An estoppel in a real estate transaction is a document that is applicable to closings where the property is part of a condominium, coop, or homeowner’s association. The estoppel is ordered from the association. It asks the association(s) for information that the closing agent uses the answers to complete the settlement statement and close the transaction.
Examples of information requested from association(s) in the estoppel include:
• Maintenance dues amounts and frequency.
• Special assessment dues amounts and frequency, if any.
• The day of the month association dues must be paid.
• The amount of the late fee for late payments.
• Outstanding violations against the property.
• Whether association approval is required.
• Whether there is a right of first refusal.
• Outstanding amounts owed to the association.
A ledger typically accompanies the estoppel. The ledger will show all payments made to the association from the seller to the association over a specified time period. In addition, the ledger will show any outstanding amounts owed.
Once the closing agent has the estoppel, the settlement statement can be completed. After closing, the closing agent will pay any fees owed to the association that are to be paid at closing.