Avoid Closing Delays: Estoppel Fee Insights for Title and Escrow

Imagine you’re deep in the pre-closing phase, working diligently to ensure a clear title and a seamless transition for your clients. You’ve meticulously reviewed documents, verified liens, and double-checked every fee—confident that the closing is right on track. But then, an unexpected complication arises— the estoppel fee.

This seemingly small fee, often misunderstood or neglected, can halt the closing process, leading to delays, frustrations, and potentially costly setbacks. 

So, let’s look at the estoppel fee—what is it,  when it’s due, and why it matters for title and escrow professionals.  

What Is an Estoppel Fee? And How It Affects Your Real Estate Transactions 

An estoppel fee is what stands between a smooth closing and unexpected complications. Charged by homeowners’ or condominium associations (HOA or condo association ) the estoppel certificate fee covers the document that lays out any unpaid dues, fees, or violations linked to a property, including any delinquent amounts, attorney fees for collection matters, for example.

The estoppel certificate (a.k.a HOA demand) is proof buyers and lenders need to feel confident that the property isn’t hiding financial surprises. As a title professional, you need the demand to ensure no surprises come your client’s way. That’s why title and escrow professionals must prioritize coordinating this fee, keeping the closing process on track and free of last-minute hiccups.

HOA Estoppel Fees Importance in Real Estate Transactions

The HOA estoppel fee isn’t just another cost in a transaction—it’s the price for obtaining the vital estoppel certificate that outlines any unpaid fees, dues, or violations linked to a property. 

Without settling the estoppel fee, title and escrow professionals can’t get the certificate, and without the certificate, they run the risk of unexpected financial issues surfacing late in the closing process.

Paying the estoppel fee promptly ensures you have the necessary information to guarantee the property is clear of hidden debts, providing peace of mind to buyers and lenders alike.

Who Pays the HOA Estoppel Fee?

Responsibility for paying the HOA estoppel fee often comes down to the specifics of the purchase agreement. Typically, it is the seller who pays this fee as part of their duty to deliver a clear title to the buyer. After all, the estoppel certificate serves to confirm that the seller has no outstanding debts or obligations to the HOA that could be transferred to the new owner.

But, in some cases, the buyer might agree to cover the fee as a negotiation point, especially in competitive markets where flexibility can make or break a deal.

Regardless of who ends up paying, the real focus should be on ensuring this fee is taken care of early on. The longer it lingers, the more likely it is to cause issues that can throw the whole process off course. It should be every title and escrow professional’s priority to know exactly who is responsible for the estoppel fee, make sure it’s paid promptly, and protect the deal from unexpected delays.

Being clear on the dynamics of the estoppel fee payment isn’t just about following procedure; it’s about showing your clients that you’re always a step ahead, smoothing out potential bumps before they become real obstacles. Taking care of such details helps you build a better customer journey that sets the stage for more client referrals. 

The HOA Estoppel Fee Breakdown

Let’s break down how much does an estoppel letter cost, and what your clients are really paying for when it comes to the estoppel fee. 

The estoppel fee isn’t just a random charge on the settlement sheet—it’s a direct cost for the HOA or condo association to prepare the estoppel certificate. It usually takes considerable time and resources to produce, as it involves a detailed check of the property’s records. 

Typically, the HOA estoppel fee covers administrative tasks like reviewing account histories, verifying any outstanding balances, and ensuring the estoppel certificate (also known as a letter) is accurate and legally binding.

What often goes unnoticed is how the amount of the estoppel certificate fee can vary widely based on the HOA’s internal policies, the complexity of the property’s financial history, and the urgency of the request. 

The standard cost might range from $100 to several hundred dollars, and in high-demand scenarios, a rush fee might push it even higher. This variability means that being prepared for different fee structures is a must for any title and escrow professional looking to avoid unexpected delays and costs.

Estoppel Rush Fees

Rush fees come into play when time is tight and the estoppel certificate is needed quickly to keep the transaction on schedule. If a closing date is fast approaching or unexpected delays have already occurred, title and escrow professionals might request the HOA to expedite the preparation of the certificate.

This urgency often means extra work for the HOA, prompting an additional rush fee on top of the standard estoppel fee. Rush fees can vary, typically ranging from $50 in Florida to $118 in California or even more, depending on the state, how quickly the certificate is needed, and the HOA’s policies.

For title and escrow professionals, knowing which HOAs provide rush services and their specific requirements can save time and prevent costly delays. 

HOA Estoppel Fee Regulations

The HOA estoppel fees are governed by specific regulations that can vary significantly from state to state. In Florida, for example, the maximum fee for preparing a standard estoppel certificate is capped at $299, with an additional charge of up to $179 for properties with delinquent accounts. If an expedited request is needed, a rush fee of $119 may apply. 

These caps help prevent excessive charges, but not all states have similar limits. Out of the 25 states that require pre-sale estoppel disclosures, fewer than five have any fee cap in place. 

Based on data collected by Rexera’s Operations team while obtaining HOA documents for clients—including estoppel certificates—the average cost for the entire package of closing documents nationwide is approximately $209.65 without rush fees and $255.66 when rush fees are applied. These averages, however, do not account for additional charges that may be imposed by secondary or third-party HOAs, which can vary widely depending on local regulations and association policies.

Check the full breakdown of HOA fees here.

HOA Estoppel Fee and Estoppel Issue Time 

HOA policies influence not only how much you pay (and if rush fees apply) but also how long it takes to obtain an estoppel certificate. While some HOAs have standard processing times (often 10 to 15 days), they may charge additional rush fees, particularly when documents are needed quickly to meet a closing date. 

We found that the national average for issuing HOA documents is 12.62 days. You can check out the table with the full list of states and their required HOA estoppel in our Ultimate Guide to HOA Estoppels for Title and Escrow.

Not to brag, but Rexera gets the documents 65% faster. You can check the table of how long it took our team to gather the HOA documents on average for the past one year in the table below.

Conclusion

Estoppel fees may seem minor in the closing process, but their impact is anything but. A small fee with big consequences can determine whether your transaction proceeds smoothly or hits a costly delay. Knowing what these fees cover, who pays them, and how they vary by state ensures you’re not caught off guard by unexpected expenses or complications. For title and escrow professionals, it’s about more than just compliance—it’s about demonstrating expertise, foresight, and a commitment to smooth, efficient closings.

Staying ahead of the curve is essential with varying state regulations, rush fees, and unpredictable HOA policies. We encourage you to proactively manage the estoppel fees, and position yourself as a trusted partner who knows how to navigate everything HOA-related.

If time or resources are tight, let Rexera step in to handle the details—streamlining the process, managing fees, and ensuring no stone is left unturned. With the right approach, you can turn what feels like a hurdle into an opportunity to shine.