Florida Community Association Manager Practice Exam

Which of the following statements about estoppels is true?

1. Estoppels can only be used in court

2. An estoppel must be provided for every assessment

3. Estoppels require a processing fee

4. Estoppels are not necessary for transactions

The correct answer is: Estoppels require a processing fee

The statement that estoppels require a processing fee is accurate because, in many contexts, the generation of an estoppel certificate often incurs a fee to cover the administrative costs involved in preparing the document. This fee is typically charged by the association to the individual or entity requesting the estoppel, which reflects the time and resources needed to compile the necessary information about the assessments, balance dues, and other relevant financial details regarding an owner's account. Estoppels serve as a formal statement confirming the financial standing of an owner in relation to their obligations to the association, and they are frequently utilized in real estate transactions to provide assurance to potential buyers or lenders regarding the status of dues. While there may be situations where a transaction occurs without an estoppel, it is generally recommended to obtain one for clarity and protection. Therefore, the processing fee associated with estoppels aligns with the established practices in managing community associations.