What Is in an HOA Estoppel Letter?


Quick Answer

An HOA estoppel letter states any fees, dues or assessments for a property governed by a Home Owners Association. The HOA produces the estoppel letter during the sale or refinance of a property. Once the estoppel letter has been produced, the HOA may not add any additional charges.

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Full Answer

Estoppel letters are required in every state when a property that is governed by an HOA is sold or refinanced. Although specific laws vary by state, all states require the estoppel include any debts owed to the HOA. In many cases, the amount of debt in the estoppel becomes part of the price of the property.

Prior to the sale of the property, the bank or lender requests the estoppel letter from the HOA. The letter must include all recurring fees, penalties, dues or outstanding balances owed to the HOA. Once the estoppel letter is delivered, the document is legally binding and my not be modified.

In addition to amounts owed, estoppel letters should include the name and address of the HOA and payment information. Any fee the HOA charges for preparing the estoppel letter is also included in the letter. The letter includes the current property owner's name and the property address. In most states, buyer and seller are equally responsible for any debt owed to the HOA at the time of the sale.

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