Question: I have a question regarding estoppel letters. Recently, a prospective buyer of a unit in our condominium requested a letter from the association certifying whether there were any delinquent assessments owed by the owner. The owner had recently given us a check for all unpaid amounts, and so we prepared an estoppel letter certifying that the account was up to date. After the buyer closed on the unit, the check bounced, and so now there is a large delinquency on the account. Do we have any ability to collect these amounts from the new owner? Signed, L.B.
Dear L.B.,Answer: This is a situation that is uncommon, but it does come up from time to time. The Condominium and HOA Acts both provide that a unit or lot owner, or his or her designee, may request a certificate from the association stating all assessments and other money owed to the association with respect to the unit or lot. Any person other than the owner who relies on the amount stated in the certificate is protected from owing any additional amount. So, when an estoppel certificate is requested in conjunction with a sale of a unit, the buyer of the unit may rely on the amounts stated in the estoppel, and the association is bound by whatever amount is in that estoppel. This is why the careful preparation of estoppel letters is crucial, and part of the reason that the preparer is authorized to charge a reasonable fee for the certificate.