The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: CS/SB 1016
INTRODUCER: Banking and Insurance Committee, and Senator Burgess
SUBJECT: Mortgage Payoff Letters
DATE: February 21, 2022 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Schrader Knudson BI Fav/CS
2. Schrader Phelps RC Favorable
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 1016, makes significant revisions to Florida law regarding estoppel letters provided by
mortgagees and mortgage servicers under ch. 701, Florida Statutes (F.S.). Specifically, SB 1016:
 Reduces from 14 days to 10 days the timeframe during which a mortgagee or
mortgage servicer must respond to an estoppel letter request.
 Allows mortgagees and mortgage servicers to send corrected estoppel letters which
supersede previous letters, subject to specified conditions.
 Prohibits a mortgagee or mortgage servicer from qualifying, reserving the right to
change, or conditioning or disclaiming the reliance of others on a current, valid
estoppel letter.
 Prohibits a mortgagee or mortgage servicer from refusing to accept funds received
that conform with the amount provided in a current, valid estoppel letter; and requires
the mortgagee or mortgage servicer to apply such funds to the balance of the loan.
 Specifies that within 60 days after the mortgage loan has been paid pursuant to the
estoppel letter, the mortgagee or mortgage servicer must execute an instrument
acknowledging release of the mortgage; have the instrument acknowledged, or
proven, and send it or cause it to be sent for recording in the official records of the
proper county; and send or cause to be sent the recorded release to the mortgagor or
record title owner of the property. Also provides for attorney fees for prevailing
parties in civil actions relating to these requirements.
 Specifies that the release of a mortgage does not necessarily relieve the mortgagor, or
the mortgagor’s successors or assigns, from any personal liability on the loan or other
obligations previously secured by the mortgage.
BILL: CS/SB 1016 Page 2
 Provides the requirements for making and responding to an estoppel letter request.
 Standardizes the minimum contents of an estoppel letter.
 Revises the definition of an estoppel letter.
 Provides for retroactive application to existing mortgage contracts.
The effective date of the bill is October 1, 2022.
II. Present Situation:
Estoppel Letters
In general, an estoppel letter (or estoppel certificate) is a legal document that stops someone from
claiming different facts or terms regarding an agreement.1 In regards to real estate, these types of
letters are typically used to confirm amounts of moneys owed that attach to a certain piece of
property, such as mortgage debt, condominium association fees, home owners association fees,
and outstanding claims or deposits due to tenants. These types of letters are often sought prior to
closing on a real estate transaction as part of due diligence to confirm proper amounts due that
can affect the settlement of said transaction.
In Florida, s. 701.04, F.S., provides the requirements for estoppel letters in regards to real estate
mortgages (these letters are also commonly known as mortgage payoff letters).2 Section
701.04(1), F.S., requires that a mortgage lender (also known as the mortgagee) or mortgage
servicer deliver to the requestor, within 14 days after receipt of a written request, a mortgage
payoff letter setting forth the unpaid balance of the loan secured by the mortgage. The request
may be made by a mortgagor (the borrower under the mortgage), a record title owner of the
property, a fiduciary or trustee lawfully acting on behalf of a record title owner, or any other
person lawfully authorized to act on behalf of a mortgagor or record title owner of the property.
Section 701.04(2), F.S., requires that, upon the payment of the money due on a mortgage, the
mortgage lender or servicer must execute in writing an instrument acknowledging satisfaction of
the mortgage and have the instrument acknowledged, or proven, and duly entered in the official
records of the proper county.3 Within 60 days after the date of receipt of the full payment of the
mortgage the person required to acknowledge satisfaction of the mortgage must send or cause to
be sent the recorded satisfaction to the person who has made the full payment. In the case of a
civil action arising out of these requirements, the prevailing party is entitled to attorney fees and
costs.
It is notable, that s. 701.04(2), F.S., requires the full payment of the mortgage, not the amount
that was specified in the estoppel letter provided pursuant to 701.04(1), F.S. This is in contrast
with homeowners’ association estoppel certificates in Florida where s. 701.04(s), F.S.,
specifically states that a homeowners’ association “waives the right to collect any moneys owed
1
Estoppel Letter, CREPedia, https://www.crepedia.com/dictionary/definitions/estoppel-letter/ (last visited Feb. 4, 2022); and
What is an Estoppel Certificate, Redfin https://www.redfin.com/definition/estoppel-certificate (last visited Feb. 4, 2022).
2
Section 701.041, F.S., defines an estoppel letter in regards to mortgages as a statement of the amount of the unpaid balance
of a loan secured by a mortgage, including principal, interest, and any other charges properly due under or secured by the
mortgage; and the interest on a per-day basis for the unpaid balance.
3
Section 701.04(2), F.S., also applies to liens and judgments attached to a property.
BILL: CS/SB 1016 Page 3
in excess of the amounts specified in the estoppel certificate from any person who in good faith
relies upon the estoppel certificate and from the person’s successors and assigns.” Sections
718.116(8)(c), and 719.108(6)(c), F.S., provide similar language regarding estoppel certificates
for any unpaid condominium association assessments and unpaid rents, and assessments due to
cooperatives (i.e. co-ops), respectively.4 A mortgagee is not necessarily held to the same waiver
of rights to collect additional moneys from a mortgagor upon the provision of an estoppel letter
as s. 701.04, F.S., does not provide a similar waiver provision as seen for homeowners’
associations, condominium associations, and cooperatives.5
Qualifying Language in Estoppel Letters
Some mortgage servicers and lenders, when sending the estoppel letter required under 701.04(2),
F.S., include language which seeks to reserve that servicer’s or lender’s right to change the
amounts listed in the payoff letter or disclaiming the reliance of others on the information in the
payoff letter. Examples of such language include:
 “The payoff figures provided are subject to final verification by the Note Holder. The
noteholder reserves the right to adjust these figures and refuse or accept any funds
which are insufficient to satisfy the full indebtedness for any reason.”
 “The payoff amount is subject to our final verification once we receive payoff funds.
… If the payoff funds received are insufficient to pay off the account in full for any
reason including, but not limited to, error in calculation, NSF, or additional escrow
disbursements and/or adjustments. [We] reserve the right to decline to pay the
account in full. In addition, any and all interest will be due at the time of payoff.”
 “All payoff figures are subject to final verification of the mortgage lender. We may
adjust any portion of this payoff statement, at any time, for the following reasons,
including but not limited to: escrow disbursements made on behalf of the loan
holder(s), fee advances, items returned by your financial institution including
previously made payments, additional fees or charges, and any good faith and/or
inadvertent clerical errors.”
 “We will not be bound by errors and/or omissions contained herein.”
 “Agent hereby reserves the right to adjust Payoff Amount or the Per Diem Amount in
the event that we discover a mathematical, typographical, bookkeeping or clerical
error.”
 “Borrower forever releases and discharges Agent, the Lenders, and their respective
officers, directors, employees, agents, representatives, successors and assigns…from
any and all claims, causes of action, damages and liabilities of any nature whatsoever,
known or unknown, which such person ever had, now has or might hereafter have
4
Section 701.116(8)(c) states that a condominium association “waives the right to collect any moneys owed in excess of the
amounts specified in the estoppel certificate from any person who in good faith relies upon the estoppel certificate and from
the person's successors and assigns.” 719.108(6)(c), F.S. states that a cooperative association “waives the right to collect any
moneys owed in excess of the amounts specified in the estoppel certificate from any person who in good faith relies upon the
estoppel certificate and from the person's successors and assigns.”
5
But see, Rissman on Behalf of Rissman Inv. Co. v. Kilbourne, 643 So. 2d 1136, 1139 (Fla. 1st DCA 1994), where the 1 st
District Court of Appeal found that a lender could be estopped from claiming additional moneys after an estoppel letter. The
facts of this case, however, were rather unique. As the court mentioned, the mortgagee regularly reaffirmed the amount given
in the estoppel letter over a number of years. In addition, the mortgagor made a number of transactions based in detrimental
reliance on the amount provided by the mortgagee.
BILL: CS/SB 1016 Page 4
against [the parties] which relates, directly or indirectly, to any of the Loan
Documents or the Loan.”6
Such language can frustrate the parties involved in a real estate transaction since, arguably, the
amounts provided in estoppel letters with such language cannot be definitively relied upon. In
the event that the mortgage lender or servicer determines after sending an estoppel letter that the
borrower owes additional money beyond that provided in the estoppel letter, some mortgage
lenders or servicers return all of the funds received from the closing and demand full payment—
even if such funds were sent in reliance on an estoppel letter that was never corrected or revised
by the lender or servicer. This can result in the continued accrual of interest on the full amount of
the mortgage (not just the amount in dispute) during the pendency of resolving the discrepancy
in the amount owed. Further, prior to resolution of the discrepancy, there may not be clear title to
the property.7
Retroactive Application and the Contracts Clause
Under Florida law, statutes are presumed to operate prospectively, not retroactively. In other
words, statutes generally apply only to actions that occur on or after the effective date of the
legislation, not before the legislation becomes effective. The Florida Supreme Court has noted
that, under the rules of statutory construction, if statutes are to operate retroactively, the
Legislature must clearly express that intent for the statute to be valid.8 When statutes that are
expressly retroactive have been litigated and appealed, the courts have been asked to determine
whether the statute applies to cases that were pending at the time the statute went into effect. The
conclusion often turns on whether the statute is procedural or substantive.
In a recent Florida Supreme Court case, the Court acknowledged that “[t]he distinction between
substantive and procedural law is neither simple nor certain.”9 The Court further acknowledged
that their previous pronouncements regarding the retroactivity of procedural laws have been less
than precise and have been unclear.10
Courts, however, have invalidated the retroactive application of a statute if the statute impairs
vested rights, creates new obligations, or imposes new penalties.11 Still, in other cases, the courts
have permitted statutes to be applied retroactively if they do not create new, or take away, vested
rights, but only operate to further a remedy or confirm rights that already exist.12
Florida’s contracts clause states that “no bill of attainder, ex post facto law or law impairing the
obligation of contracts shall be passed.”13 Regarding the impairment of an existing contract by
the retroactive application of a statute, the Supreme Court, in Pomponio v. Claridge of Pompano
Condo., Inc., 378 So. 2d 774, 780 (Fla. 1979) stated that it is a “well-accepted principle that
6
See Email from Melissa Murphy, Executive Vice President, Chief Legal Officer & General Counsel, The Fund (Feb. 4,
2022, 11:46 EST) (on file with the Senate Banking and Insurance Committee), which provided samples of escrow letters that
were sent to Florida borrowers.
7
Id.
8
Walker & LaBerge, Inc., v. Halligan, 344 So. 2d 239 (Fla. 1977).
9
Love v. State, 286 So. 3d 177, 183 (Fla. 2019) quoting Caple v. Tuttle’s Design-Build, Inc., 753 So. 2d 49, 53 (Fla. 2000).
10
Love, supra note Error! Bookmark not defined. at 184.
11
R.A.M. of South Florida, Inc. v. WCI Communities, Inc., 869 So. 2d 1210 (Fla 2004).
12
Ziccardi v. Strother, 570 So. 2d 1319 (Fla. 1990).
13
Art. I, s. 10, Fla. Const.
BILL: CS/SB 1016 Page 5
virtually no degree of contract impairment is tolerable.” However, the Pomponio court did state
that such a principle does allow for some impairment. In determining the degree to which such
impairment is tolerable, the court weighed “the degree to which a party's contract rights are
statutorily impaired against both the source of authority under which the state purports to alter
the contractual relationship and the evil which it seeks to remedy.” Essentially, the court
established a balancing test asking “whether the nature and extent of the impairment is
constitutionally tolerable in light of the importance of the state's objective, or whether it
unreasonably intrudes into the parties' bargain to a degree greater than is necessary to achieve
that objective.”
III. Effect of Proposed Changes:
Section 1 of the bill substantially amends s. 701.04, F.S., in regards to estoppel letters and the
satisfaction of mortgages. Specifically, the bill:
 Reduces from 14 days to 10 days the amount of time a mortgagee or mortgage
servicer has to send, or cause to be sent, a requested estoppel letter setting forth the
unpaid balance of the mortgage loan;14
 Requires that if the estoppel letter request is sent by a person other than the
mortgagor, the request must include a copy of the instrument showing such person’s
title in the property or other lawful authorization, and the mortgagee or mortgage
servicer must notify the mortgagor of the request ; and
 Specifies that the mortgagee or mortgage servicer must send the estoppel letter by
first-class mail; by common carrier delivery service; or by e-mail, facsimile, or other
electronic means, as directed in the written request, or through an automated system
provided by the mortgagee or mortgage servicer for this purpose. However, the
mortgagee or mortgage servicer is not required to pay for a common carrier delivery
service.
For an estoppel request to be valid under the bill, a written request from an estoppel letter must
be sent to the mortgagee or mortgage servicer, servicer by first-class mail, postage prepaid; by
common carrier delivery service; or by e-mail, facsimile, or other electronic means at the address
made available by the mortgagee or mortgage servicer for such purpose or through an automated
system provided by the mortgagee or mortgage servicer for req