"If your association can see your backyard from space, you should probably be able to see association documents before you buy your home." — John Oliver HOA Segment - April 2023
Buying a home in a common interest community (condo, co-op, townhome, single family, attached, detached, etc.) should not be a gamble. Homeowners should be prepared to perform appropriate due diligence and invest the time and money required BEFORE purchasing to understand the details of what is most likely their largest asset.
Resale certificate fees are capped at $275 by Washington state statute. Additional fees are invalid / illegal.
RCW 64.34.425 – Resale of Unit | Related RCW 64.90.640
The association, within 10 days after a request by a unit owner, and subject to payment of any fee imposed pursuant to RCW 64.34.304(1)(l), shall furnish a resale certificate signed by an officer or authorized agent of the association and containing the information necessary to enable the unit owner to comply with this section.
For the purposes of this chapter, a reasonable charge for the preparation of a resale certificate may not exceed $275.
The association may charge a unit owner a nominal fee [$100] for updating a resale certificate within six months of the unit owner's request.
The unit owner shall also sign the certificate but the unit owner is not liable to the purchaser for any erroneous information provided by the association and included in the certificate unless and to the extent the unit owner had actual knowledge thereof.
WUCIOA (RCW 64.90) allows for periodic inflationary adjustments to the $275 maximum. RCW 64.34 does not.
The Washington State legislature was decisive when it increased the maximum resale certificate fee from $150 to $275 via SB 5224 which became effective July 24, 2011. There is no ambiguity: $275 is intended to include all costs to provide a resale certificate. Despite unambiguous statutory requirements, many management companies charge owners fees in excess of $275:
1) fees for "processing" ($20 to $50)
2) fees for "rush processing" (generally over $100)
3) fees for meeting minutes
RCW 64.90.640 requires 12 months of meeting minutes, but RCW 64.34.425 is less precise:
(q) A copy of the declaration, the bylaws, the rules or regulations of the association, the association's current reserve study, if any, and any other information reasonably requested by mortgagees of prospective purchasers of units. Information requested generally by the federal national mortgage association, the federal home loan bank board, the government national mortgage association, the veterans administration and the department of housing and urban development shall be deemed reasonable, provided such information is reasonably available to the association;
$275 IS. THE. UPPER. LIMIT.
Your association's management contract likely includes language about handling unit resale and transfer of ownership without disclosing a fee schedule for resale certificates. Here's an example:
We may process Resale Certificates, as applicable to the Association, as well as certain financial forms and questionnaires necessary to complete loan packages for prospective purchasers. Such costs shall be assessed to the Owner or Buyer as appropriate and shall not constitute a charge to the Association.
The Illinois Supreme Court decision in Channon v. Westward Management makes things interesting.
As an example, California, Illinois, Texas and Washington State all have different statutes requiring sellers to furnish resale certificates to potential purchasers. A key difference is that TX in 207.003(c) (but not in 82.157) and WA limit absolute resale fees to sellers, whereas CA Civil Code and the ILCS require "reasonable" fees. There are obvious statutory similarities related to legislative intent and whether "protections" are primarily intended to only purchasers or to both purchasers and sellers.
Long story short, upholding limits on fees charged to sellers, even when the statutes appear to cap such fees, is harder said than done.
Washington State Resale Requirements
Resale certificate contents are governed by state statute.
Your Association is ultimately responsible to comply with statutory resale requirements.
RCW 64.34.010 applies resale requirements from RCW 64.34.425 to all condominiums created before 1990 (i.e. RCW 64.32).
RCW 64.34.304(1)(l) - Unit Owners' Association - Powers
(1) Except as provided in subsection (2) of this section, and subject to the provisions of the declaration, the association may:
(l) Impose and collect reasonable charges for the preparation and recording of amendments to the declaration, resale certificates required by RCW 64.34.425, and statements of unpaid assessments;
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