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What is an Estoppel Certificate?

An estoppel certificate is a document that provides statutorily-mandated information about a property owner’s account with their homeowners association (HOA). Estoppel certificates are governed by Florida Statutes Section 720.30851.

One definition of the word “estoppel” means to preclude a person from asserting something contrary to what is implied by a previous action or statement of that person. In the context of a real estate closing, this means that if the estoppel fails to identify an amount that is due or owing, the HOA should not be able to come back later to collect from the buyer. The FAR/BAR real estate purchase contracts in Florida contemplate that estoppels will be ordered whenever a property is being sold/purchased and it is typically and customarily the responsibility of the seller to pay for these.

A typical estoppel certificate usually includes information such as:

  • The property owner’s name that is on record with the HOA
  • The HOA’s legal name and address
  • The effective date of the certificate
  • The property’s unit number or address
  • The amount of any outstanding HOA dues, assessments, or fees
  • The amount of any fees due at the time of closing, such as transfer fees, capital contributions, and any prepaid assessments to be collected
  • Whether there are any violations of the covenants, conditions, and restrictions (CC&Rs) with respect to the subject property

Estoppel certificates are important for both buyers and sellers of real estate. They help to ensure that the buyer is aware of any financial obligations that come with owning the property, and that the seller is in compliance with all HOA requirements (or, stated another way, that the seller’s property is not in violation of any association covenants). When delivered electronically (most, if not all, are delivered this way) estoppel certificates have an effective date of 30 days. This allows all interested parties to the transaction – buyers, sellers, and closing attorneys to be able to rely on the information shown on that estoppel for 30 days. Any attempt by the association or its management company to shorten this effective period is contrary to Florida law and should not be held valid.

If you are considering buying or selling a home in Florida that belongs to an association (homeowners or condominium) you will most certainly run into an estoppel certificate. The above information may be assistive to you in reviewing the certificate to make sure that it is accurate and complete. If you are in need of legal representation for a matter involving an estoppel certificate, please reach out to us to see if we may be of assistance.

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