Washing State Law: Condominium Resale Certificate
If you are anticipating buying a condominium in Washington State there is one document you should pay particular attention to. The Condominium Resale Certificate is document provided to the buyer discussing the financial health of the building. It is prepared by the Association or a management company, paid for and signed by the seller. Once provided the buyer has five days to review the document and decide whether to proceed with the purchase or not. Some of the provisions concern the unit being sold and others involve the entire condominium project.
As a buyer you are entering into a business arrangement with XX other people who also own units in the Condominium, to maintain the property for the benefit of all. You are no longer going to be a renter. You should strongly consider taking an active role in the management of the Condominium.
Provisions of the resale certificate include:
- Identify if there is the right of first refusal or restrictions on alienation of the unit.
- Identify current and past due or unpaid monthly and special assessments of the unit.
- Identify any past due monthly or special assessments for the entire project.
- Identify any Condominium Association delinquent obligations.
- Identify any Fees or Fines owed by unit owners.
- Identify any anticipated repairs to the building and if there are funds to cover such repairs in the condominium treasury.
- Identify any unsatisfied judgments or law suits against the condominium.
- Identify any pending law suits against the condominium.
- Identify any alterations or improvements of the unit which violate the declaration.
- Identify the total number of units, number of owner occupied units, number of builder owned units, and if any one owner owns more than 10% of the total number of units.
- Identify any known violations concerning building or health codes.
- Identify if there are any leases effecting the condominium or the unit and how they effect the unit.
- Identify if the project construction is completed or ongoing.
- Identify if the condominium is a property converted from an existing building or if it is new construction.
- Identify if the building is approved for financing by FNMA, FHLMC, VA or FHA.
- Identify the Condominium Insurance carrier and coverage.
- Identify any warranties or warranty claims.
- Attach the following documents:
- Condominium Declaration and Amendments
- Condominium Bylaws and Amendments
- Condominium Rules and regulations and amendments
- Annual Condominium financial statement for current and preceding year
- Current Condominium operating budget
- Copy of management agreement if condominium is managed by a professional management company
- Current reserve study
- Remarks section for other information:
You would think that the state law would include all of the information that a buyer may want to know before entering into an agreement to purchase a condominium in Washington State. But Realtors® and the Northwest Multiple Listing Service have provided an optional form which adds a few more items one should consider. Although they may seem redundant in some cases the four additional items include:
- Association rules and regulations including architectural guidelines
- Association minutes from the prior two years
- Association Board of Directors meeting minutes from prior two years
- Association financial statements from the prior two years.
A thorough review of the above documents will give you a keen insight into the financial health of the condominium before you fully commit to a purchase. If you are in the market for a condominium in Seattle I would be more than happy to assist you an make a wise decision.