Senate Bill 398 is on track to become the law of the land, effective July 1, 2017, unless Governor Scott vetoes it. While anything is possible, it is important that your community association be prepared to comply with this legislation. The changes to the estoppel certificate issuance process are cumbersome. The following information applies to condominium, homeowners’ and cooperative associations, too.
The amount of information that must be set out in the estoppel certificate is voluminous and must be provided in substantially the form as provided in the legislation itself. There are three parts to the estoppel certificate starting with the “general information,” which includes the date of issuance, name of the owner as reflected in the books and records of the Association, the unit designation and address, the parking or garage space number as reflected in the books and records of the Association, the attorney’s name and contact information (if the account is delinquent and has been turned over to an attorney for collection), the fee for preparation and delivery of the estoppel certificate (see note that the cost of providing the certificate is included in the fee and cannot exceed the amounts set forth above), and the name of the requesting party.
Part two of the estoppel certificate is the “assessment information,” which must contain the regular periodic assessment levied against the property and frequency of assessment; the date that the regular periodic assessment is paid through; the date of the next installment of the regular periodic assessment that is due and the amount; an itemized list of all assessments, special assessments, and other monies owed on the date of issuance to the association by the owner for the specific property; and an itemized list of any additional assessments, special assessments and other monies that are scheduled to become due for each day after the date of issuance for the effective period of the estoppel certificate. In calculating the amounts that are scheduled to become due, the association may assume that any delinquent amounts will remain delinquent during the effective period of the estoppel certificate. In other words, if there is a delinquency it would appear that the provider of the estoppel needs to calculate the amount that will be due 30 days after the estoppel certificate is issued.
Part three of the estoppel certificate is the “other information,” which must include the following: (i) whether there is a capital contribution fee, resale fee, transfer fee or other fee due and, if so, the type and amount of the fee; (ii) whether there is any open violation of a rule or regulation noticed previously to the owner of the property; (iii) whether the rules and regulations of the association applicable to the property being transferred require approval of the board of directors of the association for the transfer of the property and, if so, whether or not the board has approved the transfer of the property; and (iv) whether there is a first right of refusal provided to the members or the association and, if so, whether or not the members or the association have exercised such right of first refusal. Further, the association is obligated to provide a list and contact information for all other associations for which the owner is a member; the association must provide contact information for all insurance maintained by the association; and finally, the estoppel certificate must be executed by an officer or authorized agent of the association. Also, the association, at its discretion, may include any other additional information in the estoppel certificate.
An estoppel certificate that is hand-delivered or sent by electronic means is effective for 30 days from issuance. However, if sent by regular mail, then it has a 35 day effective period. If additional information or a mistake related to the estoppel certificate becomes known within this timeframe, then an amended estoppel certificate may be prepared and delivered and will be effective only if the sale or refinancing of the property has not been completed. No fee may be charged for the amended estoppel certificate and once delivered, a new 30 day or 35 day effective period begins to run.
If the association receives a request for the estoppel certificate from an owner (or the owner’s designee, the mortgagee of the property, or the mortgagee’s designee) and it is not delivered within 10 business days, then the association has waived its right to collect a fee for the preparation and delivery of that estoppel certificate. The association also waives the right to collect any monies owed in excess of the amount specified in the estoppel certificate which also applies to all successors and assigns of the property.
As to the fee an association may charge for the preparation and delivery of the estoppel certificate, if there is no delinquency, then the maximum amount that can be charged may not exceed $250. If the estoppel certificate is requested on an expedited basis and the association delivers the estoppel certificate within three business days after the request, then the association may charge an additional $100 fee. However, if there is a delinquency owed to the association an additional fee of up to $150 may be charged.
When there are multiple properties owned by the same owner and simultaneous estoppel certificates are requested, so long as there are no past due monies owed to the association, then the statement of monies due for those properties can be delivered in one or more estoppel certificates. However, the fee structure is based upon the number of properties at issue in ranges: (i) for 25 or fewer properties, a total of $750 (not for each property, but in the aggregate); (ii) for 25 to 50 properties, a fee of $1000; (iii) for 51 to 100 properties, a fee of $1500; and (iv) for more than 100 properties, a fee of $2500. All of the fees that can be charged by the association for the estoppel certificate are to be adjusted every five years in an amount equal to the total of the annual increases for that five year period in the Consumer Price Index, and the Division of Florida Condominiums, Timeshares, and Mobile Homes is to make such determinations.
In order for the association to charge a fee for the preparation and delivery of the estoppel certificate, such authority must be established by written resolution adopted by the board or provided by a written management, bookkeeping, or maintenance contract and is payable upon the preparation of the certificate. This being the case, does this mean the association cannot be paid in advance of providing the estoppel certificate? If the closing date does not occur within 30 days after the closing date for which the certificate was sought and a written request is made for refund, then the refund must be provided within 30 days after receipt of the request. While the refund is the obligation of recipient of the fee, the association may collect it from the owner in the same manner as an assessment.
The association must designate on its website a person or entity with a street or email address for receipt of a request for the estoppel certificate. The estoppel certificate, when issued, must bear the exact date of issuance. In other words, the estoppel certificate cannot contain a date other than the date it is actually issued.
In the event an association does not provide the estoppel certificate, then the requesting party may bring a summary proceeding in court to compel compliance and there are provisions for the award of prevailing party attorney’s fees.
The board of directors of every Florida community association should ensure that either the association has established a written resolution adopted by the board for the authority to charge a fee for the preparation and delivery of the estoppel certificate or that such authority is provided by written management, bookkeeping or maintenance contract. But, because, in all likelihood, the association’s management company, on-site manager, bookkeeper, and/or attorney will be involved in the estoppel issuance process, the association should consider working with its legal counsel to both prepare the form of estoppel certificate and a written resolution executed by the board to authorize the fee for the preparation and delivery of the estoppel certificate so that it is readily available.