Estoppels serve many purposes, as you see above. We hope this article answers any questions you have about estoppels and how they function. An estoppel letter can be valuable evidence in verifying the details of the legal agreement between the HOA and the buyer at the time of the sale. The homeowners association itself is protected in the event that a lawsuit ever occurs over financial disputes with a homeowner. An HOA is a homeowners association, which is an organization that aims to structure a clean and cohesive place to live for residents.Finally, an estoppel letter will help the lender determine whether the sale meets the legal obligation of the HOA. They will also be able to determine whether they will be required to pay any fees to the HOA. The lender also benefits from an estoppel letter, as it provides them with the information they need to include any appropriate expenses in closing costs for the sale.The letter also provides the seller with an opportunity to reconcile any outstanding balances with the association.

An estoppel letter lets the seller fully disclose any problems or expenses with their property before they sell.The buyer can also see whether the seller has any outstanding payments and can request that they bring the payments up to date before the sale closes. The buyer benefits from having a clear understanding of what his/her expected financial obligations will be, including monthly association dues and any special assessments for upcoming projects, such as repaving driveways, landscaping, or adding new amenities.In short, an estoppel letter helps to ease the transition of a property from a current to a new owner, and exists to protect and benefit all parties involved in the transaction: By law, those preparing the estoppel letter have 15 days to provide it and may charge an additional rush fee if it’s needed before the deadline. Additionally, payment is usually required up front, rather than at time of closing. The fee for an association or HOA management company to prepare an estoppel letter will vary widely and can cost anywhere from zero to $500. It will also certify if, and how much, the current homeowner owes to the association in liens, unresolved fees, or other charges, as of a specified date. An estoppel letter should include the current homeowner’s name, property address, and financial obligations (such as monthly dues and upcoming special assessments). HOA bylaws will usually contain rules for an estoppel letter submission, as well as guidelines for responding to letter requests. A lender or bank requires an estoppel letter or certificate from the homeowners association prior to closing on a property within the HOA. Estoppel is a legal concept meaning that someone certifies the accuracy of certain facts as of a specified date.

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