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HOA Resale Certificates in Texas: Reselling a Home in a Planned HOA Community

January 15, 2025

If you are thinking of selling your home in a master-planned community, you may be asking, “Do I need a resale certificate in Texas?” Here’s the answer: to sell your pre-owned home (a home that is not owned by its builder) in an HOA community, a resale certificate must be provided to the buyer. But what is an HOA resale certificate? In this article we answer that question and explore everything you need to know about obtaining an HOA resale certificate in Texas.

The HOA and Its Role in Master-Planned Communities

A Homeowners Association (HOA) is a legal entity that manages and governs a residential community. HOAs provide a wealth of benefits to homeowners in master-planned communities such as maintaining and improving common areas in the community, including parks, trails, and amenities such as fitness centers, swimming pools, fishing ponds, playgrounds, and more. The HOA is also responsible for collecting dues that pay for the community’s amenities and services, and assessments to make capital improvements. When you buy a home in an HOA community, you automatically become a member of its HOA and are required to pay dues which may be collected annually, semi-annually, or monthly.

HOAs are also responsible for enforcing the community’s rules and architectural guidelines. These rules and guidelines help keep residents safe, keep the community looking its best, and maintain property values for homeowners.

As the developer of award-winning master-planned communities throughout Texas, Hillwood has selected FirstService Residential as the HOA management company for our actively selling communities. FirstService appoints a team to staff each community, including the General Manager who is responsible for oversight of HOA responsibilities within the community, and a Lifestyle Manager who plans and conducts hundreds of events, activities, and classes that residents can participate in each year.

Understanding HOA Resale Certificates in Texas

What is an HOA resale certificate? A resale certificate is a document prepared by a Homeowners Association (HOA) or its management company that provides a comprehensive financial and legal overview of both the HOA and the specific property being sold within the community.

It includes crucial information such as:

  • The HOA’s current budget and reserve funds
  • Anticipated expenditures for the upcoming year
  • The seller’s financial standing with the association
  • Any unpaid dues, fees, or violations associated with the property
  • Pending litigation involving the HOA
  • Information about common areas and maintenance responsibilities

Texas Property Code Section 207.003 specifies that a resale certificate for residential subdivisions and townhomes in Texas must include regular and special assessment amounts, the association’s current operation budget and balance sheet, and any right of first refusal on the property.

Importance of the HOA Resale Certificate in Home Resales

The resale certificate is a crucial document in property transactions involving HOAs, serving multiple important functions for buyers, sellers, and real estate agents. For buyers, it provides essential due diligence information, offering transparency about the HOA’s financial health, the community’s rules and regulations, and any outstanding dues or violations on the property. In Texas, unpaid HOA dues and fines generally stay with the property and can be transferred to the new owner if not addressed during the sale process.

Sellers benefit from the resale certificate as it allows them to fully disclose their financial standing with the HOA, potentially attracting serious buyers and facilitating a smoother transaction. Real estate agents rely on the resale certificate to ensure their clients are well-informed and protected throughout the sale process, as failure to obtain or deliver the certificate in a timely manner can result in contract cancellation. Additionally, the resale certificate helps reduce financial risk for the HOA by ensuring that any outstanding debts are addressed during the property transfer.

Are There HOA Fees When Selling a House?

There may be. If the homeowner has unpaid HOA dues or fines, the buyer will likely require that they be reimbursed at closing.

There are also fees associated with the generation of the resale certificate. In Texas, the HOA or management company may charge a fee of no more than $375 to provide the resale certificate. However, the buyer is required to pay this fee unless otherwise specified in the sales contract.

The certificate must be delivered within 10 business days once the order is placed and payment is received.

Resales in Communities Managed by FirstService

Those selling a home in a Hillwood Community managed by FirstService Residential should contact the FSR team to request a resale packet. A resale packet will include a resale certificate and the HOA’s governing documents. These include the association’s bylaws, articles of incorporation, architectural guidelines, covenants, conditions & restrictions, and any other documents that govern the community. You can find more information on resale packages and their role in the selling process in this article on the First Service Residential website.

Resale packet requests should be made at least 15 business days prior to the anticipated closing date. Be sure to include your name and address, the buyer’s name, purchase price, and the anticipated closing date. Contact the HOA directly to request your resale packet. A full instruction sheet is available here.

Resales in Self-Managed Communities

Those selling a home in a Hillwood Community managed by a different management company should contact that company or the HOA Board for instructions on how to request a resale packet. That company’s fees and instructions may be different than the instructions provided here, so be sure to check with them directly.

For buyers, sellers, and real estate agents alike, the resale packet serves as a valuable tool for informed decision-making and smoother negotiations. If you’re considering buying or selling a property in a planned community and have questions about obtaining a resale packet, don’t hesitate to reach out to your property management company. Their expertise can guide you through the process, ensuring you have all the necessary information to proceed with confidence in your real estate transaction.