Should Buyer Get HOA Credit After Villa Purchase?
RE Q&A: An estoppel found a small credit to the seller that the buyer reimbursed at closing; therefore, the HOA should honor the credit balance on the unit’s account.
FORT LAUDERDALE, Fla. – Question: I recently purchased a villa and was required to get an estoppel from the property manager so I would know if the seller is current on their HOA fees or any other assessments. The estoppel report showed the seller had a small credit balance. I reimbursed the seller that amount at closing, but now the property manager refuses to return the credit balance to me. Now, they are ignoring me and refuse to discuss the issue. What should I do? – Burt Long
Answer: As part of the process of purchasing a property in a community association, one of the parties, typically the seller, will pay the association a fee to report the status of the regular and special assessments, along with other information about the unit being sold and the community as a whole. This report is called an “estoppel” and is binding on the community. While the property manager usually prepares the estoppel, it is done on behalf of the association.
Because the association account regards the unit more than the seller, the buyer will reimburse the seller for the credit balance at the closing table and will retain the credit balance on their association account.
While you paid the seller, the association does not return the money to you; instead, your unit’s account will have the credit on it.
It is like when you return something to a store, and instead of giving your cash back, they only give you a gift card.
You should ask for a copy of your ledger to ensure the balance is still showing, and only if it is showing, use up the credit by paying less on your following dues payment. However, if the credit is missing from your ledger, you will need to find out why.
Except in a few specific scenarios, community associations have to abide by estoppel reports they issue.
In your case, since the estoppel says there was a credit on your account, the association will need to honor it. Reach out to the property manager again and politely ask to see your ledger to determine what happened to your credit balance.
If the manager blows you off, take the issue up with the board of directors. Be polite, but firm, and you should get the necessary information.
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