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 a document provided to the buyer discussing the financial health of the building. It is prepared by the Association or a management company. Once provided the buyer has five days to review the document and decide whether to proceed with the purchase or not. (The time lines and process can be a little different when working with a bank or in a short sale). Some of the provisions concern the unit being sold and others involve the entire condominium project.
Your title company and in most cases your lender too, will also require a copy of the resale certificate and will review it.
As a buyer you are entering into a business arrangement with xx amount of 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:
1.Identify if there is the right of first refusal or restrictions on alienation of the unit.
2.Identify current and past due or unpaid monthly and special assessments of the unit.
3.Identify any past due monthly or special assessments for the entire project.
4.Identify any Condominium Association delinquent obligations.
5.Identify any Fees or Fines owed by unit owners.
6.Identify any anticipated repairs to the building and if there are funds to cover such repairs in the condominium treasury.
7.Identify any unsatisfied judgments or law suits against the condominium.
8.Identify any pending law suits against the condominium.
9.Identify any alterations or improvements of the unit which violate the declaration.
10.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.
11.Identify any known violations concerning building or health codes.
12.Identify if there are any leases effecting the condominium or the unit and how they effect the unit.
13. Identify if the project construction is completed or ongoing.
14.Identify if the condominium is a property converted from an existing building or if it is new construction.
15.Identify if the building is approved for financing by FNMA, FHLMC, VA or FHA.
16.Identify the Condominium Insurance carrier and coverage.
17.Identify any warranties or warranty claims.
A thorough review of the above document 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 I would be more than happy to assist you in making a wise decision.