This year’s legislative session is boring to say the least, when it comes to pending community association legislation. There is one bill however, Senate Bill 736, which is generating a lot of noise. In sum, when someone is selling a home or a condo unit, it is imperative for the buyer to obtain what is commonly referred to as an estoppel certificate. This certificate is relied upon by the buyer, so that the association gets paid in full when the new buyer takes ownership of the property and ensures that the new buyer is starting with a clean slate.
The law has always allowed for a “reasonable” charge for the preparation of an estoppel certificate. The definition of “reasonable” was left to the imagination and needless to say, there were those who believed they were charged exorbitant fees for the preparation of an estoppel certificate and were in fact being held hostage by the association until payment was received. This year, Senator Stargell thought that the term reasonable needed some clarification. As a result, Senate Bill 736 was filed. The proposed legislation now says:
the fee for the estoppel certificate may not exceed $250 if on the date the certificate is issued, no delinquent amounts are owed to the association for the applicable unit. If an estoppel certificate is requested on an expedited basis and delivered within 3 business days after the request, the association may charge an additional fee of $100. If delinquent amounts are owed to the association for the applicable unit, an additional fee for the estoppel certificate may not exceed $100. The association may not charge a fee for an estoppel certificate that is issued more than 10 business days after it receives the request for the certificate.
Even under this proposed legislation, one can be charged up to $450.00 when the association supplies them with an estoppel letter. Remember, if an association is keeping proper books and records, they should be able to tell you almost instantaneously how much a unit owner owes in assessments. Even if the file is with the attorney, it’s not exactly rocket science to figure out what is owed.
Here are some recent e-mail exchanges between myself, a President and a community association manager about our thoughts on the proposed legislation. I won’t comment any further. Read the exchange and just post any thoughts that come to mind.
From: Roger Kesselbach, (President: Space Coast Communities)
Sent: Friday, April 10, 2015 2:00 PM
To: Glazer, Eric
Subject: RE: Glazer & Associates PA Event
Importance: High
Eric,
I am wondering what is your position on the Senate bill # SB 736. SCCA is fighting hard for this bill not to get through the process.
______________________________________________________________________________
HERE IS MY REPONSE:
From: Glazer, Eric [mailto:Eric@condo-laws.com]
Sent: Sunday, April 12, 2015 9:23 PM
To: Roger
Subject: RE: Glazer & Associates PA Event
Why do you believe the bill is so bad?
Shouldn’t someone be able to get an estoppel certificate they can rely on within a reasonable time and at a reasonable rate?
Here is Roger’s response:
From: Roger
Sent: Monday, April 13, 2015 10:25 AM
To: Glazer, Eric
Subject: RE: Glazer & Associates PA Event
I cannot believe you asked this question. I agree that the title companies should have a time frame for the Estoppel letter but with some additional time granted for the units that have litigation and other more complex closings. Also we feel that a reasonable rate should be set that is why we fought to get the fees adjusted so as to be fair to all involved not just a select few.
That being said we do not believe that associations that are NOT part of the closing should be involved financially if the closing does not happen. We the associations have not the time or the desire to put a lean on a unit because it did not sell within the 60 day time and the association has to pay the bill for what should be the new buyers problem. We are non for profit with boards of volunteers we do this so we can maintain the property value of the association and should not be involved with the buying and selling of real estate. Our documents mandate that we produce the estoppel letter and we have been doing this with NO complaints from the title companies if there are a few that are taking advantage of the system then go after them and let the associations take care of more pressing issues that they face on a daily basis.
_____________________________________________________________________________________So I write back:
From: Glazer, Eric [mailto:Eric@condo-laws.com]
Sent: Monday, April 13, 2015 10:34 AM
To: Roger
Subject: RE: Glazer & Associates PA Event
Respectfully, perhaps you are not aware of the ridiculous charges that some people get hit with when simply asking for an estoppel letter. An association should easily be able to tell what is owed on a unit within a ten day period. In fact, these numbers should be ready at the press of a button by both the association and the association’s counsel, EVEN IF A CASE IS IN LITIGATION. This is a bill about putting the brakes on protecting innocent people who simply want to sell or buy a home in a timely manner without getting ripped off. That’s what the real fight in Tallahassee is all about. People who want little or no restrictions on what is charged to people who simply want a pay-off letter on their home— and if you don’t get that —–I can’t believe you don’t.
____________________________________________________________________________________
Then it gets weird. I get the following e-mail from David Furlow at Leland Management:
From: David Furlow
Sent: Monday, April 13, 2015 9:33 PM
To: Alan Garfinkel, Esq.; Rebecca Furlow; Gary Vanderlaan; Frank Pelot
Cc: Glazer, Eric;
Subject: RE: Glazer & Associates: “Why do you believe the bill is so bad?”
Alan
I am struck by the lack of information and understanding by many individuals involved in the estopple discussion such as Mr. Glazer. Given his involvement in the industry he should have a better understanding of the issue.
He shows serious lack of understanding about what it really takes to prepare an estopple for a community association. Association mangers would be negligent if all they did was simply supply the balance on a ledger. Unfortunately, this is the over simplified version of estopple preparation that is being presented by those proposing the new estopple legislation. It is absolutely an inaccurate characterization of the work involved and the liability associated with the preparation of estopples.
There is much more information and work required for a proper estopple than is being portrayed by realtors and closing agents. I have attached some information that might be helpful to enlighten others about the what is actually required for the preparation of estopples and ownership transfers for a community associations.
I would be more than happy to have a conversation with Mr. Glazer about this issue.
_____________________________________________________________________________________To Which I respond:
I am struck by the lack of your ability to simply spell the word estoppel correctly, having misspelled it so many times in one e-mail.
Yet — I don’t understand the situation. You can’t even spell it.
Hysterical.
Your thoughts are welcome.
