What is an Estoppel Fee?

Estoppel Fees: What You Need to Know

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Estoppel fees are one of the less commonly discussed closing costs-- but they can still be expensive. An estoppel fee is typically charged by a homeowner's association (HOA) to the title company in order for the HOA to check the status of the seller's account. By doing so, they can see if the seller is behind on any payments that the buyer may be responsible for. 

Who Pays Estoppel Fees? 

In the majority of cases, the seller is responsible for reimbursing the title company for the estoppel fee, and it will usually appear as a line item on their closing costs statement. However, this isn't always the case-- and if you're a buyer who realizes they're being charged an estoppel fee, you may want to take this up with the seller. Remember, almost everything in real estate is negotiable, so it always pays to keep your eyes open-- especially if you want to save the most money possible. 

How Much Do Estoppel Fees Cost? 

Estoppel fees vary from state to state, and while some states have specific laws to limit their costs, others do not. For example, in Florida, estoppel fees were recently limited by a 2017 law that prevents them from exceeding $250 per property (as long as the current owner is in good standing with the HOA). Previously, estoppel fees had reached up to $650 in many areas around the state. 

What Buyers Need to Know

If you're buying a home or condo, and you know that your seller (or your title company) is paying an estoppel fee to their HOA, you might think you're out of the woods-- but not always. Here's the thing; homes in some areas may have up to 4 homeowners associations, each which can theoretically charge thousands of dollars to a homeowner each year-- and there's no guarantee that one homeowner's association communicates with (or even knows about) the others. 

So, even if you see that the property is current from one HOA, it may be delinquent on dues from other HOAs. That's where an extremely thorough title search can help; by doing the research to make sure you won't be charged a large fee the moment you purchase a home, your title company can save you significant headaches down the line. 


To learn more about how to avoid unexpected costs when you purchase a home, fill out the form below and an experienced Florida Title Company attorney will get in touch.