Real Estate — Condominium Law
Selling a condo involves a few extra steps compared to selling a house. The association’s rules, finances, and approval processes can all affect your sale — and knowing what to expect will help you close faster and avoid surprises.
Step 1: Review Your Governing Documents
Before listing your condo, review the Declaration, Bylaws, and Rules and Regulations for any restrictions on sales. Common provisions include a right of first refusal — which gives the association or other owners the right to purchase your unit before you sell to an outside buyer — and requirements for board approval of the sale or the buyer.
Step 2: Request a Condo Resale Package
Most states require sellers to provide buyers with a resale package — a collection of documents about the association. This typically includes the governing documents, the current budget, the reserve fund balance, meeting minutes, any pending special assessments, and information about current litigation. Request this package from the association early — it can take time and may involve a fee.
Step 3: Get a Payoff Statement for Any Liens
If you owe any unpaid HOA fees or special assessments, the association may have a lien on your unit. These must be paid off at closing. Request an HOA estoppel letter — a document confirming the current balance owed and any outstanding violations — from the association before closing.
Step 4: Price it Right for a Condo Market
Condo pricing is affected by factors unique to the building — HOA fee amounts, the building’s financial health, amenities, pet policies, rental restrictions, and whether the building is FHA or VA approved. A knowledgeable real estate agent familiar with your specific building and the local condo market is invaluable here.
Step 5: Disclose Everything
As a seller you have disclosure obligations — both under state law and potentially under the association’s rules. Disclose known defects in your unit, any ongoing disputes with the association, pending special assessments, and any issues with neighbors or building systems you are aware of. Failing to disclose material facts can expose you to legal liability after the sale.
Step 6: Be Aware of Buyer Financing Challenges
Your buyer’s ability to get financing depends not just on their own creditworthiness but on the building’s eligibility. FHA and VA loans have strict requirements — if your building is not approved, it significantly limits your buyer pool. Buildings with high investor ownership, pending litigation, or financial problems may be difficult to finance. Work with an agent who understands these issues upfront.
Step 7: Closing Costs Specific to Condos
In addition to standard closing costs, condo sales often involve:
- HOA transfer fees — charged by the association to transfer ownership
- Move-out fees — some buildings charge for use of the elevator or loading dock
- Estoppel letter fees
- Resale package fees
- Any outstanding assessments or violations that must be cleared before closing
Key Takeaways
- Review your governing documents for right of first refusal and board approval requirements
- Request the resale package from the association early — it takes time
- Clear any HOA liens or unpaid fees before closing
- Disclose all known defects and association issues to buyers
- Understand how building financing eligibility affects your buyer pool
- Budget for HOA transfer fees and other condo-specific closing costs
Disclaimer: The information on LegalConsultants.com is provided for general informational purposes only and does not constitute legal advice. Always consult a qualified attorney for advice specific to your situation.