TALLAHASSEE, Fla. – March 10, 2017 – The 2017 session of the Florida Legislature kicked off on Tuesday, March 7, and lawmakers have already started working on a number of high profile issues.
One of Florida Realtor’s legislative priorities this session is reigning in the fees that community association management companies may charge to prepare an estoppel certificate – sometimes as much as $1,000. In most cases, providing a seller with an estoppel certificate amounts to nothing more than opening a computer file and printing the document.
“We’re committed to helping homeowners in Florida, and we have to show our legislators that thousands of Floridians in the real estate industry want something done about this unfair practice,” says Carrie O’Rourke, vice president of public policy for Florida Realtors.
“A condo seller may have found a buyer, passed an inspection and be days away from closing, only to be surprised to see an unexpected $600 fee for an estoppel certificate,” says O’Rourke. “Why does it cost so much, he asks his Realtor. Unfortunately, there is rarely a satisfactory answer the Realtor can offer in that situation. And that’s why we need our lawmakers to focus on estoppel certificate fees during the 2017 legislative session.”
To help bring the estoppel fee issue to lawmakers’ attention, Florida Realtors® has issued a Call for Action – a legislative tool in which thousands of members email their personal representatives and ask them to pass a monetary cap on fees charged for estoppel certificates. The process takes only a minute to complete because the Call-for-Action system automates the task.
“I’ve been involved in these situations many times over and have many colleagues who can attest to the problems caused by excessive estoppel fees,” says Ben Friedlander, a St. Petersburg-based Realtor. “The really sad part is that there are some association management companies out there that charge a reasonable fee. It’s the bad apples that are charging many hundreds of dollars that have turned this into such a problem.”
What is an estoppel certificate?
An estoppel certificate provides a snapshot of the fees or assessments a seller owes to their HOA, and the association or management company provides one when a condo or home is sold. Under Florida law, property owners are jointly and severally liable with the previous owner for fees and assessments that may be due to their community association. Therefore, when someone buys a property that is in a community association, they need to know what is owed so that amount may be collected and applied at closing.
Florida law allows associations to charge a “reasonable” fee to prepare an estoppel certificate, but some association management companies have been consistently charging unreasonable fees. Sellers often don’t learn about these charges until they receive the closing documents. At that point, they have no option but to pay the fee because they can’t get the certificate anywhere else – only from the community association.
Instead of filing a complaint about the fee, however, the seller moves on since they no longer live in the community.
“A real estate transaction is already a complex-enough affair laden with different fees and costs for both the seller and buyer,” Friedlander adds. “The last thing we need is for this spiraling problem to spin further out of control for home sellers. A cap on these fees is long overdue and we hope to see relief delivered this spring.”
© 2017 Florida Realtors
