Florida Estoppel Letter Requirements & Deadline

In response to subsequent owners of property having experienced difficulty in obtaining payoffs from lenders when a property has changed hands but is still subject to the mortgage, the Florida legislature enacted Senate Bill 1050 (the "Act") which amends § 701.04 of the Florida Statutes relating to estoppel letters. An estoppel letter sets forth the unpaid balance of a loan secured by the property.

Effective January 1, 2013, this amendment to law requires a lender to provide an estoppel payoff to a record title holder of the property or any fiduciary, trustee or other person lawfully authorized to act on behalf of a mortgagor or record title holder, within 14 days after receipt of a written request. The party requesting the estoppel must provide a copy of the instrument by which they took title or documentation of their authorization. The mortgage holder is then required to provide an estoppel letter showing, at a minimum, the total unpaid balance due under or secured by the mortgage on a per-day basis. If the mortgagor or any person authorized to act on behalf of the mortgagor makes the request, the estoppel must include an itemization of the principal, interest and any other charges properly due under or secured by the mortgage and interest on a per-day basis for the unpaid balance.

This statute does not mandate the form of documentation of authority. The Real Estate Default Group of Weltman, Weinberg & Reis Co., LPA (Weltman) determined the best practice to comply with this portion of the amendment to Florida Statute 701.04 is to accept the following forms of authority to prove ownership or authorization: certificate of title, tax deed, warranty deed, quit claim deed, trustee's deed, or special warranty deed or other instrument showing proof of title or authorization. Authorization would include documents from the mortgagor's attorney, title company or other advocate, given written authorization is provided. The documents can be fax, e-mailed or mailed via the U.S. postal service or other courier service. Each request will require reconfirmation of authority or ownership. In cases where a junior lienholder obtained title, the junior lienholder will be required to provide proof of ownership as described above. 

Weltman would like to stress that the timeliness of this response is heavily dependent upon the servicers response to request for updated payoff figures. While the amendment states that it is acceptable to include the past due escrow amount in a lump sum total, our recommendation is to provide an escrow breakdown to avoid multiple requests and inquiries from the requestor.

Pursuant to Florida Statute 701.04, this estoppel letter MUST be sent within 14 days of the request or there is a risk of sanctions, including monetary penalties.  The 14-day period starts the day after the date of the letter - this is considered the first day in the 14-day period, which includes holidays and weekends.

The law further provides that, "The mortgagee or servicer of the mortgagee acting in accordance with a request in substantial compliance with this paragraph is expressly discharged from any obligation or liability to any person on account of the release of the requested information, other than the obligation to comply with the terms of the estoppel letter."