Understanding Estoppels
Why Estoppel Letters Matter in Florida Real Estate:
If you’re buying or selling a home that’s part of an HOA or condo association, there’s one document that plays a key role in the closing process: the estoppel letter. It may sound technical, but its purpose is simple—it gives everyone involved a clear picture of the property’s standing with the association so there are no financial surprises later. What Exactly Is an Estoppel? An estoppel letter (sometimes called an estoppel certificate) is a document prepared by the association or its management company that outlines:
Any unpaid dues or fines tied to the property
Whether there are upcoming changes to dues or special assessments
Any current violations of association rules
Approval requirements for new buyers
Whether the association is involved in litigation
Think of it as a snapshot of the property’s account with the association. Without it, a buyer could unknowingly inherit unpaid fees or unresolved issues. Who Orders It—and Who Pays? Typically, the closing agent will request the estoppel. In most cases, the seller pays the fee, since it’s their responsibility to show the account is in good standing. What Does It Cost? Florida law caps the base fee for an estoppel certificate at $299 per association if the account is current. However:
If the owner is behind on payments, there may be an extra charge.
If a “rush order” is requested, associations can add another fee.
These additional charges usually range from $150–$300.
If a property is governed by more than one association, each association can charge separately.
Timing Matters Once requested in writing, the association must provide the estoppel certificate within 10 business days. If they don’t, the requesting party may have legal remedies, and the association could lose its right to charge the fee. When Is the Fee Paid? Some associations allow the fee to be collected at closing, while others require payment upfront before processing the request. Knowing which applies helps avoid last-minute delays. What If the Sale Falls Through? Good news—estoppel fees are refundable if the sale doesn’t close (as long as the seller or their agent ordered it). The association will usually ask for proof that the contract was cancelled, such as a termination notice. Key Take Away Estoppel certificates may seem like just another expense in the closing process, but they’re essential for protecting both buyers and sellers. By clarifying financial obligations upfront, they help prevent disputes and keep transactions on track. If you’re planning to buy or sell a property in an association, make sure you understand the estoppel requirements early in the process. And when in doubt, it’s always wise to check with a qualified real estate attorney for guidance.
