A resale certificate is a document that a unit owner must provide to the purchaser before they can sell their condominium unit. Any unit owner who wishes to sell his or her unit needs to be aware of the resale certificate requirements. These requirements apply to all Washington condominiums. Generally, a seller has 10 days from the date of mutual acceptance of an offer to provide buyers with a signed copy of their association's fully-executed resale certificate, and then, from time of receipt by the buyer, buyer has 5 days to review the documents, and either approve or disapprove of the certificate.
The resale certificate must contain certain information, which is set forth in detail in RCW 64.34.425, part of the Washington Condominium Act. This section of the Condo Act applies to both old act (Horizontal Property Regimes Act, RCW 64.32) and new act (Condominium Act, RCW 64.34) condos.
In brief, the certificate must inform a purchaser of, among other things, the financial status of the association (including the budget); any dues still owed by the unit’s current owner; the amounts of assessments, dues, and fees that must be paid by owners within the community; copies of the community’s governing documents; and information about any reserve studies (or, just as important, the lack of reserve studies). It is important that the association’s board of directors familiarize themselves with and be prepared to comply with the statutory requirements.
The information contained in the certificate must be accurate, based on the information contained in the books and records of the association. (This is one reason why it is essential for associations to keep detailed financial records – the financial records must be detailed enough to comply with the extensive requirements of RCW 64.34.425.) If the association is discussing or planning significant repairs or maintenance, that information should also be disclosed to the purchaser.
Despite the fact that the law requires a unit owner to provide the resale certificate to their buyer, the certificate must be signed by an officer or agent of the association. Once a unit owner requests the certificate from the association, it must be provided within 10 days.
It is important to note that once the resale certificate has been provided, the legal rights of the former and new owners are affected. For instance, the purchaser’s liability for unpaid assessments or fees against the unit can be limited. Also, the purchaser may void the sale until the certificate has been provided, and for up to 5 days after that, or until conveyance of the unit.
The resale certificate requirement is not a unit owner’s only obligation to potential purchasers. Many other laws apply to both sellers and purchasers of condo units.
We, as real estate brokers, are NOT legally allowed to provide legal advice pertaining to interpreting resale certificates and accompanying documents. We do, however, endeavor to help in acquiring and accounting for the various documents, in order to assist in obtaining as much required and corollary information.
A much-used term in real estate is thus: If you have any questions about any aspect of your real estate transaction, you are advised to seek the advice of qualified legal counsel. Here, for your convenience, are a number of more well-known real estate law firms with in-house condominium law specialists:
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