Questions About Disclosure Packages - Resale Certs

• Why Is A Resale Certificate Required?

  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.

• What Is "Disclosure Information" Or A “Resale Certificate”?

  Currently the Disclosure Information provided includes a Resale Certificate; a two (2) page form (created by TREC, the Texas Real Estate Commission) 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.

• How Long Does It Take To Get Disclosure Information?

  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. SBB Management Company (SBB) facilitates these resale requests for the associations that we manage.

• How Do I Get The Disclosure Information?

  SBB currently utilizes an on-line service called CondoCerts to facilitate Disclosure Information requests. CondoCerts makes it easy for requestors to access the online system, to pay for the Disclosure Information through a checking account draft or with a credit card and permits the requestor to download the materials once the package has been completed.

• What Is The Cost Of The Disclosure Information?

  SBB charges $350.00 for the Disclosure Information package. A transfer fee of $150.00 is charged for updating homeowner records to reflect new ownership. The fee for the Disclosure Information and the transfer fee are charged to individual owners and are not considered “association” business.

  There may be additional costs involved for specific associations. Some associations have Capital Funding Fees or Administrative Costs that are charged at the time of a sale. An expedited order can be placed for an additional fee of $100 to receive the Disclosure Information within 3 days.

• How Is The Request For Disclosure Information Handled?

  Disclosure Information requests to SBB are handled by the Resale department. The request is forwarded simultaneously to the Accountant. Accountants research the financial information and complete the financial portion of the form. The Resale department checks the SBB database to determine whether there is a compliance issue. If the Resale department has any questions about the compliance information in the database, the Resale department will contact the Community Manager for clarification.

• Do I Have To Get The Disclosure Information or Resale Certificate?

  Several local association attorneys have reviewed SB 434 and determined that the law is “triggered” upon receipt of a written request. SBB makes it clear to all Realtors, Title companies, sellers and buyers that verbal assessment information can be provided at any time and that neither the association or SBB requires the preparation of the Disclosure Information package or Resale Certificate.