What is an Estoppel Letter?
An Estoppel Letter is a legal document provided by a Homeowners or Condominium Association that outlines the financial standing of the current owner. The letter includes the current fee information, any future assessments due and any past dues balances including fees for violations and fines. The letter will also have a ‘good through’ date, which if exceeded, a new letter will need to be obtained to guarantee accurate standing.
Why is an Estoppel Letter Important?
It is necessary to have an Estoppel Letter before the transfer of a property, so it is known if there are any outstanding fees owed to the HOA. The Closing Agent will order the letter so they can prepare the closing documents with the correct fees to close out the transaction. Once requested the HOA has 15 days to provide the letter.
Is there a cost?
Most companies managing a Homeowners or Condominium Associastion charge a fee for the preparation of the Estoppel Letter. Fees can range from $0-$500. In the Amelia Island, Fernandina Beach area, we commonly find these charges in the range of $150-$300. Since the letter is only valid for a specified time it is possible that a new or updated letter will need to be obtained if the closing is delayed. In those cases, many management companies charge an additional fee for updating the letter with the new balances.
For more information on closing costs see What are my closing costs when I sell my home?