PolicyCAI believes that homeowners should be informed about
association matters that may impact their decision to purchase a home/unit and
will educate them about their personal rights and responsibilities with regard
to the community association. Disclosure documents/resale certificates are
invaluable consumer information tools because it is vital that buyers know what
they are buying. Disclosure documents/resale certificates should be mandated by
state statute to ensure that every buyer is aware of essential information
relating to his new home or unit and the community association.
CAI supports mandating disclosure documents/resale certificates
for all ownership transfers of homes or units in a community association to
ensure that the association is notified of every pending sale and that the
transferee is aware of the obligations with respect to the property
It is the Public Policy of CAI that state legislatures should
mandate disclosure to potential buyers of homes or units in community
associations by providing copies of the following information:
Amount of current monthly assessments, maintenance fees and
other charges for common expenses;
Amount of approved special assessments;
Association governing documents;
Amount of reserve and capital funds available and committed
to current or pending projects;
Reserve study, if any;
Current operating and reserve budgets and year-to-date
financial statement;
Insurance certificates indicating association-provided
coverage;
Pending litigation excluding routine assessment collections;
Outstanding judgments against the association;
Any amounts the current owner owes the association;
Notice of any association alleged and uncured violation
pertaining to the home/unit;
Fees relating to the transfer of ownership or other
transactions;
A statement of the remedies available to the association as
a result of non-payment;
Current collection policy;
Notice of any restrictions related to the leasing of a unit;
List of association amenities;
Contact information for the association;
CAI recognizes that the preparer of the disclosure
documents/resale certificates incurs expenses relating to the preparation and
production of such documents and supports the right of the preparer to charge a
reasonable fee for such transactions.
Background
CAI recognizes that buying a home or
unit in a condominium, cooperative or planned unit development should be a
positive event, but can be a stressful and confusing time for the buyer. 30
CAI believes that full disclosure is an essential tool to ensure
that the consumer is aware of all relevant data that may impact the decision to
purchase a home or unit in the community association. Resale certificates will
also educate the consumer about rights and obligations as an owner of a home or
unit in a community association.
Additionally, while community associations are obligated to maintain a roster
of current owners, it is often impossible to track sales because of the
voluntary nature of resale certificates. The association may not be aware that a
new owner has taken possession of a home or unit until months or perhaps years
later. Mandating the submission of resale certificates will enable associations
to be alerted to ownership changes in a timely manner.
Frequently an association’s management company serves to fulfill the requests
for document production related to the sale of a property. Such requests may
come several months in advance or with short notice. Preparers incur labor and
material costs for such production and must attest to the accuracy of the
information. As such, preparers should be allowed to charge a reasonable fee for
the liability risk incurred by affirming the correctness of the information as
well as the preparation and production of disclosure documents/resale
certificates. Although most disclosures are of a routine nature, there may be
transactions or circumstances that justify additional charges. Such fees, at the
discretion of the association or its agent, may be required in advance of
production to ensure costs incurred to the association are properly allocated to
the parties to the transaction and in a timely manner. If the resale package is
demanded without reasonable notice, an expedited charge may be warranted.
Policy History
Adopted by the Board of Trustees, March 3, 2010