The Informational Estoppel
Often times, buyers of residential properties request certain information from the community association where the property is situated. While there is no obligation to provide anything other than the documents required by law, such as the financial estoppel and, the often looked, Question and Answer Sheet, a good reason to respond to such requests is to help facilitate lot and unit sales, especially in light of the fact that the requesting party needs to pay for such information. While not the subject of today’s column, the Question and Answer Sheet provides basic information regarding the community, such as general and special assessments and rules regarding unit use, etc.
Sections 720.303(5)(d) and 718.111(12)(e)(1), Florida Statutes, provide that homeowners associations and condominium associations, respectively, or their authorized agent, may charge a reasonable fee to the prospective purchaser, lienholder, the current parcel owner, or member, for providing good faith responses to requests for information by, or on behalf of, a prospective purchaser or lienholder, other than that required by law, so long as the fee does not exceed $150.00 plus the reasonable cost of photocopying and any attorney’s fees incurred by the association in connection with the response.
Pursuant to Section 718.111(12)(e)(2), Florida Statutes, a condominium association and its authorized agent are not liable for providing such information in good faith pursuant to a written request if the person providing the informational estoppel includes a written statement in substantially the following form: “The responses herein are made in good faith and to the best of my ability as to their accuracy.” Sadly, parallel protection does not exist in Chapter 720.
The Financial Estoppel
The financial estoppel is required by law to be provided by a community association, or their agent, to a perspective purchaser. Pursuant to Sections 718.116 and 720.3085,1 Florida Statutes, the financial estoppel must be provided by both condominium associations and homeowners associations, respectively, within 15 days after the date on which a request for an estoppel certificate is received from a parcel owner or mortgagee, or his or her designee. It must be signed by an officer or authorized agent of the association.
The certificate must disclose all assessments and other monies owed to the association with respect to the HOA parcel or condominium unit. An association, or its agent issuing the estoppel, may charge a fee for the preparation of such certificate. The fee must be included in the certificate, and is payable upon the preparation of the certificate. However, for the association or its agent to charge the fee, the authority to do so must be established by a written resolution adopted by the board or provided by a written management, bookkeeping, or maintenance contract.
If the financial 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 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 must be refunded to that payor within 30 days after receipt of the request. However, the refund is the obligation of the seller-unit owner, and the association may collect it from the seller-unit owner in the same manner as an assessment (meaning that it is a lien-able expense, if not paid). Persons relying on the financial estoppel certificate receive its benefits and protections, too.
Unlike the informational estoppel, if an association does not provide the financial estoppel within the 15 days provided by statute, a lawsuit can be brought to compel compliance, and the prevailing party is entitled to recover their reasonable attorney’s fees.
Has your association established lawful authority to charge a fee for the financial estoppel?