Condominium Resale Certificates

On Behalf of | Jul 29, 2019 | Commercial Real Estate & Environmental Compliance |

Anyone who purchases a condominium unit is entitled to certain disclosures. If the unit is brand new and is being purchased from the Declarant, the buyer is entitled to a Public Offering Statement which contains extensive information concerning the anticipated organization, operation and condition of the condominium itself. In many cases there may not be much actual history in existence. On the other hand, a buyer of a condominium unit from an owner other than the Declarant is entitled to a resale certificate from the condominium association.

A resale certificate contains substantial information concerning the condominium as a whole. It does not generally include information specific to the physical condition of the unit unless the unit is going to be affected by work done on the condominium as a whole.

An example of this might be a roof which is common to two or more units, which might be disclosed as a capital project in the resale certificate. Other information which may be found in the resale certificate includes financial information concerning the current financial condition of the association (such as capital reserves and current assessments), limitations on resale or use of the condominium unit and any outstanding assessments owed by the seller on the unit.

This last item is very important. If they are not paid by the seller, the buyer of the unit will be responsible for payment of unpaid assessments. A condominium association is entitled to a statutory lien on each individual unit for any unpaid assessments. This means a lien may exist and be valid and enforceable without any evidence in court records that the lien exists on the unit. The use of a legitimate title company and the issuance of a valid title policy will ensure that the assessment is paid and any liens are released.