Estoppel Letter

An estoppel letter (also called an estoppel certificate or status letter) is a document issued by the HOA or its management company that certifies the status of a homeowner's account — the amount of dues owed, any delinquent balance, outstanding violations, pending special assessments, and the date through which dues have been paid. Buyers require an estoppel letter at closing to confirm they will not inherit unpaid debts. In most states, the HOA is legally bound by the amounts stated in the estoppel letter — it cannot later claim additional money not disclosed in the certificate, hence the term 'estoppel' (being stopped from denying what was certified). Management companies typically charge a fee for preparing estoppel letters.

An estoppel letter protects buyers from inheriting undisclosed HOA debts. Sellers should request one early in the transaction process since processing may take several days and will delay closing if not obtained.