GregHarris

gregharris@watsontitle.net

(904)4613220
http://www.watsontitle.net

WatsonTitleServicesofNFL,Inc.|11226SanJoseBlvd.,Suite2|Jacksonville,FL32223

Rule Change on PrePaid Estoppel Fees

The Florida Department of Financial Services
DFS has determined that prepayment for
estoppel fees for homeowner and condominium
associations is a violation of s. 626.9541, F. S.
because it is an unlawful inducement to the
placement of title insurance.
This is so new that word is only getting out the day before the
recent Unlawful Inducement Rule 69B186.010, F.A.C. becomes
effective February 9, 2016. This applies to both Title Companies and
attorneys, for both commercial and residential properties.
In order to facilitate a smooth progress to the closing table, it has
become industry practice in many cases for settlement service
providers to pay up front any estoppel fee and to be compensated
later by the responsible party. With this interpretation of the rule, for
now, this is no longer allowed.
As such, we will be working closely with Realtors to ensure that the
person responsible per the Contract makes a prompt payment for
estoppel letters so that no delays in closing take place waiting for
HOA to produce one. Especially with the TRID requirements, we will
all have to pay close attention to this already challenging part of the
timeline.
If you would like to see either the full rule or the letter concerning
estoppel letters from DFS, they can both be found on the Watson
Title Services of N FLs facebook page, or just email me for a copy.