Simone Lawson
A Homeowners Association (HOA) resale package is a set of documents provided to a buyer when a property is sold. It contains vital information about the HOA, including its financial health and obligations. The package typically includes a resale certificate, which details outstanding fees, special assessments, legal issues, and the seller's financial standing within the HOA. The buyer's receipt of this package is crucial as it offers protection and transparency, ensuring they are aware of any financial obligations they are taking on. While the process and specific contents may vary by state, the receipt of the resale package by the buyer is a key step in understanding the HOA community they are joining and making an informed decision about their purchase.
| Characteristics | Values |
|---|---|
| Who requests the package | The buyer, seller, or their agents |
| When is the package requested | After the purchase contract is signed |
| Who provides the package | The seller or their agent |
| Time taken to provide the package | 5-10 business days |
| Package contents | Resale certificate, governing documents, financial statements, and HOA rules |
| Purpose of the package | Protect the buyer and the seller, ensure transparency, and reduce liability |
| Package format | Digital or print |
| Who pays the fee | The buyer or the seller |
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What You'll Learn
Who can request the package
In the United States, a Homeowners Association (HOA) resale package is a set of documents provided to a buyer when a property is sold. It contains vital information about the property and the community that the buyer should be aware of. It is usually distributed from the buyer's real estate agent to the buyer and may come in a digital or print format, depending on the association.
The package is typically ordered by either the buyer or seller after the purchase contract is signed. In some cases, the buyer's real estate agent or title company will order the package 30 to 60 days pre-escrow. In Pennsylvania, the seller is required by law to provide the information to the buyer, so typically either the seller or their agent requests the package. In some cases, other parties involved in the transaction—such as the buyer, realtor, closing agent, lender, or attorney—can also request the package.
The resale package has two parts: the resale certificate and the governing documents. The resale certificate provides information about the property being purchased and the seller's standing in the association. It includes past-due payments, pending or unpaid violations, and any fees due upon closing. It also details the community association's current budget, planned expenditures for the upcoming year, and any pending litigation. The governing documents include the master deed, bylaws, articles of incorporation, and rules and regulations. These documents outline the procedural processes for buying and selling a home within an association, as well as the rules, expectations, and obligations that the buyer will be expected to fulfill and abide by upon closing.
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What the package contains
An HOA resale package is a set of documents that a homeowners association (HOA) provides to a buyer when a property is sold. It contains vital information for buyers purchasing a home in an association. The package has two parts: the resale certificate and the governing documents.
The resale certificate, also known as a closing statement, estoppel, dues statement, paid assessment letter, 3407, or 5407, provides information about the property being purchased and the seller's standing in the association. It includes past-due payments, pending and unpaid violations, and any fees due upon closing. It also details the community association's current budget and planned expenditures for the upcoming year, and discloses any pending litigation.
The governing documents include the master deed, bylaws, articles of incorporation, and rules and regulations. These outline the procedural processes for buying and selling a home within the association and provide transparency on the rules, expectations, and obligations that the buyer will be expected to fulfill and abide by.
The resale package may also contain other community documentation, such as insurance, reserve studies, financial statements, and any state-specific information, such as the type of voting used by the association.
The purpose of the resale package is to offer protection and transparency to all parties involved in the transaction. It ensures that buyers are aware of any financial obligations, such as outstanding fees or special assessments, and provides an opportunity to negotiate these at closing. It also allows the HOA to receive the money they are owed and reduces their financial risk.
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When the package is requested
When a buyer requests an HOA resale package, they are seeking vital information about the condominium or home they are purchasing within an association. This package is typically ordered by the buyer or their agent after the purchase contract is signed. It is important to note that the buyer has the ability to request this package even before making a formal offer on a specific home.
The resale package serves as a source of protection for both the buyer and the seller, ensuring transparency and full disclosure before finalising the deal. For the buyer, it provides an awareness of any outstanding fees or financial obligations that the seller may have, which could be negotiated during the closing process. It also includes the HOA's governing documents, such as bylaws, rules, and regulations, giving the buyer a comprehensive understanding of the community's expectations and restrictions.
The buyer's real estate agent usually distributes the resale package to the buyer. It can be provided in a digital or print format, depending on the association's preferences. In most cases, the HOA has a standard processing time of 5 to 10 business days to compile and deliver the package. However, it's important to note that the specific timeline and process may vary from state to state and even between associations.
While the buyer can request the resale package, it is the seller's responsibility to provide it. In some states, such as California and Pennsylvania, the seller is legally obligated to disclose this information, even without a formal request from the buyer. The seller typically receives assistance from the HOA's management company, which has access to the necessary financial information and documents.
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Who pays for the package
The party responsible for paying for the HOA resale package varies depending on the state and community in question. In some cases, the seller or homeowner is expected to pay, while in others, the financial obligation falls on the buyer. In Pennsylvania, for example, the seller is required by law to provide the package to the buyer and therefore typically pays for it.
The resale package is a set of documents provided by a homeowners association (HOA) to a buyer when a property is sold. It usually includes a resale certificate, which details the seller's financial standing in the HOA, and governing documents, which outline the rules, expectations, and obligations that the buyer will be expected to fulfill and abide by upon closing.
The purpose of the resale package is to offer protection and transparency to all parties involved in the property transaction. It ensures that the buyer is aware of any outstanding debts or violations associated with the property and can negotiate these at closing. It also reduces the risk for the HOA, as it guarantees that they will receive the money that is owed to them.
The resale package is typically ordered by either the buyer or seller after the purchase contract is signed, and it is often distributed to the buyer through their real estate agent. The HOA usually has a set number of business days, typically between five and ten, to provide the package upon request.
The fee for the resale package is generally handled by a property management company, which completes the certificate as a service to the client. This fee usually ranges from $175 to $300 but can vary by community and state. In some cases, if the property management company makes an error or inaccuracy in the certificate, they may be obligated to pay the community the amount that was not collected at closing.
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What happens after the package is received
Once the buyer receives the HOA resale package, they can review the contents of the package, which typically includes the resale certificate and the governing documents. The resale certificate provides information about the property, such as any outstanding fees, special assessments, legal issues, pending or unpaid violations, and fees due upon closing. It also offers insights into the community association's budget, planned expenditures, and any pending litigation. The governing documents outline the HOA's bylaws, rules, and regulations that the buyer will be expected to abide by upon purchase.
The buyer should carefully review the resale package to understand their financial obligations and the community's expectations and restrictions. This review process allows buyers to identify any concerns or issues that may impact their decision to proceed with the purchase. For example, if there are outstanding dues or unpaid violations by the seller, the buyer can negotiate these points during closing.
In some states, such as Pennsylvania, buyers have a statutory window of up to five days after receiving the resale certificate to rescind the purchase if they are uncomfortable with its contents. This period provides buyers with an opportunity to carefully consider the financial health, obligations, and restrictions associated with the property and the HOA.
If the buyer accepts the terms outlined in the resale package and successfully negotiates any necessary adjustments with the seller, they can proceed towards closing on the house. At this stage, the buyer will need to sign off on any required inspections and fulfil other process requirements. Once the buyer has closed on the house, the relevant parties, such as the community manager or specified entities, will be notified of the change in ownership.
It is important to note that the buyer can request the resale package directly from the seller or their agent in some states. Additionally, the cost of the resale package, typically ranging from $175 to $300, may be included in the closing costs and vary based on state and community regulations.
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Frequently asked questions
An HOA resale package is a set of documents that a homeowners association (HOA) provides to a buyer when a property is sold. It typically includes the resale certificate and governing documents.
The purpose of an HOA resale package is to protect both the buyer and the seller. The seller receives proof of their balance with their association, while the buyer can clearly understand what their fees will be and if there are any outstanding dues or unpaid violations.
The seller is required by law to provide the resale package to the buyer. However, either the buyer, seller, or their agents can request the package. In some cases, other parties involved in the transaction, such as the realtor, closing agent, lender, or attorney, may also request it.
The resale package typically includes the resale certificate (or closing statement) and the governing documents. The resale certificate provides information about the property, the seller's standing in the association, any outstanding payments or violations, and fees due upon closing. The governing documents outline the rules, bylaws, and regulations of the HOA.
The resale package is typically ordered after the purchase contract is signed. The standard processing time for the package is 5-10 business days, and it is often provided for a fee.
