Senate Bill 398 (SB 398) affects how associations handle estoppel certificates. This, along with new legislation took effect in Florida that adds several requirements to the Florida Condominium Act and Florida Statutes Chapter 718. What the heck is an estoppel certificate? Read on for details.
When a unit or parcel located in a community is sold, the community association must give the lender or buyer an estoppel certificate. The estoppel certificate proves whether there are any remaining debts or financial obligations that may affect a loan settlement. Outstanding dues or fees that are owed, such as can be then incorporated into the amount due at closing.
The new law is in place to keep previously unregulated preparation costs at bay, how much time an association has to furnish the estoppel letter, and exactly what the letter must contain.
- The new law caps preparation costs at $250 (with a few exceptions). Prior to the legislation, "reasonable" fees were determined by the association and sometimes skyrocketed to more than $1,500.
- Associations now have 10 days to deliver the letter to the lender rather than 15.
- The letter must contain a standard and very specific list of information including an itemized list of special assessments owed by the seller, if there are any open violations, and more. Association administrators are encouraged to contact their lawyer to ensure compliance with this new law.
Read more about how the changes to the Florida law may affect you. It's crucial to adhere to the laws regarding documents, monies owed and paid, and lease agreements. Failing to follow the laws that DO change is a huge liability, not to mention it paints you and your association in a poor light. Stick to the rules, keep good records, and be a good neighbor.
The right software can help you better manage outstanding dues and fees payments. Download your free copy of our guide, 4 Key Aspects of an Effective Payment Solution, to help find a solution that's right for your community.