What
is an Estoppel letter and how does it relate to timeshares?
Estoppel:
es·top·pel
A bar preventing one from making an allegation or a denial that contradicts what one has previously stated as the truth.
[Obsolete French estouppail, from Old French estouper, to stop up, from Vulgar Latin *stupp
re; see stop.]
Estops means to bar or prevent by estoppel…
A certificate or letter from the resort that outlines the exact status of the timeshare property. It explains any maintenance fees pending, as well as the rules or restrictions on how the timeshare may be used. The estoppel certificate will show different things depending on the Developer. Generally it will tell you the status of any unpaid mortgages due the Developer or the Finance Company used by the Developer. It will give you an up to date status of maintenance, taxes and special assessments. It will also tell you the status of the week or points for the current year and some future years. It can also tell you if they have points or weeks banked. This information is current the date the estoppel is written.
Even though this statement that is signed by a party certifying for another’s benefit that certain facts are correct as of the date of the statement it does not verify or stop events that happen between the time the estoppel is written and the closing takes place.
The delivery of the estoppel can be used to show the status of the property at the time of sale and can prevent the party from claiming a different statement of facts at a later date. The estoppel should be signed as part of the closing documents to prevent a problem at a later date.
Florida Governor Rick Scott signs the HB 7025 bill into law.
The new legislation requires estoppel letters for timeshare resale transfer transactions. The law will prohibit certain activities related to offering timeshare interest transfer services.
GENERAL BILL by Regulatory Affairs Committee ; Business and Professional Regulation Subcommittee ; Eagle
Timeshares; Specifies that certain provisions relating to condominium board elections do not apply to timeshare condominiums; revises formula requirements for calculating reserves for accommodations & facilities of real property timeshare plans; requires successor in interest to be listed as owner of timeshare interest under certain conditions; requires estoppel letter in certain timeshare resale transfer transactions; prohibits certain activities related to offering timeshare interest transfer services; requires resale transfer agreements to contain specified information; requires establishment of escrow account for certain purposes; provides requirements & duties of escrow agent; providing penalties; revises procedure for trustee foreclosure of assessment & mortgage liens; revises conditions under which trustee may sell foreclosed encumbered timeshare interest; revises & provides notice requirements; provides for perfection of notice; provides requirements for notice of lis pendens; provides exceptions for actions for failure to follow trustee foreclosure procedure.