RESALE REQUESTS

SB 434, passed by the Texas Legislature, went into effect on September 1, 1999. SB 434 requires that mandatory associations provide, upon written request, homeowner association information.

Currently the Resale Certificate is a two (2) page form that requests information on the association’s financial status, (balance of reserve funds, amount of assessments, whether a special assessment has been approved, etc.); whether the association has pending litigation; what the status is of the individual property account, (whether assessments are due on the property) and whether the property in question is in compliance with the governing documents. In addition, the association must provide a copy of the insurance certificate, a current budget, a current financial statement, copies of all dedicatory instruments and any governmental notices about health or housing code violations.

State law provides that the association has ten (10) days to respond to the request. If the association does not provide the material within ten (10) days, the association may face the implementation of a fine.

SouthPoint Property Management, Inc. charges $300.00 for a Resale Certificate. The fee for Resale Certificates and the transfer fee are charged to individual buyers and are not considered “association” business. A Resale Certificate becomes invalid after sixty (60) days and a new one must be requested. Resale Certificate requests can be made to resale@southpointpm.com by the Title Company. Please provide the following information when making the request: name of seller, name of buyer, address and date of closing.

Association attorneys have reviewed SB 434 and determined that the law is “triggered” upon receipt of a written request. Upon completion, the Resale Certificate is forwarded to the person or entity requesting the information. Many associations use the Resale Certificate as an additional enforcement tool for the Declaration of Covenants, Conditions and Restrictions. Inclusion of information on a violation ensures the association’s right to pursue correction of the violation. However, noting a violation does not necessarily stop or delay the sale of a piece of property within an association, but the purchaser is placed on notice of the association’s intent to pursue enforcement of the violation.