An estoppel certificate is a binding document drawn up by a condominium corporation that states the financial standing of a given condo unit as well as that of the condominium corporation itself. It should detail if there are any assessments to be paid toward repairs of the common elements of the building, and if the unit you are considering owes anything against them. The document should also have the balance of the reserve fund and if there are any planned expenditures in the foreseeable future. The percentage of the common elements the unit owns and thereby how much the condo fees will be per month are also found in the estoppel certificate. The document will also have the contact information of the condo management company if there is one, and the names of the condo board members.
The estoppel certificate is issued along with the most current copies of the condominium declaration and the by-laws. These should all be provided to the buyer ten days in advance of closing and the buyer then has an opportunity to bring up any problems with the finances at this time, and even the ability to terminate the deal if the financial standing is unacceptable to them. Termination of the deal is fairly uncommon as typically the buyer will have seen a recent version of the condo boards meeting minutes and any large expenditures are usually discussed in the meetings.
The binding disclosure of the estoppel certificate offers an additional level of security to a condo buyer, allowing them peace of mind in the transaction.