An estoppel letter is a document that includes the amount of money a home seller is liable to pay to HOA. The other names of estoppel letters are HOA letters, Current dues letters, HOA Certificates, and Resale letters, to name a few.
If you are a member of HOA and want some information regarding estoppel letters, we have got you covered. Here, we will tell you why HOA Estoppel letters are important, along with the template to help you while writing such letters. Keep reading to find out more.
Why are HOA Estoppel Letters Important?
Estoppel letters form a significant part of the buying or selling of a unit that is under HOA. The HOA letter is filled with vital information as far as the landlord-tenant relationship is concerned.
If someone is looking to purchase a real property having rental premises, he/she must get into the nitty-gritty of the HOA letter.
Apart from this, HOA estoppel letters hold substantial value for lenders who are looking to take real property as security. It is the duty of the HOA management company to provide the lender with the HOA Estoppel letter to know if the property owner owes any HOA outstanding balances.
HOA Estoppel Letter Template
There are buyers or lenders who often request estoppel letters to ensure that there are no outstanding obligations on the property.
Some HOAs charge fees to prepare an estoppel letter. However, if you are going ahead to sell your home or taking a loan, you can pay that fee to steer clear of any further problems. Meanwhile, we have come up with an HOA estoppel letter template to help you out.
Date:
To:
Subject:
Property Location:
(Amount) is the mortgage balance as of (Date). The mortgage due per day is (Amount). On (Date), (Person’s Name) last paid his/her mortgage.
The numbers mentioned above in this estoppel letter will be effective till ().
Kindly send your funds to (Account’s Name), (Bank), (ABA Number), (Account Number).
You can also send wire instructions to (), Attention: ()
(Date)
(Owner’s Name)
(Lender’s Name)
As: ()
Protect the lender and the buyer.
The two primary parties in the sale of the property include the buyer and the lender. The HOA Estoppel letter affects both of them. Lenders need to check whether the estoppel letter they are sending meets the lending regulations or not. The lender can find out whether the seller has ever made unauthorized modifications to the property that require attention or correction with the help of the message that shows fees to be charged against the current owner.
The buyer can see whether there are any current outstanding fees through the estoppel letter. It should be received by the buyer before the closing.
Some FAQ’s around HOA Board Resignation Letter:
In what situation would an HOA Estoppel certificate be used?
The HOA Estoppel certificate is used in real estate transactions that involve properties within the homeowner’s association. This is a crucial certificate that provides the financial and legal status of the property within the HOA.
What are the requirements to establish an Estoppel?
Start by requesting an estoppel certificate. Then, submit your request and pay the fees. Include all the essential details in the request, and then HOA will gather and verify the information. After completion of all the formalities, you will be delivered the estoppel certificate, which you can use in the real estate transactions thereon.
What is the defense of estoppel?
The defense of estoppel is a legal principle that it would be unjust if any person intentionally or in any other manner has led other people to believe and act upon such representation; neither he nor any other representative can deny the truth in court proceedings.
Some HOAs charge fees to prepare an estoppel letter. However, if you are going ahead to sell your home or taking a loan, you can pay that fee to steer clear of any further problems. Meanwhile, we have come up with an HOA estoppel letter template to help you out.
Conclusion:
Keep the information you include short, simple, and concise to avoid any confusion about the account status. Ensure to get it signed by the authorized signatory of the HOA. It could be a board president or property manager. You can use the above template for all the necessary information and customize it accordingly, depending on your situation.