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What’s an HOA Resale Certificate?

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Purchasing a property in a homeowners’ association (HOA) is exciting. Homebuyers look forward to living in a beautiful neighborhood with convenient amenities and a tight-knit community. In fact, about 84% of all newly built homes sold in the United States in 2022 were part of an HOA, showing just how attractive these associations have become.

However, the HOA buying process does involve reviewing important documents and forms before closing, including the HOA resale certificate. So, what is an HOA resale certificate, and what do you need to look for when reviewing it? Here’s everything you should know about HOA resale certificates.

What Is an HOA Resale Certificate?

It’s essential for homebuyers to understand their responsibilities to the HOA, the seller’s current status within the HOA, and how that could impact them. A resale certificate, also known as a closing statement or estoppel, is a document that provides transparency on the specific home being bought. The form, which is filled out by the community management company, community manager, or board of directors, may include the following details:

  • The amount and frequency of HOA dues and assessments
  • The current owner’s past-due payments and unpaid fees
  • The current owner’s unpaid or pending violations
  • Other HOA fees that are due at closing
  • If the HOA has current or pending litigation
  • The amount in the HOA’s reserve funds
  • The association’s planned expenditures for the upcoming year

Ideally, the seller will be up to date with payments and in good standing with the association. If the seller has unpaid dues or violations, the buyer can be held responsible for those financial obligations. That’s why being upfront about the seller’s status with the HOA is important.

Disclosing this information on the resale certificate also minimizes financial risk for the association. It clearly states what’s owed and who will be responsible for it, which ensures the HOA doesn’t bear the burden of unpaid dues or fees.

New to HOA living? Check out “A Handbook for New HOA Residents” to learn what the HOA lifestyle is all about.

How Do You Get a Resale Certificate?

If you’re wondering how to get a resale certificate, talk to your real estate agent to confirm the process. While your agent or escrow company typically orders the appropriate forms for closing, homeowners can also directly request an HOA resale certificate or other disclosure materials from the community's management company or HOA board.

Is an HOA Resale Certificate Required in My State?

Because an HOA resale certificate contains crucial information a homebuyer needs to know, they’re a legal requirement for homes purchased in an HOA community. However, there may be rare exceptions in some states.

Generally, HOAs must provide a resale certificate and other documents within five to 15 business days of a new owner’s request. Likewise, the homebuyer has a limited timeframe to review the resale certificate and make a final decision.

How Much is an HOA Resale Certificate?

There’s a fee to obtain a resale package, which includes the resale certificate. However, the amount will vary from state to state and community to community. Many states have a legal limit on how much an association can charge to prepare the resale certificate and other documents.

Check with state laws for restrictions on how much an association can charge for preparing and providing an HOA resale certificate to ensure your fees are within that limit.

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What’s an HOA Resale Package?

A resale certificate is usually just one part of a bigger resale package. A resale package includes several forms that provide transparency to the buyer and seller of an HOA home, reporting the association’s financial and legal positions, the seller’s standing, and what the buyer can expect when living in the community.

While every community’s requirements may be different, all HOA resale packages must contain the resale certificate and the association’s governing documents, including:

  • The community plan or plat
  • The covenants, conditions, and restrictions (CC&Rs)
  • Bylaws
  • Rules and regulations
  • Articles of incorporation

Read “A Breakdown of HOA Governing Documents” to learn more about what they are and why they matter.  

The buyer’s real estate agent or title company usually orders the resale package before closing so the buyer has a chance to review the forms and make the most informed decision about their purchase. After receiving the HOA resale package, buyers should look at the resale certificate to:

  • See if the seller has outstanding HOA violations
  • Confirm that the seller doesn’t owe money to the association
  • Ensure the HOA is in good financial and legal status
  • Understand HOA dues, including the amount and how often they must pay

When a buyer is satisfied with the details in the resale package and agrees to the frequency and amount of HOA assessments, they can move forward to the next step in the closing process. If they find unresolved issues they must address, it can delay closing and change the deal's outcome altogether.

The Top 10 Frequently Asked Questions About Resale Packages

Although the documents involved in the homebuying and selling process can often feel overwhelming, reviewing and understanding the resale certificate and other forms will help you avoid issues later. HOA resale packages contain vital details about the community, the home you’re purchasing, and your financial obligations to the association, so they should be a priority before closing.

Check out our ebook, “Top 10 FAQs About HOA Resale Packages,” for industry insight on the HOA resale process!