Legal Update

Consumer title

12425 28th St. N. Suite 301

St. Petersburg, FL 33716

Ph: 727-539-0900

New Legislation in Florida to Halt Abusive Practices by HOA Attorneys

For the past several years we have been at the mercy of management companies, associations, and/or the attorneys for the associations to provide us with estoppel letters and certificates at their discretion and according to their rules. Subsequently, we have endured excessive attorney fees, ridiculous wait times for estoppel letters, and up-front fees to even process the order for the estoppel. Per FL Statute 720.30851 Estoppel certificates, the association has 15 days after a request is submitted, and most take full advantage of this. The problem with that is that many associations, or attorneys for the association provide an estoppel that is good for only 3 days. If the closing date does not fall within those 3 days and/or if the lender cannot provide a package to you within those days, the closing is delayed then the process starts all over again. All of this of course comes at a great cost to the seller.

Finally in February of 2015, Representative John Wood, Chair of House Banking and Insurance, and Senator Kelli Stargel, Chair of Senate Higher Education, filed HB 611 and CS/CS/CS/SB 736.  These bills reduce the time by which associations must deliver the certificate, modify remedies for the failure to respond timely to requests, set caps on fees, and prohibit the forced advance collection of the fees in purchase refinance transactions.

HB611 died on the calendar, but The Estoppel Bill” (SB 736) passed all three Senate Committees, and all three House committees and the Community Association Management Companies and their lobbyists voiced support.

However, it died when they went to the Senate.

What the bill SB736 is trying to accomplish is this:

-Estoppel information is valid for time certain (30 days if sent electronically, 35 if by US Mail)
-Just as with current law, payment for the estoppel certificate fee is the obligation of the owner
-issuance of the estoppel certificate fee cannot be conditioned upon payment in advance
-Estoppel certificate fee is due from closing proceeds
-Fees are capped, with CPI increases

Representatives are still pushing hard to get changes in the estoppel certificate process. Rep. Kathleen Passidomo filed amendments to a bill in hopes of securing statutory language requiring “pay at closing” for estoppel certificates. But the amendments were withdrawn. And The House was unable to vote on these provisions due to procedural hurdles; however, the debate continues and many legislators stood in support of Rep. Passidomo’s efforts. So even though the efforts were not successful they are already strategizing for next year.

The good news in all of this is that these abusive practices are being looked at, and those leading the fight are gaining support.

In addition to the efforts to pass these bills, in February of 2016 The Department of Financial Services issued a letter interpreting provisions in the Florida Insurance Code and the new unlawful inducement rule in regards to the Associations and Attorneys for the same, requiring title agents to prepay for estoppel letters The letter stated that this violates the Florida Insurance Code as an “inducement for title insurance.” The provisions as cited in the rule are Sec. 626.9521 and Sec. 626.9541(1)(h)(3).

But there are questions regarding this, such as:

  • Does it include attorney agents? The DFS does not regulate attorneys but they have to follow the law, right?
  • If the title agent doesn’t advance the payment, who will pay the management company/association in order to get the estoppel certificate?
  • Nothing in the letter (or current law) prohibits management companies/associations from requiring advance payment.

Mathew Guy with the DFS confirmed  the position in the letter but went on to say that if the title agent has something in writing in the file from the person obligated to pay the estoppel fee that constitutes an agreement to reimburse, the title agent may advance the cost.

And note that the DFS is not going to enforce this rule anytime soon. They want to give everyone time to learn about the rule. They will be providing more information on their website. And, our underwriters are staying on top of this and will continue to keep us updated as well. To be continued…


LynnDee Snyder




March 1, 2016


After several attempts at reducing the redemption period on foreclosed property, Alabama has finally passed a law that cuts the redemption timeline in half. Effective January 1, 2016, Act 2015-79 goes into effect and although this is a much anticipated and needed law, be advised that the new redemption law is narrowly construed so be aware of the specific circumstances that allow the redemption period to be reduced to 180 days.

180 Day Redemption Period Requirements

  • The property must be residential property and be homesteaded in the tax year during which the sale occurred.
  • The mortgagor (borrower) must be properly notified of his or her redemption rights.  Notice must be given 4 times. Three times via publishing in a newspaper situated in the county where the residential property is located. The fourth notice must be mailed to the mortgagor 30 days prior to the foreclosure sale.
  • The mortgage, junior mortgage, or judgement that allows the foreclosure must be dated on or after January 1, 2016.  So anything prior to January 1, 2016 will not fall into the 180 day redemption period.

Although the new law only pertains to homesteaded residential property that is mortgaged after January 1, 2016, the state legislature has put Alabama more in-line with other states. The historical one-year redemption period still applies to all other properties that have been foreclosed.  For example, commercial property, residential property that is non-homesteaded, or newly constructed residential neighborhoods where the homes have not been sold would all still fall under the one year redemption period.

Alabama’s new 180 day redemption period is a good step in the right direction.  It will allow foreclosed properties that meet the requirements to be resold quicker which will protect communities and help real estate markets throughout Alabama.

*This article is provided for general informational purposes only. It is not intended as professional counsel and should not be used as such. You should contact your attorney to obtain advice with respect to this or other legal matters.

By: Stuart Gordan, Esq

McCalla Raymer Pierce, LLC
1544 Old Alabama Road Roswell, GA 30076
Office: (678) 281 – 6524 / Ext. 16524
Mobile: (770) 842 – 6478