We have many homeowners who think that because they pay assessments every month they should not have to pay for a resale package. They are of the opinion that it is a bunch of pages all put together that just sits and waits for us to “push the button” when they place their order.
I would like to clarify why it is essential that management companies prepare these documents individually for each owner. First, it is a legal document required by law in many states as it protects the buyer from purchasing into a community association without first obtaining “full disclosure”. It contains a disclosure statement that includes the legal or pending legal status of litigation involving the association. It contains up-to-the-minute information about the assessments owed, outstanding special assessments and even pending assessments as required in many states. It provides the association’s financial status and any outstanding loans owed by the association. It also provides any covenants restrictions or violations on the unit. All of these questions are answered and are entered in real time by a staff member when the order is placed. The document is not static; it requires keen oversight as the questions are researched and completed.
Secondly, resale package contains the governing documents. Many homeowners think these are the same as when they bought their homes. The truth is that over a period of time the board, with an owner vote when required, makes amendments, resolutions and changes to the Rules and Regulations on a regular basis. It takes staff to keep up with all the changes and add, delete, and replace the documents as they receive the new ones. Document management requires staff to change the documents and then upload the new ones to the website so we can just “push the button”.
Next, some states require that the last six months of approved minutes are attached. This requires continually adding and replacing them each month. In some states a physical inspection of the home is either included in the price or is an added request, but a person from the management company actually has to make a visit to the unit. Many times they have to make an appointment with the responsible party, only to show up but the person does not, requiring an additional trip before an inspection report can be obtained. The budgets, audits, reserve studies, certificates of insurance, annual reports and all other documents require removal and replacement when the current ones expire. This all requires diligence and time to obtain the appropriate documents before an order is filled.
Once the preparer confirms they have all the correct documents in place, the “button is pushed” and the purchaser receives his or her packet. Many management companies are using third party services as a central point to order and upload documents to make it easier for homeowners to access what they want 24/7. There is a cost involved to the management company for these services. So, all in all, it is quite an involved process that takes a large amount of oversight and staff to provide a legal document that complies with state statutes.
Why should the homeowner, not the association, pay for a resale package? It wouldn’t be fair for all owners to pay for resale certificates through their maintenance fees, since the average annual turnover of homes in a community ranges from 10 – 20%. Just as an association should not pay for Realtor commissions, real estate processing fees, etc. that pertain only to one home, so should it not be responsible for the preparation and issuance of resale packages for an individual owner.