Letter of Good Standing (Estoppel) Requests
Estoppel, as a legal concept, means someone certifies that certain facts are correct as of a specified date.
A HOA estoppel letter certifies that the listed financial obligations are owed by the current homeowner as of the date specified in the letter. Financial obligations owed to an HOA can include past-due debt, monthly maintenance fees, assessments for repairs or special projects, late fees, fines and interest.
The estoppel letter is legally binding!
The HOA cannot add newly discovered debts to the estoppel letter after it has been submitted. The financial obligation often is included in negotiations to determine closing costs for the sale of a home. Because this document is legally binding, it requires significant due diligence on the part of the HOA board, specifically the Treasurer to check through every aspect of the residence in question and then cross-reference it to city and other records.
This is not as easy as it sounds. Because the HOA Board has a three-year term commitment, that means that the current Treasurer and Board may have to sort through a multitude of systems that were used by the various volunteer members over the years (especially if the resident leaving has been here for decades). We have recently transitioned to new Board members again and are establishing new processes that will hopefully automate a lot of this work for us.
A HOA estoppel letter certifies that the listed financial obligations are owed by the current homeowner as of the date specified in the letter. Financial obligations owed to an HOA can include past-due debt, monthly maintenance fees, assessments for repairs or special projects, late fees, fines and interest.
The estoppel letter is legally binding!
The HOA cannot add newly discovered debts to the estoppel letter after it has been submitted. The financial obligation often is included in negotiations to determine closing costs for the sale of a home. Because this document is legally binding, it requires significant due diligence on the part of the HOA board, specifically the Treasurer to check through every aspect of the residence in question and then cross-reference it to city and other records.
This is not as easy as it sounds. Because the HOA Board has a three-year term commitment, that means that the current Treasurer and Board may have to sort through a multitude of systems that were used by the various volunteer members over the years (especially if the resident leaving has been here for decades). We have recently transitioned to new Board members again and are establishing new processes that will hopefully automate a lot of this work for us.
What's in the Letter?
Based on feedback from Title companies, realtors, and residents, we are recreating the form letter to make it more informative and easier to use. It will contain the elements required by law; any other information requested for a specific form may be subject to additional fees depending on the additional information requested.
The estoppel letter includes certain identifying information, such as the HOA name, homeowner name, property address and the total financial obligation the current owner owes to the HOA. The total amount owed might include calculations of monthly fees up to the future closing date of the sale. The letter includes instructions on how to make payment, if anything is owed, to the HOA and the signatures of the authorized HOA agent. Attachments sent with the estoppel letter might include the HOA’s schedule of fees and assessments, the payment ledger for the property in question and information about liens or unresolved violations by the current homeowner.
The estoppel letter includes certain identifying information, such as the HOA name, homeowner name, property address and the total financial obligation the current owner owes to the HOA. The total amount owed might include calculations of monthly fees up to the future closing date of the sale. The letter includes instructions on how to make payment, if anything is owed, to the HOA and the signatures of the authorized HOA agent. Attachments sent with the estoppel letter might include the HOA’s schedule of fees and assessments, the payment ledger for the property in question and information about liens or unresolved violations by the current homeowner.
Requesting an Estoppel (Letter of Good Standing) Certificate
There are three important facts that anyone requesting this document must understand:
1. There is a charge for providing this document unless the document is needed for refinancing or other activities that do not include change of home ownership.
2. This document must be requested a minimum of ten (10) business days in advance of the closing or date needed. Expedited requests are subject to prepaid additional fees.
3. The North Fairview Farms Homeowners Association Board of Directors is comprised of residents who volunteer their time. All Directors have other jobs and commitments; none work nor are available full-time as it is written in the Bylaws and CCR that these positions are uncompensated. We strive very hard to accommodate every request from every resident as quickly as possible because as residents ourselves, we understand that when you need something, you always need it ASAP.
1. There is a charge for providing this document unless the document is needed for refinancing or other activities that do not include change of home ownership.
2. This document must be requested a minimum of ten (10) business days in advance of the closing or date needed. Expedited requests are subject to prepaid additional fees.
3. The North Fairview Farms Homeowners Association Board of Directors is comprised of residents who volunteer their time. All Directors have other jobs and commitments; none work nor are available full-time as it is written in the Bylaws and CCR that these positions are uncompensated. We strive very hard to accommodate every request from every resident as quickly as possible because as residents ourselves, we understand that when you need something, you always need it ASAP.