At Ardent, our mission is to simplify the HOA management process for board members. In this blog post, we aim to shed light on an essential concept that frequently arises during property transactions–the HOA Estoppel or Resale Certificate.

A resale certificate, known as an estoppel in some states, holds a pivotal role in real estate transactions, particularly when an HOA is part of the equation. This document is a comprehensive record of any fees, dues, or assessments that the homeowners owes to the HOA, and can be critical to the property sale process.


The Purpose of HOA Estoppels

The primary objective of an estoppel letter is to safeguard the interests of all parties involved in a property transaction. If the previous owner owes fees to the HOA, for example, a potential homebuyer will need to know. An estoppel letter is a peek behind the curtain, offering a transparent account of the property.


Who Pays the Estoppel Fee?

The responsibility for paying the estoppel fee can vary and is usually determined during contract negotiations. It can be either the buyer or the seller but in most cases, the seller bears responsibility.

Who Orders the Estoppel Letter?

The title company or the attorney handling the property transaction typically takes charge of ordering the estoppel letter. They’ll ensure that the document is accurately prepared and filled out before the closing of the deal.

What Does Estoppel Mean for Closing?

When it comes to closing a deal on property, the estoppel letter serves to certify any financial obligations linked to the property. It lets the buyer know exactly how many payments or violations are pending, promoting a smoother and more transparent closing process.


The Contents of an HOA Resale Certificate

A typical HOA resale certificate includes a treasure trove of information, ensuring transparency and clarity in the property transaction. Typically, you’ll find the following information in your estoppel:

  • Pending Violations or Fines: This section highlights any ongoing violations or fines against the property, ensuring the buyer is aware of any existing issues.
  • Financial Standing: The current financial status of the homeowner with the HOA is detailed, encompassing unpaid dues or assessments that might be lurking in the shadows.
  • Assessment Details: This section provides information about the regular assessment amount and its frequency, a critical element to understanding the ongoing financial responsibilities.
  • Special Assessments: Any planned or ongoing special assessments are disclosed in the document, giving the buyer a complete picture of potential financial obligations.

These elements combined, contribute to the transparency and honest of the property transaction, ensuring that the buyer comprehends their potential responsibilities and costs.



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