Any residential real estate transaction can be paper-intensive for both the seller and buyer. This is especially true if the home in question is in a Florida-based homeowners association (HOA). This is because Florida HOA’s require a home resale packages to be delivered from the seller to the buyer. Resale packages fill in the buyer on the rules and regulations of the HOA, the HOA’s current condition and whether the seller currently owes any fines or dues to the HOA. The paperwork in a resale package protects the HOA legally and financially and provides information that many buyers would want to know before making a property purchase. Below we explore the contents of the resale package, why it’s a useful document for the buyer and how one can go about obtaining a resale package prior to the sale or purchase of a home.

Parts of Home Resale Packages

In Florida, the first part of the resale package is called the estoppel. Outside of the state, there may be other names for estoppel including “closing statement” or “resale certificate”. If you are new to association home purchases in Florida, your HOA, realtor, title company and real estate attorney will be familiar with the local terminology.

The estoppel provides the buyer with background about the property and its status with the HOA. It outlines a list of past due payments owed to the association, a summary of any pending violations and states the fees that are due upon sale of the property. In it, the buyer will also find information on the HOA’s vital statistics including 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 Florida, the amount that is paid for the estoppel certificate must be displayed on it.

The second part of the resale package consists of the HOA’s governing documents. These documents include the association’s articles of incorporation, bylaws and rules and regulations. Importantly, the governing documents also include the master deed. Master deeds are records of the project of which the property is a part. The master deed records the individual properties’ division into individually owned plots and shows that the common areas are commonly owned by the members of the HOA. Often, the governing documents also include a plat map or cadastral map showing the division of the master property into individual lots. Typically, the HOA’s financial statement is also included. In Florida, the governing documents of an HOA are regulated by Chapter 720 of the Florida Statute.

Timeframe and Deadlines

Florida statute states the period of time by which the information in the resale package must be provided. As of 2020, Florida law changed this timeframe from 15 days to 10 “business days” once the resale package has been requested in writing from the prospective parties to a resale transaction.

“In Florida, the amount that is paid for the estoppel certificate must be displayed on it.”

Fees

Most HOAs charge a fee to provide resale packages, often charging a “rush premium” if the documents are required before the end of the statutory deadline. Note that an inspection of the house and property are also often required – and these can also incur a fee, as well as take up time.

In addition to these fees, any other fines, dues and other monies owed to the HOA must be paid by the seller prior to the transaction being approved.

Potential Complications

The inclusion of an HOA or Condo Association in the sales process makes for a more complex and often a more costly transaction. When all fees and dues are paid and all paperwork has been complied with, an HOA may still require a seller to complete certain improvements on their property. For example, because uniformity is of the utmost concern for many HOA’s returning fencing to its original color or pressure washing driveways back to their original hue may be required before a sale can take place.

See five rights your HOA or condo association are required to respect

The Importance of Legal Counsel

Many buyers and sellers attempt to “go it alone” legally in HOA transactions working with a title agent and a realtor but not hiring a lawyer. In most real estate transactions, it is a good idea to hire an experienced real estate attorney, but in HOA-related transactions it is essential. A good real estate lawyer can ensure:

Time Management: Manage the deadlines to make sure that sellers and buyers remain compliant with their obligations to HOA’s and lenders and deliver their offers and other documentation on time

A Higher Probability of Closing: A residential real estate sales agreement is a legally binding document, as are the governing documents presented in a home resale package. Why leave these documents up to open interpretation when you can review them prior to incurring obligations with a qualified and experienced real estate attorney. Ensuring that your rights and obligations are clearly understood and that your best interests are represented before any potential conflicts or complications occur means a smoother and more fluid transaction. Remember, your title agent and realtor cannot give legal advice, only a lawyer can do that!

South Florida Law

There are many reasons why it is important to contact an attorney as early as possible in the process of buying or selling a property in Florida.

If you are selling and/or are looking to buy an HOA property in South Florida, then call us today for a free consultation (954) 900-8885 or reach out via our contact form.

Nima Ajabshir, Esq. is the Managing Partner at South Florida Law, with an emphasis in Real Estate Law. Mr. Ajabshir received his Bachelor’s Degree in Political Science from Florida State University, where he graduated Cum Laude. Mr. Ajabshir, Esq. attended and received his Juris Doctorate from St. Thomas University School of Law. In addition to being an attorney licensed to practice in the State of Florida, Mr. Ajabshir, Esq. has his real estate license, and is a licensed title insurance agent so he has experience in all facets of a transaction.