In 2014 and 2015, multiple bills arose in the Florida Legislature attempting to regulate perceived abused in the issuance of estoppel generation. Despite the statewide opposition of Community Association Managers, the Community Association Institute, associations and their millions of voting members, these bills have continued to garner support. The newest iteration of the bill, SB 736, continues to ignore the concerns and suggestions of those involved in community association government.
The bill states that an association shall issue an estoppel certificate within 10 business days after receiving “written request.” There is no definition of “written request” and whether this includes an electronic request, email, or a letter. The 10 day time limit coupled with the demand for a “written request” creates problems. If a third party service is utilized to deliver an estoppel, the traffic between the party requesting the estoppel and the third party service will need to be closely monitored to ensure the 10 business day deadline is not missed.
The bill allows the estoppel certificate to be valid for a 30 day period. Therefore, any delinquent amounts that are calculated to be due during this 30 day period can be included in the estoppel certificate which states the monies already owed. However, if any additional amounts come due during this period that were not foreseeable at the time of the issuance of the estoppel, such as special assessments or fines, there is no remedy for their collection in the current bill.
The limit of a $100 fee for preparing an estoppel certificate is still present in the bill. The language states that an association or its authorized agent may charge a fee, which may not exceed $100 if there are no delinquent amounts owed to the association for the applicable unit on the date of the issuance of the estoppel. If there are delinquent amounts due for the applicable unit, the fee for the estoppel certificate may not exceed $300.
In addition, the association may not charge a fee at all if the estoppel is issued past the 10 business day request deadline. However, all past due assessments are still due, even if the association loses the ability to charge for the preparation of the estoppel certificate. If the estoppel is requested in conjunction with the sale or refinancing of a unit, the fee is to be paid to the association from the closing or settlement proceeds. If 60 days have passed since the issuance of the estoppel and closing has still not occurred, the fee will be collected in the same manner as an assessment against the unit. This presents the same problems as the original delinquent payments, which had led to the issuance of the estoppel. The conversion of the estoppel fee to eventual association assessments leads to more administrative and collection issues for the associations.
While the Legislature amends and passes these bills in an attempt to curb purported abuse of estoppel generation, they in fact are creating more confusion in an already complicated facet of the law. Associations have enough issues involving delinquent assessments without the Legislature complicating matters further.
Thanks to Judith Tankel, J.D. for help in compiling this article and to CEOMC for continuing to publicize this issue.