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First Time Home Buyer
If you’ve purchased a condominium you might have reviewed what’s called a “Resale Certificate.” What the heck is a Resale Certificate and why should I care?
A Resale Certificate is the homeowner’s association’s description of rules, regulations, financials, meeting minutes and articles of incorporation. In it, you’ll find out if your dog Fido is allowed to move in with you or not. You’ll find out if you’re allowed to rent out your condominium in the future and what rules pertain to rentals. You might see other rules like no barbecues allowed on the decks, no changing oil or washing your car in the parking lot and no installing hardwoods floors. If you don’t follow these rules you’ll be subject to fines or ultimately be asked by the association to leave the community.
Financials are another very important aspect of the Resale Certificate to determine if you’re making a safe financial investment by choosing this particular condo building. The most important question to ask is does the homeowner’s association have enough money in their reserve account to pay for future projects? Generally I like to see the association with at least 70% funded for future projects. This lowers the risk of a potential homeowner’s “assessment” or large single fee to pay for a particular exterior repair/upgrade.
Lastly the most recent copies of homeowner’s meeting minutes can be very indicative of the general integrity of the association. Things to pay attention to in the minutes- Has there been any talk of litigation? Are there any large projects being planned and if so, will the reserves cover the cost? Are there any new rules being passed that will negatively affect your ownership rights?
Sellers are charged a whopping $150-200 to provide buyers with a resale certificate (unless it’s bank owned by which case sometimes the buyer must pay) and since it expires after 3 months this information typically isn’t ordered until after you’ve had an offer accepted. So before you fall in love completely with a condo remember to wait for the Resale Certificate and review it carefully. Hopefully this checklist guide will help guide you toward making a safer condo investment.
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