This year ,the four most important bills affecting community associations are Senate Bill 398, House Bill 653, House Bill 1237; Senate Bill 1520, and HB 6027. In this article the focus will be on Senate Bill 398 (Estoppel Bill) which has passed and was not vetoed by Governor Rick Scott. The below article will focus on Senate Bill 398.
ESTOPPEL CERTIFICATES — SB 398
Please Note, Governor Rick Scott signed the bill on June 14, 2017, amending Chapters 718 (condominiums), 719 (cooperatives), and 720 (homeowners’ associations) effective on July 1, 2017. Associations should be prepared to properly respond to requests for an estoppel certificate under the new law. An estoppel certificate is a document, on paper or electronic, sometimes called an estoppel letter. The buyer of, or mortgage lender for, a parcel requests the letter/certificate to confirm the amount owed to the community association, and requests identification of the next regular and special assessment levied and due. These letters/certificates are necessary and important in the scenario of a sale or refinance.
The preparation and issuance of estoppel certificates by Florida condominium, homeowners’ and cooperative associations, governed respectively by Chapters 718, 719 and 720 Florida Statutes, has been considerably amended.
Notice. Estoppel requests may be communicated by an owner, mortgage holder or either of their designees. Communication can be in writing or by email. The Association’s website must identify the name of the person or entity designated to receive estoppel certificate requests, together with the street or e-mail address for receipt. It is important that Association’s create a dedicated email addresses for such estoppel requests, and policies as to how requests are handled upon receipt, so that requests are not missed and the responses are consistent with the law and all owners.
Response. Within ten days of a request an estoppel certificate must be delivered to the requestor on the date issued by hand delivery, United States Postal Service regular mail, or e-mail.
Who: The Association may be bound by an estoppel certificate issued by any: Association director, authorized agent or representative; and, any management company employee, authorized representative authorized agent. Associations should consider policies limiting who communicates information.
Contents. Estoppel certificates must contain, in addition to the date of issuance, unit/parcel owner name, unit/parcel number of the requesting owner, regular assessment amount, paid through date and next installment, the following:
- Parking space or garage number.
- Fee for certificate.
- Name of requester.
- If there is a delinquent amount the name and contact information of the attorney handling.
- If monies are due on the date of issuance, an itemization of all amounts due together with amounts coming due through the effective date of the certificate.
- Additional assessments and other monies scheduled to be due within the effective period of the certificate.
- Capital contribution requirements.
- Use restriction violations noticed to the owner.
- Transfer approval requirements, and,
- Association insurance contact information.
- Officer or authorized agent signature.
Associations will want to gather the general information now, and enact a process to regularly update, and provide the information to counsel, as well as determine how to gather unit specific information, such as violation information.
Effective Date. An estoppel certificate is to have effective period of 30 days if sent by e-mail and 35 days if sent by regular mail. Associations will want to ensure that the certificate includes all future accruing items within those deadlines.
Fees. If a fee is charged, then the Board of Directors must adopt a resolution in writing authorizing the collection of a fee which may not exceed:
- Base: $250.00 if no delinquent amounts are due to the Association.
- Timing: An additional $100.00, for a three day expedited period.
- Delinquency: An additional $150.00, if there is a delinquent amount is owed.
These amounts are to be adjusted every five years in the same manner as the Consumer Price Index changes. Multiple units from the same seller have additional limitations. No preparation fees may be charged: if a certificate is not provided within 10 business days of the request; nor, for an amended certificate. An association must have an authorizing resolution or written contract adopted by July 1, 2017.
Reimbursement. The statutory right to a non-payor owner to be reimbursed the certificate fee if a sale or mortgage of a unit does not close within thirty days after the anticipated closing date cannot be waived. If there is litigation over the right to reimbursement, the prevailing party is entitled to attorney’s fees and costs.
Binding authority. The Association will be bound in most instances by the information contained in the certificate.