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What’s the Difference Between an HOA and a Tenant Estoppel?
Commercial Real Estate HOA/Estoppels

What’s the Difference Between an HOA and a Tenant Estoppel?

Amanda Farrell

Real estate transactions are complicated processes, and no two are exactly alike. It can be confusing for new homebuyers and investors to wrap their heads around all the documentation and research involved during each step from loan application to inspection to closing day. 

Title agents work behind the scenes to spot issues and fix them before you get to the closing table. In most cases, you’ll never know there was an issue at all. Of course, to find these problems, title agents must dig deep into the public records and request additional information from any party that might have an interest in the property. 

If you’re buying a residential property within a community association or investing in a property with a current tenant in place, one vital document is called an estoppel. Sometimes, and in certain areas, title professionals use the term estoppel in real estate to refer specifically to the type found in residential transactions. However, it’s essential to understand the difference, why they matter, and when you need one or both.    


Defining Estoppel

An estoppel is a legal sanction to keep a person or entity from breaking a promise. They are “estopped” or prevented from changing the terms of an agreement, asserting a right, or making a new claim. In court, estoppel is sometimes called the rule of evidence. Estoppel is applied in many forms within common law legal systems, but it’s most often related to contract law, including insurance, banking, and employment. 


What does that mean for your real estate deal? 

It depends on whether you’re purchasing a residential or commercial property. 


Estoppels: Residential vs. Commercial

Real estate transactions are usually divided into two main categories: 

  1. Residential
  2. Commercial


If a residential property is located within a community association like a homeowner’s association (HOA) or a condominium owner’s association (COA), an association estoppel is listed on the title commitment. This document is a requirement for issuing a title policy on all association-governed homes because the information it contains can impact a new owner or lender’s interest in the property. 

If an investor is considering a multi-family property or a rental with a current tenant in place, a tenant estoppel is requested to verify important details about the lease terms. 

Whether a part of a residential or commercial sale, an estoppel is an integral part of a buyer’s and lender’s due diligence. 


What is a Homeowner’s Association Estoppel?

An association estoppel is a term used to describe a legal document obtained from all associations governing a specific property. The information includes a breakdown of the dues, payment schedule, special assessments levied by the association, and any outstanding fees or fines. 


Get a 360 view of HOA Estoppels. Download our Guide!


Estoppel is a common term used in Florida and few other states, but the documents may go by other terms, including: 

  • HOA Letter
  • HOA Status Letter
  • HOA Closing Statement
  • HOA Resale Package
  • HOA Certificate
  • Demand Letter
  • Current Dues Letter
  • Resale Certificate
  • Resale Disclosure
  • Resale Packet
  • Estoppel Certificate
  • Condo Certification


This information should be presented to the buyer during the inspection period so you can review and understand the HOA fees. Living in a community association provides perks like gyms, pools, golf courses, and community centers. Naturally, there is a cost to maintain these amenities, so the HOA Estoppel alerts buyers to what those expenses are. 

Other important HOA documents are obtained during the buyer’s due diligence process, like the Declaration of Covenants, Conditions and Restrictions, the By-Laws, the Rules and Regulations, and the Articles of Incorporation. Most community associations don’t simply require a financial commitment, but a social one as well — a promise that homeowners will abide by specific rules that may limit personal expression. 

Before finalizing the sale of a property in an HOA, buyers should carefully read these documents to understand the terms of their membership fully. 


Why is an HOA estoppel important? 

During a real estate transaction, buyers should get as much information in writing as possible. Never rely on verbal confirmation from an association, municipality, or other parties with the right to place a lien on the property.  


In addition to providing the buyer with details about the HOA fees, the estoppel letter also reveals: 

  • If there are any open violations
  • If there are any outstanding dues or liens from the current or previous owner
  • If there is a capital contribution fee, resale fee, or other fees due and the amount 
  • If there is a buyer approval required by the board of directors
  • If there is a right of first refusal
  • A list of contact information for other associations
  • Contact information for all insurance maintained by the association 


An association waives the right to collect more money than what is stated in the estoppel letter. 


This legally binding document prevents or “estops” the association from seeking more money after closing should they realize they’ve made an administrative mistake. However, under Florida Estoppel Law, an association has a right to issue a corrected estoppel letter within the effective date if: 

  1. The closing or refinancing hasn’t been completed yet
  2. No additional fee is charged for the amended certificate 
  3. A new effective period begins on the same date the new certificate is issued


State rules on what an association is required to provide can vary, so buyers should ask their real estate agents for guidance and research before making an offer on a home in an HOA


What is a tenant estoppel? 

This is an estoppel certificate signed by the tenant of a rental property confirming the current terms of a lease. When a landlord decides to sell or refinance the property, the buyer or lender usually requests this information as part of their due diligence process. 

In addition to confirming the terms of the written agreement, the tenant has an opportunity to state what verbal agreements exist with the landlord. The tenant estoppel helps preserve these agreements and gives the new investor or lender a clear understanding of their potential obligations and rights. 


Why is a tenant estoppel important? 

Like with a residential purchase agreement, commercial transactions require a lot of documentation, which should be reviewed during the inspection period. Tenant estoppel certificates contain details like: 

  • Tenant’s name
  • Tenant’s contact information 
  • Tenant’s address
  • Lease terms like start and end date
  • Monthly rent due
  • Security deposit amount 
  • Any past-due rent payments
  • Any rent paid in advance
  • Amendments to the lease 
  • Any maintenance not completed by the landlord as required by the lease
  • Any additional concessions or verbal agreements from the landlord
  • Any failures of the tenant or landlord to adhere to the lease 
  • Any reasons the tenant may have for non-payment or failure to meet other obligations outlined in the lease


With this information in hand, potential buyers can conclude whether the statements of a landlord match that of the tenants and resolve any discrepancies before closing. The contents of this estoppel, like an HOA estoppel, legally bind both the landlord and tenant to those terms. If legal issues arise in the future, this document will be reviewed by the court and presumed to be true.  

This estoppel certificate is usually obtained for larger commercial properties, like apartment buildings and multi-family properties. It’s less common for residential properties with four or fewer units since there is less risk with fewer leases, and a traditional property inspection can determine potential issues a current tenant may have with the property. However, it’s still beneficial to request one because it will explicitly state unwritten agreements that might not be in the lease, like storage spaces, parking, or the number of and type of pets the tenant has. 


Does a tenant have to fill out an estoppel? 

Requirements to complete tenant estoppels are usually outlined within the written lease agreement. Failing to complete one when required can lead to eviction or a lawsuit. 

Even if filling out this estoppel certificate isn’t required, it’s usually in the tenant’s best interest to do so. If there are any oral agreements with the landlord, this is a chance to document that. In situations where the tenant lives in a rent-controlled jurisdiction or has protections against certain types of evictions because of age, disability, or terminal illness, the estoppel letter will alert the new investor of these privileges and rights. 

Tenants should carefully read the estoppel certificate and ensure the information is accurate, complete, and wholly reflects all written and verbal agreements. Estoppel letters and leases are read by courts when the ambiguity of rights and responsibilities arises, and sometimes, the estoppel will supersede the lease.  

If renters have any questions or concerns about completing an estoppel certificate, they should reach out to a tenant rights attorney or contact the appropriate local agencies for assistance.


How to get an estoppel for your real estate deal  

So now that you know the difference between these two types of estoppel certificates and why they’re important to your real estate transaction, how do you get one?

For residential properties located within an association: 

  • The real estate contract will determine who pays for the HOA estoppel (usually it’s considered a seller’s cost) 
  • A title agent or real estate attorney will ensure that the estoppel is obtained directly from the association, or they’ll work with a third-party title support company like PropLogix. 
  • PropLogix property analysts determine all governing associations for the property in question. While it’s required for an association to provide contact information for all known associations, sometimes, there may be an unknown sub-association. Some properties can have up to four or more associations between the main, sub, and club associations requiring dues. 
  • If offering cash on a condo or HOA home, we advise working with a title professional to obtain this information and protect your interests with an appropriate title insurance policy. 
  • If you decide to forgo title insurance or counsel from a real estate attorney, follow these steps to order an HOA estoppel properly. 


For real estate investors and commercial deals:

  • Current landlords must obtain these certificates from their tenants based on their contract with a buyer or a refinance deal with a lender.
  • Add tenant estoppel certificates into the terms of your leases
  • Work with an attorney or use a template to create a tenant estoppel certificate containing all the information you may need.
  • Property owners may find it challenging to get signatures from some tenants. Communicate with tenants to ensure they understand their obligation to complete one and how it benefits them. 
  • Let tenants know that they can request revisions for incorrect information and ensure any legitimate disputes are resolved quickly. The estoppel letter, however, isn’t a tool for re-negotiation of the lease.  
  • If buying a property governed by an association, buyers should consider obtaining both types of estoppel certificates.


Estoppel certificates help to protect the interests of everyone involved in the deal. They confirm financial obligations and prevent lawsuits, liens, and other disputes in the future. When completing or signing one of these estoppels, it’s vital to review it for accuracy and remember that it’s legally binding! 


If you’re a real estate investor or title agent who wants to learn more about association estoppels and how PropLogix can help you avoid HOA headaches, download our Ultimate Guide to Association Estoppels and HOA Resale Certificates. 
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This content is provided for informational purposes only. PropLogix, LLC (PLX) is not a law firm; this content is not intended as legal advice and may not be relied upon as such. PLX makes no representations as to the accuracy, reliability, or completeness of this content. PLX may reference or incorporate information from third-party sources, upon which a citation or a website URL shall be provided for such source. PLX does not endorse any third party or its products or services. Any comments referencing or responding to this content may be removed in the sole discretion of PLX.

Amanda Farrell Content Marketing Strategist

Amanda Farrell is a digital media strategist at PropLogix. She enjoys being a part of a team that gives peace of mind for consumers while making one of the biggest purchases of their lives. She lives in Sarasota with her bunny, Buster, and enjoys painting, playing guitar and mandolin, and yoga.