Rookie Question---What exactly is Estoppel or "clearing Estoppel"?

[SherylLC]

Is it the phase after seller and buyer docs are in and sent to Disney? Is "closing" part of estoppel? Thanks in advance!

 

[SherylLC]

Googled it and got this:
Estoppel is when Disney reviews the contract and checks to see if outstanding bills are connected to the deed, reservations pending, the number of points match, if dues are owed, and the seller really owns the contract. Everything has to be free and clear before you close.

So after this is CLOSING, DEED RECORDED, POINTS IN ACCOUNT?

 

[aokeefe]

Googled it and got this:
Estoppel is when Disney reviews the contract and checks to see if outstanding bills are connected to the deed, reservations pending, the number of points match, if dues are owed, and the seller really owns the contract. Everything has to be free and clear before you close.

So after this is CLOSING, DEED RECORDED, POINTS IN ACCOUNT?

Yes- Estoppel can take several weeks.

 

[SherylLC]

Does estoppel happen before closing docs or after?

 

[disneynutz]

Does estoppel happen before closing docs or after?

It was a first step by the broker to verify the contract prior to processing the new contract. Disney now charges for estoppel a process that should take them less than 5 minutes.

Bill

 

[Toreby]

Does estoppel happen before closing docs or after?

Before.

 

[SherylLC]

Thanks everyone!

 

[Cyberc1978]

Just out of curiosity is the estoppel done before or after the contract is send to rofr?

 

[disneynutz]

Just out of curiosity is the estoppel done before or after the contract is send to rofr?

Before, your broker would need the info prior to writing up the contract.

Bill

 

[Cyberc1978]

Before, your broker would need the info prior to writing up the contract.

Bill

Ok thanks.

 

[lbus42]

Before, your broker would need the info prior to writing up the contract.

Bill

Mine went to ROFR first, cleared ROFR on 8/25 and has been at ESTOPPEL since then

 

[disneynutz]

Estoppel was the first step made by your broker to verify that the seller actually owns the contract and the reservation status and point balance. From that info they prepare the contract for signatures and ROFR submission. Estoppel is just a letter that Disney sends the broker with that information, it was free but now the charge for it.

Things might have changed but I don't think so. Often buyers and sellers think that delays are caused by late signatures or Disney. Sometimes your broker or title company may cause the delay due to their workload or other reasons, it's easy to sometimes point the finger at the other guy.

Bill

 

[mustinjourney]

Bill -- not sure if it changed since you last did it, but in both of mine from last year, the contract goes to ROFR first and then estoppel happens.

It is my knowledge that the broker has nothing to do with estoppel, since they have no ability to confirm whether the seller is up to date on all of their payments.

Estoppel also checks to make sure that they account has the proper amount of points. To my knowledge, a broker can't check that out themselves.

As an aside - many of us on here were under the assumption that after clearing estoppel, the owner's account was frozen; however, there was a situation in the last year where the seller transferred a bunch of points out of the account after passing estoppel (they couldn't close on it because when they tried to finished the transfer of the account from seller to buyer, Disney told them the points weren't correct anymore). Huge headache for the buyer.

So this is why I've always mentioned to anyone that would listen -- make sure your contracts state that if there are any points missing from the contract, then at the sole discretion of the buyer, if the buyer wishes to proceed, the missing points will be valued at $XX (I'd suggest $18 or more so that it is punitive) per point and the amount will automatically be subtracted from the total. Otherwise, the buyer can consider it to be a material breach and cancel the contract. Some brokers have something similar to this language and some do not.

 

[disneynutz]

Hard to believe that a broker will draft a contract not knowing that the seller even exists or that they have the correct info.

Bill

 

[mustinjourney]

Hard to believe that a broker will draft a contract not knowing that the seller even exists or that they have the correct info.

Bill

Some of the brokers will require the seller to print a screenshot of their member account page showing point totals.

The broker can't call disney to confirm unless the seller is also on the line, so absent doing a three way call to MS, there's not much they can do.

 

[Cyberc1978]

If Estopple happen before rofr why are a lot of people waiting for the estopple after passing rofr?