Senate Bill 278: Senate Reversal on “No Charge” for Estoppels

The ability for community associations to charge for estoppels was in question when Senate Bill 278 was initially proposed prohibiting any fee being charged for preparing and delivering estoppel certificates under Chapter 718, Chapter 719, and Chapter 720 Florida Statutes. This sparked intense dialogue throughout the legal arena amongst community association/real estate practitioners and by board members, management companies and owners following the recently introduced bill. It was apparent that further review and analysis was required. Two days ago, an amendment to the bill was introduced with some key takeaways, addressed below, enabling associations to charge a fee for the preparation and delivery of estoppel certificates. Just yesterday, the Senate voted to approve the amended bill.

Fee Caps: While the original bill revoked the ability to charge a fee for estoppel certificates, the amended language restores the previous limits. Interestingly, the bill was changed to repeal the ability to charge an extra fee for estoppel delivery on an expedited 3-day turnaround.

Timeframe for Issuance: This bill proposes to change the deadline for preparing and delivering the estoppel certificates from 10 business days to 5 business days.

Voting Requirement: The bill adds a requirement to annually establish the authority to charge a fee for the estoppel preparation.

Fee Payment: The timeframe in which payment for the preparation of the estoppel is due was revised from the time of ordering it to the time of the closing. The bill provides that the fee will now be paid to the association from the closing or settlement proceeds (eliminating advance payment), and that the property owner is now responsible for paying the fee to the association if the closing does not occur. The bill also authorizes associations to collect any outstanding fee following the same process for collecting assessments.

There are other important effects of the bill and we will continue monitoring the progress of this bill and others making their way through the chambers. We encourage readers to subscribe to our e-newsletter to receive our firm’s legislative updates and future articles and stay updated with developments.

*Please note that this proposed legislation has yet to be enacted.