Do I need a resale certificate?

Some homeowners think that because they pay assessments every month they should not have to pay for a resale package. They are of the opinion that it is a bunch of pages all put together that just sits and waits for us to "push the button” when they place their order. It is essential that management companies prepare these documents individually for each owner.

Once the preparer confirms they have all the correct documents in place, the "button is pushed” and the purchaser receives his or her packet. There is a cost involved to the management company for these services. It is quite an involved process that takes a large amount of oversight and staff to provide state legal documents.

Why should the homeowner, not the association, pay for a resale package?

It wouldn’t be fair for all owners to pay for resale certificates through their maintenance fees, since the average annual turnover of homes in a community ranges from 10 - 20%. Just as an association should not pay for Realtor commissions, real estate processing fees, etc. that pertain only to one home, so should it not be responsible for the preparation and Issuance of resale packages for an individual owner.


The Resale Certificate protects the buyer from purchasing into a community association without first obtaining "full disclosure". The disclosure statement includes the legal or pending legal status of litigation involving the Association. It also contains up-to-the-minute information about the assessments owed, outstanding special assessments and even pending assessments. The association's financial status and any outstanding loans owed by the association are included. It also provides any covenants restrictions or violations on the unit. All of these questions are answered and are entered in real time by a staff member when the order is placed. The document is not static: it requires keen oversight as the questions are researched and completed.


Many homeowners think these are the same as when they bought their homes. The truth is that over a period of time the board, with an owner vote when required, makes amendments, resolutions and changes to the Rules and Regulations on a regular basis. It takes staff to keep up with all the changes and add, delete, and replace the documents as they receive the new ones. Document management requires staff to change the documents and then upload the new ones to the website so we can just “push the button".

What is a resale package? Financial information about the homeowner association a home is part of is provided through the resale package. A resale package has two parts. 1. The first is the actual resale certificate, which may also be called a closing statement, estoppel, dues statement, paid assessment letter, 3407 or 5407. The resale certificate is specific to the home being purchased. It includes any past due payments to the association, pending violations, unpaid violations, unpaid special assessments and fees that are due on closing. It also includes information about the association as a whole: pending litigation, amounts in the reserve fund and planned capital expenditures for the upcoming year. Some states also include the type of voting that the association uses and other state-specific information. In Pennsylvania, Title 68 of the Consolidated Statutes defines what is required on the certificate.

2. The second part is the governing documentsfor the association: the master deed and bylaws, articles of incorporation, rules and regulations. If one is available, a plat map of the community may be included. Some states also require board meeting minutes and a copy of the reserve study. Other financial documents are often included in this section. A very small number of associations don’t distribute copies of their financials. They require buyers to come in person and review the financials in the office.

At what point in the purchase process does the resale package come into play?

Generally speaking, the resale package is ordered by either the buyer or seller after the purchase contract is signed. Sometimes, the seller will have much of the information, such as governing documents, available and share that with the buyer ahead of the contract being signed. Some realtors and listing agents know to contact the property management company and ask for things like monthly fee amounts so that they can let clients know as they show the property. They don’t have access to all of the information about the unit, like account balances.

Why is it important for the buyer to have all of this information?

The idea is to make sure that all the relevant information is provided to the buyer by the seller. The package is in place to protect both the buyer and the seller. For the seller, we’re providing proof of their balance with their association. For the buyer, the certificate lets them know clearly what their fees will be and if there is an upcoming special assessment. If, for example, the seller has back dues or unpaid violations, then the buyer is aware and those issues can be negotiated at closing. The buyer knows that the seller has taken care of all obligations. It should provide peace of mind.

How long does it take to get a resale package?

That depends on a few things. In the state of Pennsylvania, the standard resale processing time is five business days. The state of New Jersey requires it be completed in 10 working days.

How does the buyer get a resale package? Who requests that?

There’s no definite answer to that. In Pennsylvania, the seller is required by law to provide the information to the buyer, so either the seller or their agent requests the package. In New Jersey, the buyer most often requests the package. In NJ, it’s often the buyer who purchases it. Anyone involved in the purchase can buy the package: buyer, seller, realtor, closing agent, lender or attorney. Sometimes the lender will order it. But some states require that a specific party in the transaction order the resale package.

Why does the property management company handle resale packages?

Because we handle all of the accounts receivable for the association and have the rest of its accounting information handy as well. Some associations direct buyers and sellers to their association attorney to order the package, but the attorney ends up reaching out to us, ultimately.

How do self-managed communities handle resale packages?

They actually have whoever is in their office create these packages, whether that’s a board member or a clerical staffer or the community manager they’ve hired. The drawback to that is that the liability for mistakes or inaccuracies in the information is on the person providing the documents. If we, as a company, accidentally invert numbers and there’s an error, it would be up to us as management to pay the community association the amount that was not collected at closing due to our mistake. We also have to let the homeowner know that we made an error and tell them the correct amount they need to pay moving forward. We always double and triple check information and have it reviewed by others before submitting, to lower that risk of making a mistake. Having a professional property management company handle resale packages and other mortgage-related paperwork takes all of that liability off the association.

Do all property management companies have a dedicated office to handle these requests?

If not a dedicated office, there’s usually a dedicated person who handles this at a professional property management company.

Is there a cost?

Yes. The fees for resale packages vary from state to state and sometimes by community. It’s important for people to understand that, although there’s a cost, it’s an investment in peace of mind and transparency and it reduces your liability if the seller hasn’t made all association payments and isn’t up front about it. Without it, in New Jersey for example, debt goes with the property. So if the seller hasn’t paid dues in a year and the buyer doesn’t know that, that debt becomes the buyer’s responsibility.

Resale packages might sound complicated, but they don’t have to be. And they are an important tool in closing negotiations and for the peace of mind of everyone involved in the transaction: the seller’s obligations are taken care of, the buyer knows all about the community they are joining and the association board knows that it has been paid everything it is owed. Getting that information is vital to a smooth real estate transaction.

For more information about how working with a professional property management company can make dealing with resale packages and other financial items easier on your board, contact Pinnacle Realty Services. company.

Refinance Account Verification Letters

Are you refinancing your current mortgage and your bank is looking for documentation attesting to your account balance? Refinance Account Verification Letters provide owners with a statement of the amount owed on their account, if any, and a 365 day account history showing monthly transactions. This documentation is only used for refinances and not for resales.

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