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Legal IssuesCondo documents are seller’s responsibility
A recent Hotline caller asked whether her clients who are selling their condominium can give the buyers the homeowners’ association documents in their possession (which did not include the Resale Certificate) instead of requesting the documents from the association. The sellers wanted to avoid the substantial fee the association was charging to reproduce and supply the bylaws, rules and regulations.
The Pennsylvania Uniform Condominium Act requires sellers to provide buyers with copies of the condominium declaration, bylaws, rules and regulations of the association, as well as a certificate providing detailed information about several facets of the association, including the finances, budget and voting rights associated with membership. This obligation is restated in paragraph 20 of the Standard Agreement of Sale of Real Estate. Once sellers request these documents, the Act requires the association to provide them, thereby enabling the sellers to meet their contractual and statutory obligations. The Act protects the sellers from liability for any incomplete or inaccurate information provided by the Association.
While sellers could provide the buyer with their copies of the homeowners’ association documents, they are still obligated to request the documents from the association. The Act limits the circumstances in which its requirements may be varied or waived and the section obligating sellers to provide documents upon resale does not specifically state that it can be changed. The Agreement of Sale also states that the seller “will request” and “will promptly deliver” the resale documents to the buyers. Although the oft-spoken “everything is negotiable” mantra usually applies, it may not be the case in this instance.
Listing agents should make their sellers aware of their obligation to request the required documents from the association. Concerns over the fees charged by the association or excessive delays in receiving the documents from the association are concerns for which licensees can offer little assistance. If the costs are prohibitive or the delays excessive, the sellers should involve their attorney.
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About Karen: Karen Miller, Esq. is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of her practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. She routinely counsels employers on employee relations issues as one of the voices of the PAR Legal Hotline. |
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Great Post Karen.
In the past, we’ve had sellers request the ability to provide their current doc’s. Trouble is: through the course of time, there are usually updates to the rules and regs, changes made at regular board meetings etc that are not reflected in the original docs.
Although when a change is voted on and approved by the board/association, the residents often get an “update”, one “lost piece of paper” could put the seller trying to save a few bucks at risk of litigation (at least to me).
Although I understand a seller wanting to try to save a few dollars, I feel the risk isn’t worth it.
Also, I’ve encounterd a few associations that will change pretty much the same fee to generate the 5407 or 3407 certs (with or without docs). To be honest, I CAN understand why an association would want to do this. I think that most want to efficiently comply with the laws and make sure a new owner is give up to date information to avoid “issues” that may arrise after the sale.