Are you selling or buying a home that is part of a community governed by a Condominium or Homeowners Association? If so, you will need a resale disclosure package. Read on to learn more about this important set of documents.

Resale disclosure packages are essential in the sale of any property governed by a Homeowner or Condominium Association (“Association”). The seller is legally responsible per the Maryland Condominium and Homeowners Association Acts to provide the package to the potential buyer, and the Association is required to produce it. More specifically, the Acts require the seller to purchase and provide a Resale Disclosure Package to any potential buyer, no later than 15 days prior to closing if the unit is in a Condo Association and 20 days prior to closing for a Homeowners Association.

The resale package is a safeguard that protects both the buyer and seller. This crucial package provides all of the documentation buyers will need in order to fully understand their obligations to the Association, and the Association’s responsibilities to them. The resale packet should disclose the Association’s:

• Financial position. The packet will include a current budget, balance statement, income and expense statements, and disclosure of capital reserves.
• Amenities. Some Associations offer a unique set of community benefits for residents, such as maintained common areas and may also include amenities such as a clubhouse and pool or play areas, etc. The resale packet introduces the buyer to the value that their Association provides to the community.
• Pending litigation or actions. The Association is legally responsible to disclose to the buyer any building or health code violations, pending or existing lawsuits against the Association or any special assessments that the Association has passed.
• Governing documents. The Association’s governing documents outline all community rules and regulations, such as number and type of pets allowed and parking guidelines and restrictions. It also details the community’s architectural guidelines. This informs the new buyer what they can and cannot do with their property. For example, the governing documents will stipulate when the homeowner needs to submit an Architectural Modification Form for approval by the Board of Directors for any exterior changes.
• Previous Owner Violations. The resale disclosure packet provides information that is specific to the unit being sold. It will reveal if there are any existing exterior violations against the unit or property and detail what needs to be done to correct these violations. The package also outlines the unit’s financial information. This is to ensure that the buyer is buying a property with a clean financial slate and will not be responsible for anything owed to the Association from the previous owner.

The resale disclosure package is not static, but must be updated for each new potential owner because:

1. the monthly financial records for both the Association and the unit change on a monthly basis;
2. the Association’s budget may have changed, which means that the unit’s fees would have increased or decreased;
3. the governing documents may have been amended; and
4. the unit may have recently become out of compliance with the Association’s guidelines and the newly reported violation would need to be disclosed.

Each resale package must be meticulously prepared typically by the management company on behalf of your homeowner or condominium association. It’s an important service that benefits and protects both the buyer and the seller.