What is an estoppel letter and why do you need one?
An estoppel letter is a legal document provided by the seller’s Homeowners or Condominium Association, outlining the current owner’s financial standing, past due balances, current fees due and lists all future special assessments due, outstanding covenant violations, and other required information required by law for the sale and closing of the property. A title company will normally contact the Association for this information in anticipation of a closing. The management company or association is allowed to charge a fee to prepare the estoppel letter and is required to respond within a certain number of days from the date of the request. If the seller is in collection with the Association due to their failure to pay assessments, an estoppel letter will likely need to be obtained from the HOA’s attorney. Fees for the estoppel letter are paid in advance of the closing.