Cobb, Esquire

An important aspect of condominium association law is responding to estoppel requests from prospective purchasers or those who take title to a condominium unit by foreclosure. The nature of the request will be the new owner or lender requesting the current outstanding balance due for condominium assessments for the unit. In addition, unit owners for condominiums can make such requests. Within 15 days after receiving a written request from a unit owner or his or her designee, or a unit mortgagee or his or her designee, the association shall provide a certificate signed by an officer or agent of the association stating all assessments and other moneys owed to the association by the unit owner with respect to the condominium parcel. The condominium estoppel certificate is governed by Section 718.116 (8), Florida Statutes.

Any person other than the owner who relies upon such estoppel certificate shall be protected when they rely on the estoppel certificate issued by the condominium association. If the condominium association fails to provide the estoppel certificate, an aggrieved party may initiate summary proceeding under Section 51.011 to compel compliance. In any such action the prevailing party is entitled to recover reasonable attorney’s fees. Subject to any limitation on transfer fees contained in s. 718.112(2)(i), the association or its authorized agent may charge a reasonable fee for the preparation of the estoppel certificate. The amount of the fee must be included on the estoppel certificate. There is some discussion regarding amending the Chapter 718 to shorten the time or limit the fee for the estoppel certificate.

The authority to charge a fee for the estoppel certificate shall be established by a written resolution adopted by the board or provided by a written management, bookkeeping, or maintenance contract and is payable upon the preparation of the estoppel certificate. If the estoppel certificate is requested in conjunction with the sale or mortgage of a unit but the closing does not occur and no later than 30 days after the closing date for which the estoppel certificate was sought the preparer receives a written request, accompanied by reasonable documentation, that the sale did not occur from a payor that is not the unit owner, the fee shall be refunded to that payor within 30 days after receipt of the request. The refund is the obligation of the unit owner, and the association may collect it from that owner in the same manner as an assessment as provided in this section. Having a clear understanding about estoppel certificates is important in the daily operations for condominium associations.

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