The Resale Certificate Process
What Sellers, Buyers, and Boards Need to Know
When a homeowner sells a property within an HOA, the resale certificate is one of the most important documents in the transaction. It provides a clear snapshot of the seller’s financial and compliance standing within the community and protects buyers, sellers, agents, and the HOA.
What Is a Resale Certificate?
A legally required document in many states that outlines:
It gives buyers transparency and protects the HOA from liability.
Step-by-Step Process to How the Resale Certificate Process Works
Additional Responsibilities for the Board
Custom Questionnaires: Some escrow or lender requests include detailed forms, which are completed manually for accuracy.
Document Maintenance: Expiring documents (like insurance or financials) are monitored and updated to keep resale packets current.
Key Definitions that might help:
Resale Certificate: A legally required document (in many states) that provides a financial and compliance summary of a property within an HOA. It protects all parties in a real estate transaction by disclosing dues, violations, rules, and other critical details.
CC&Rs (Covenants, Conditions & Restrictions): The governing rules homeowners must follow in an HOA community. Included in every resale packet.
Tickler File: A tracking system used by management teams to monitor the progress of resale certificate requests and ensure nothing falls through the cracks.
Escrow Statement: A financial summary from the escrow company showing the funds being distributed at closing. It must match the HOA’s resale order to avoid discrepancies.
Lockbox ID: A unique number assigned to each homeowner that links their payments to the correct HOA account after a property transfer.
Settlement Funds: The money paid at closing, including any HOA dues, fees, or fines owed by the seller. These are used to update account balances and transfer ownership.
