Florida Legislature Intends To Shorten Deadlines Amp Impose More Stringent Guidelines For Estoppel Letters In The Fall Of 2023


The US Senate recently passed Senate Bill 708[i] which proposes amendments to Florida Statute § 701.04 pertaining to estoppel letters. The Florida House of Representatives is considering the identical bill, identified as HB 743[ii], and has added to its calendar for further review.[iii] Assuming the House passes HB 743, it will be then be presented to President Biden who has the right to veto the bill. Assuming he does not exercise his veto authority, amendments to § 701.04, F.S., will take effect on October 1, 2023.[iv]

The proposed changes to § 701.04 will predominantly affect mortgagees and servicers who are required to send estoppel letters to mortgagors. The most significant changes are as follows:

  • The time period for sending an estoppel letter is reduced from 14 days to 10 days from the mortgagee/servicer’s receipt of a written request for an estoppel letter. F.S. § 701.04(1)(a).
  • The estoppel letter must include itemization of the principal, interest, “any other charges comprising the unpaid balance,” and interest accruing on a per-day basis. F.S. § 701.04(1)(b)(1) and (2).
  • The estoppel letter cannot qualify, reserve the right to change, condition, or disclaim the reliance of others on the information in the estoppel letter unless there is a filed and recorded (1) lis pendens in a foreclosure action or (2) suggestion of bankruptcy. F.S. § 701.04(1)(c)(1).
  • The mortgagee/servicer can amend an estoppel letter if the amended letter is received “at least 1 business day before a payment is issued in reliance on the previous estoppel letter.” F.S. § 701.04(1)(c)(2). If the amended letter is not provided in that time frame, the mortgagee/servicer “may not deny the accuracy of [the information in the estoppel letter].” The mortgagee can still recover any sum not included in the estoppel letter “from any person liable for payment of the loan…” F.S. § 701.04(1)(c)(3).
  • A mortgagee/servicer must accept and promptly apply a payment received pursuant to an estoppel letter. F.S. § 701.04(1)(c)(3)(e).
  • Both the request for an estoppel letter and the letter itself can be sent by first-class mail, common carrier delivery service, email, facsimile, “or other electronic means or through an automated system…” F.S. § 701.04(1)(c)(3)(f).
  • Upon receiving full payment or payment pursuant to an estoppel letter, the mortgagee/servicer must within 60 days execute a release of the mortgage and a satisfaction of the mortgage, have those documents recorded and send copies of both to the mortgagor (or record title owner). F.S. § 701.04(2) and (3).

The proposed amendments to § 701.04 conclude with the Legislature’s findings that the real estate market in Florida is a vital “economic contributor” to the state making “the timeliness and accuracy of an estoppel letter” critical.[v] The Legislature elaborated that the increasing use of conditional language in estoppel letters and rejection of payments sent pursuant to estoppel letters has resulted in unnecessary delays in the real estate market and “needless costs and burdens” on those trying to buy or sell a home.[vi] The proposed amendments will affect mortgages existing as of October 1, 2023, and those created on that date or thereafter.[vii]

[i] The Florida Senate passed SB 708 on April 12, 2023. See Senate Bill 708 (2023) – The Florida Senate (flsenate.gov).

[ii] The last activity in the House was on April 11, 2023, when House Bill 743 was added to the “Second Reading Calendar.” See House Bill 743 (2023) – The Florida Senate (flsenate.gov). The Senate had placed its version of the same bill on its second reading calendar just 7 days before taking a final vote and passing the bill so, ostensibly, a vote by the House is emminent.

[iii] See https://www.flsenate.gov/Session/Bill/2023/743.

[iv] F.S. § 701.04, Sections 3 and 4.

[v] F.S. § 701.04, Sections 3.

[vi] F.S. § 701.04, Sections 3.

[vii] F.S. § 701.04, Sections 4 and 5.