What is an Home Owner Association (HOA) Estoppel Letter?

Jul 8

Written By Diana

Good morning and welcome to Houston First Time Home Buyers Edition, where we provide useful information to help Houston first time home buyers make the most informed decision when it comes to buying, decorating, and maintaining their first home. Today, we are just touching, really quickly on what is an estoppel letter and why it is a necessary part of your real estate transaction.

Typically requested by the title company, an estoppel letter also known as estoppel certificate, HOA status letter and resale certificate, is a legal document that detail exactly how much a homeowner currently owes to the association in fines, special assessments fees, and violation fees, as of a specified date.

This letter is usually requested from the homeowner's association prior closing on homes located within the HOA. This letter is a very necessary part of Houston' real estate transaction and extremely important for home buyers, purchasing their home within an HOA, because without it, they could potentially inherit unpaid dues, special assessments and or fines from the previous owner. Most lenders will not close on a loan without this letter. Information found in this letter includes but not limited to:

Transfer fees.
Violations fees.
Fines fees.
Special assessments fees.
Current HOA dues.
Homeowner's name and address.

One of the great things about this letter is, once it is issued by the HOA, the association cannot make a claim for additional fees later. This put the home buyer at ease knowing that all the fees, fines, violations and special assessments owed by the previous owner has been paid.

Although some association does not charge a fee to request this document, others can charge up to $500, typically paid by the seller. During your home buying process and before closing if you have question regarding this document, you can always speak with the title company. Your Realtor will provide you with the title company contact information. See? I told you it would be quick:)

As always, thank you so much for stopping by. Remember, if you or someone you know is thinking of purchasing a first home, please give us a call or Email us. We are here to help. We have been helping Houston first time home buyers since 2011 and we can help you. I hope you have an amazing day. Until next time...Diana