Associations and association managers routinely receive what are referred to as lender questionnaires on a regular basis. What is a lender questionnaire?
A lender questionnaire is usually a request from a bank, lending institution or title company that requests the Association provide information about the community to the lender. Such requested information generally includes request for information concerning the community make up, collection procedures, community delinquency information, recreation areas, etc. More recently, requests from Fannie Mae and Freddie Mac have requested the Association provide information regarding the structural integrity of the building, reserve analysis reports, pending code violations, etc. What is the Association’s legal responsibility to answer such questions?
Associations are not required by law to provide a prospective purchaser or lienholder with information about the association other than information or documents required by the statute that governs such association, such as 718, 719 or 720, Florida Statutes This generally means the Association is only required by law to provide estoppel information as required by the pertinent statute.
There are slight differences in the statutes in regard to Sections 718, 719 and 720, Florida Statutes.
Section 718.111(12)(e)(1), F.S.:
1. The association or its authorized agent shall not be required to provide a prospective purchaser or lienholder with information about the cooperative or association other than the information or documents required by this chapter to be made available or disclosed. The association or its authorized agent may charge a reasonable fee to the prospective purchaser, lienholder, or the current unit owner for providing good faith responses to requests for information by or on behalf of a prospective purchaser or lienholder, other than that required by law, if the fee does not exceed $150 plus the reasonable cost of photocopying and any attorney’s fees incurred by the association in connection with the response.
2. An association and its authorized agent are not liable for providing such information in good faith pursuant to a written request if the person providing the information includes a written statement in substantially the following form: “The responses herein are made in good faith and to the best of my ability as to their accuracy.”
Note the quoted language in the last sentence, which limits the liability for any response as long as the quoted language is included in such response.
Section 719.104(2)(d), F.S.:
The association or its authorized agent shall not be required to provide a prospective purchaser or lienholder with information about the cooperative or association other than the information or documents required by this chapter to be made available or disclosed. The association or its authorized agent shall be entitled to charge a reasonable fee to the prospective purchaser, lienholder, or the current unit owner for its time in providing good faith responses to requests for information by or on behalf of a prospective purchaser or lienholder, other than that required by law, provided that such fee shall not exceed $150 plus the reasonable cost of photocopying and any attorney’s fees incurred by the association in connection with the association’s response.
Unlike the Condominium Act, the Cooperative Act section does not contain any language limiting the liability of the responder. But of course, there is no harm in including such language in any response.
Section 720.303(5)(d), F.S.:
The association or its authorized agent is not required to provide a prospective purchaser or lienholder with information about the residential subdivision or the association other than information or documents required by this chapter to be made available or disclosed. The association or its authorized agent may charge a reasonable fee to the prospective purchaser or lienholder or the current parcel owner or member for providing good faith responses to requests for information by or on behalf of a prospective purchaser or lienholder, other than that required by law, if the fee does not exceed $150 plus the reasonable cost of photocopying and any attorney fees incurred by the association in connection with the response.
Also, unlike the Condominium Act, the Homeowners Association Act section does not contain any language limiting the liability of the responder. As noted above, of course there is no harm in including such language in any response.
Associations may provide additional information as requested by lender questionnaires. Associations may charge up to $150.00 to provide such information, as well as any reasonable attorney’s fees and costs incurred in connection with such a response. In the past, associations would routinely provide this additional information, which sometimes included information on association amenities, a percentage of how many accounts were delinquent, etc. As mentioned above, Fannie Mae and Fannie Mac have now added questions requesting the Association to provide information regarding the structural integrity of the building, reserve analysis reports, pending code violations, etc.
Generally, board members, managers and even the association attorney are not in a position to provide answers to these questions, and the Association is not required to provide answers to such questions. It has been my experience that most loans will close even if the specific questions are not responded to.
If the association does respond to these structural questions, it should be the association engineer that provides such responses. Some of the questions cannot be answered – questions that ask if there will be any violations in the future, for example.
If your association decides to respond to the lender questionnaire, before it just routinely responds to these lender questionnaires, take a close look at the questions; include the limited liability language mentioned above; and engage the association’s engineer to answer the appropriate questions.
Howard J. Perl, Esq.
Shareholder, Becker
Fort Lauderdale | bio
