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What is a "Resale Certificate"?

When buying single family homes in communities with a Home Owners Assocation (HOA), oftentimes the HOA will require a "Resale Certificate". You may also find similar requests from a town or city. Basically, a resale certificate is the opportunity for the communities to record the sale and require certain standards for the property be enforced (typically a $150-$250). In addition, it gives the purchaser of the property all the information and disclosures in regards to deed restrictions, etc. Here is the language from the Texas Property Code Chapter 207 . "Resale certificate means a written statement issued, signed, and dated by an officer or authorized agent of a property owners' association that contains the information specified by Section 207.003(b)."

The Texas Real Estate Commission has promulgated a form for notifying buyers that the home they are buying is "property subject to mandatory membership in a Home Owners Association". This is required by law and must be given to the buyer. There are several options to check but in summary, it will inform the buyer of all the information they need in regards to membership, deed restrictions, fees, etc. This document becomes part of the sales contract as an Addendum.

In my experience and in regards to the delivery of information to the buyer, there can be some confusion over this document if the HOA in question doesn't publicly provide it online via it's website. The parties to the contract involved then get into delivery times and dates. This can be a problem if the HOA's don't deliver information on time. But, again, most often this isn't necessary due to the availability online.

For properties that aren't a member of an HOA, buyers should still know the properties deed restrictions, water districts, fees, etc. For example, in Meadows Place, Tx, there is a requirement for an occupancy certificate that costs $70. A line item in that occupancy certificate requires that the property must meet certain standards for the amount of concrete separation in the driveway. The interesting thing is that this is all done after you close. If your buyers agent doesn't make you aware of this, the city inspector may come by after you've bought the house and say, "Hey, you need to fix this section of the driveway or we won't give you an occupancy certificate". This could cost you several hundred if not thousands of dollars. Not exactly a welcome to the neighborhood.

In summary, the resale certificate is a document that is there to protect the buyer of the property and keep them from any surprises. The fee that is paid is usually done on the closing document and is a negotiable item in the contract. However, it is typically paid by the buyer. Next time you buy a house, or if this is your first time, make sure you agent is paying attention to this part of the process. It may not be fun, but it is important and a good agent will make it as seamless as possible.

#SugarLand #Realtor #RealEstate #Houston #Katy #Memorial #MemorialWest #HomeBuying

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