When and Why You Need to Obtain an HOA Estoppel Certificate
An HOA (Homeowners Association) Estoppel Certificate is ordered when a home or condo located within an HOA is in escrow. The certificate lists the seller’s annual fees for belonging to the HOA and whether or not their dues are paid in full or if there are dues payable at the time of sale.
Property Debt Research can request this certificate on your (the buyer’s) behalf from the HOA board. The board of an HOA is made aware when a sale of a house is pending in their area and who will be buying the property so they can issue the certificate. In some cases, there are fees charged by the HOA to obtain the certificate(s). The fees can run as high as several hundred dollars. An HOA Estoppel Certificate is a legally binding document and is required to be accurate.
What a Buyer Should Know About HOAs and How it Affects an HOA Estoppel Certificate
HOA’s sometimes have long-term plans that involve placing assessments on the members. It might be they have made plans to improve roads, the lighting of the streets, or other major maintenance or improvements to community property owned by the HOA. As a buyer, you should know about building fees and continuing maintenance that could become your responsibility. An HOA Estoppel Certificate will indicate if the seller owes any fees for projects that are being planned.
If there are past due amounts listed on the Estoppel Certificate, these amounts should be collected as a part of the closing. Some states will hold the buyer responsible if there are past due amounts, while other states will exempt a buyer from past due amounts with an HOA account. Property Debt Research will advise you if there is a buyer responsibility attached with the Estoppel Certificate. Typically, a buyer is only responsible for future and current fees.
When to Obtain an HOA Estoppel Certificate
If you are purchasing a property that is supervised by an HOA (Homeowners Association), your lender will require an HOA Estoppel Certificate before you can close on the sale. It is critical to the sale of the property that you receive this certificate because if there are outstanding debts owed to the HOA, they could end up placing a lien on the property.
An HOA Estoppel Certificate must be signed by an HOA Board member. Once signed, this certificate becomes a legally binding document, and the HOA cannot come back to you (the buyer) for any collection of additional fees. If there is any information not listed in the original Estoppel Certificate, it becomes null and void.
Who to Contact for an HOA Estoppel Certificate
Property Debt Research can request an HOA Estoppel Certificate on your behalf for you to receive and review before your closing. We are the most trusted source in obtaining HOA Estoppel Certificates and performing Municipal Lien Searches in the area. With our years of experience, we have in the field, we are able to provide fast turnarounds. We also fully understand the real estate industry and guarantee prompt and accurate results.