A Buyer’s Guide to Condo Resale Disclosure Documents

Buying a Condo?



In the DMV region, condominiums represent a significant portion of the real estate market. Due to the predominance and popularity of condos in our area, there are certain laws pertaining specifically to condo sales that any potential condo buyer should know, namely the laws regarding resale disclosure documents.

The Maryland Condominium Act, the Virginia Condominium Act, and the District of Columbia Condominium Act all mandate that once a prospective buyer signs a contract to buy a condo unit, the buyer is entitled to receive copies of the resale disclosure documents, also known as the resale disclosure packet or package. The responsibility of the delivery of the disclosure documents falls primarily on the seller. What’s more, the buyer has a certain number of days after receiving the resale disclosure documents to cancel the contract on the condo unit in question and have their deposit refunded, no questions asked.

So what could possibly be contained within the resale disclosure package that could cause a buyer to walk away from a condo unit altogether? Read this guide for condo buyers to find out everything there is to know about condo resale disclosure documents, the condo disclosure laws in the DMV, and why it’s so important for condo buyers to work with an experienced real estate agent or team to be successful.

What Are Condo Resale Disclosure Documents?

Condo resale disclosure documents are records containing a variety of important information concerning a condo building or complex, and are assembled by the condo’s homeowners association. These records include legal documents that describe the formation of the condominium, how it operates, and all the rules and regulations of the condominium in question (think parking, pet, or noise restrictions). Resale disclosure documents also include detailed financial records that will tell a prospective buyer how a condo association collects and spends its money. The following items are things that generally must be disclosed to prospective condo buyers in the resale disclosure packet:

  • Copy of the condo association’s current budget and financial condition, including reserve funds
  • Insurance coverages for the condo
  • Limitations on number of persons who may occupy a condo unit
  • Copy of the current bylaws, architectural guidelines, and rules and regulations of the condominium
  • A breakdown of regular monthly/yearly HOA fees
  • Statement of any and all unpaid fee assessments, special assessments, or upcoming assessments
  • Records of any pending lawsuits or judgements against the condo association that could impact unit owners or the association as a whole
  • Certification that the condo association has filed their annual report with the state board
  • Records of all approved unit alterations or renovations in accordance with condo policies
  • Copies of any notices given to current condo unit owner regarding violations of condo association policies

The items that must be disclosed within resale disclosure documents for condos can differ state to state, but Virginia and D.C. requirements are nearly identical (and include the above items). If you’re serious about buying a condo, we highly recommend that you ask your agent about your state’s specific condo resale disclosure laws. You can also learn more about your state’s condo disclosure laws online; visit the National Conference of State Legislature’s website to research the different condo laws for each state in the U.S.

What to Look for in Condo Resale Disclosure Documents

Condo resale disclosure packages can be hundreds of pages of documents altogether. Considering the time constraints placed on condo buyers’ right to rescission, it can be difficult to read and review all of the disclosure documents if you don’t know what you’re looking for. We can’t impress upon buyers enough how important it is to work with the right agent, so that you have help during this process. If you’re interested in buying a condo, choose an agent that has done this all before, preferably many times. Make sure it’s a real estate agent or team who has experience with condo resale disclosure documents, so they can tell you right away if a document is missing, incomplete, or contains information that may affect your decision to buy the condo.

There are certain things that buyers (and their agents) should look for first when they receive the condo resale disclosure package. Though everything contained within the package can be argued to be important in its own right, there are a few things that are generally considered to be must-sees for condo buyers. The following items should take priority when you’re reviewing your condo resale disclosure documents:

  • Special Assessments: A special assessment is the amount of money that a condo association needs in order to pay off its outstanding debts or pay for a project that was not part of the annual budget. This dollar amount is levied against all condo unit owners and each owner is required to pay a fraction of the total cost. An example of a special assessment would be the decision to add a pool or leftover costs from installing a sauna in the common area of the condo building. Buyers need to be aware of any special assessments, so they can be prepared to pay the fees at closing or once they take over official ownership of the condo unit.
  • Lawsuits or Judgements: Buyers need to pay close attention to any legal issues surrounding the condo’s homeowner association. Pending lawsuits or past judgements against the condo association may mean future trouble for the building and could negatively affect the value of the condo you’re looking to purchase. Legal problems can also be a source of fee hikes and special assessments.
  • The Condo Association’s Budget & Reserve Fund: It is critically important that buyers review the amount of money that a condo homeowners association has saved up for future repairs because it can impact the amount of money that unit owners will have to pay in special assessments or hike up the regular monthly condo fee. A condo association with a severely depleted cash reserve may be a forewarning of financial problems, aka a red flag for buyers.
  • Violations of Condo Policy: One of the first things a buyer in contract to buy a condo should do is check the resale disclosure documents for any recorded violations against the seller. Once you become the new owner, you may be responsible for remedying these violations and it could be pricey. Such violations could include unapproved renovations or failure to comply with other condo policies.
    Be sure to look for these important priority items first when you receive the condo resale disclosure documents for the condo you’re in contract to buy. We recommend that you set up a meeting with your agent or real estate team right away once the seller delivers the documents to you. Weigh the information contained in the condo resale disclosure package carefully and seriously consider what you may be getting yourself into by purchasing a particular condo. Your agent should be able to explain everything to you in terms that are easy for you to understand.

Find something that concerns you within the condo resale disclosure package you’ve received? Lack confidence in your agent’s abilities? Buy a condo with the Keri Shull Team. Work with the best to get the best advice. Call us!

How Condo Resale Disclosure Documents Are Sent & Received

In the sale of a condo, the homeowners association is responsible for providing the seller with the resale disclosure package, and then the seller is responsible for delivering the disclosure documents to the buyer. This is all usually done by regular mail or e-mail, though it can also be done in person. The seller is responsible for any fees or charges associated with providing and delivering the resale disclosure package to the buyer. Once the buyer signs the contract on the condo, the seller has a limited amount of time to deliver the disclosure package to the buyer, and then the buyer has a limited amount of time to review the documents and cancel the contract on the condo. This window for canceling the contract is called the buyer’s right to rescission. Once the buyer’s right to rescission ends, the condo resale disclosure documents are the buyer’s to keep, but they can’t be used as reason to opt out of buying the condo unless the documents are incomplete or missing, which is another thing entirely (keep going to learn more about that). It should also be noted that the buyer doesn’t have to have a reason to cancel the contract during the rescission period.

These are the time constraints placed on condo buyers and sellers as mandated by the condo laws in D.C., Maryland, and Virginia:

  • D.C.: The seller has 10 days after the contract is signed to deliver the disclosure package to the buyer. The buyer has three days to cancel the contract once the disclosure package is received.
  • Maryland: The seller must deliver the disclosure packet to the buyer within 15 days of closing the deal. The buyer has seven days to cancel the contract once the disclosure packet is received.
  • Virginia: The seller has 14 days once the contract is signed to deliver the resale disclosure documents to the buyer. The buyer has three days to cancel the contract upon receipt of the condo’s disclosure documents IF hand-delivered or sent by e-mail; if they were mailed, the buyer has six days instead of three.

The condo association is responsible for keeping updated records for each condo unit’s resale disclosure package and reviewing it once a year, but the seller is the one required to request the disclosure packet from the association, so they can fulfill their obligations to deliver it to the buyer. Typically, the manager of the condo’s homeowner association is in charge of compiling everything. However, it is not uncommon for a condo resale disclosure package to be missing certain documents. It’s up to the buyer (and the buyer’s agent) to ensure that everything is there. If a document that the state requires the seller to give to the buyer is not included in the disclosure package, the buyer has the right to cancel the contract, even if their rescission window has already closed.

For example, if a condo owner-turned seller does not include a copy of the current bylaws, architectural guidelines, and rules and regulations of the condominium in the resale disclosure package in D.C. or Virginia, the buyer can exit the contract on the condo any time before closing. Most agents would encourage their clients to exit the contract and not buy the condo if any documents were incomplete or missing from the disclosure package, though it’s ultimately the buyer’s decision in the end. If you really love a condo you’re in contract to buy and want to give the seller the benefit of the doubt, ask for a copy of the missing documents — stat!

Know that a good agent will find missing or incomplete condo resale disclosure documents to be a potential red flag. Without going into too much detail yet on why condo disclosure documents are so important (that’s coming up next), be aware that a seller or homeowners association could be purposefully trying to hide information from you, the buyer. Some condo associations may think they can get away with it. After all, too many condo buyers and sellers aren’t aware of resale disclosure laws and won’t know that something is missing. That’s why it’s so important for condo buyers (and sellers) to have an experienced and reliable real estate agent or team on their side.

Need the kind of agent that knows their way around condo resale disclosure laws in the DMV? Look no further than the Keri Shull Team!

Though it is state law in D.C., Maryland, and Virginia for condo sellers to provide buyers with the resale disclosure documents, buyers are not required by law to do anything with the disclosure documents upon receiving them. Even though it’s a state requirement designed to protect condominium buyers, not all DMV condo buyers realize how important these disclosure documents can be. However, it is always in the buyer’s best interest to pay close attention to the information contained in the condo resale disclosure package because it can forewarn you of any extra costs and alert you to the fact that you may be making the wrong deal for your financial situation.

Condos appeal to buyers in the DMV for many reasons, such as the potential investment value of owning a condo in this area. Condo buildings in hot neighborhoods will likely go up in value and the buyer may be able to sell the unit for a profit in the future. On the other hand, if a lengthy construction plan is announced nearby it could hurt the value of the condo building and its units due to the noise and mess that comes along with construction sites. Existing construction plans that affect the condo building in any way must be disclosed within the resale disclosure package, so a buyer that takes the time to thoroughly review the documents can learn about the planned construction site ahead of time and make a more informed decision on whether or not this is the right condo for them.

Thorough examination of the condo resale disclosure documents can give the buyer a huge advantage. The resale disclosure package is like a background check of the condo AND the seller. Not only can buyers learn more about the financial health of the condo homeowner’s association, but they can also learn information regarding the seller’s personal finances. For example, if the seller owes the homeowners association $1,200 in unpaid assessment fees, the buyer can expect to be responsible for those fees once he or she becomes the lawful owner if the seller doesn’t pay them off or settle with the condo association before Closing Day. This can become a bargaining chip at the negotiation table.

Consider what happens when you go to buy a car. Most car buyers know that they can request information about a vehicle’s history, such as how many repairs its needed over the years or how many accidents its been involved in. This type of information can help you decide if this purchase is right for you. It can even tell you whether you can expect to fork out more cash to keep the car running once you’re the owner. Well now compare buying a car to buying a condo, and similarities can be found. The same benefits to checking the CARFAX before buying a car can apply to a condo buyer who takes the time to read through the resale disclosure package. By reviewing the resale disclosure documents before you buy a condo, you are arming yourself with as much useful information that is available to you. Then you can make an informed decision before you’re locked into the contract.

One of the biggest investments a person will make in their entire lifetime is buying a home. Buying property is a big deal and you want to be confident in your decision. A good agent will tell you how important it is for buyers to review the resale disclosure documents when buying a condo, but the best agents will make sure you understand why it’s so important. While buyers and sellers may waive inspection, appraisal, and financing contingencies, the Condominium Resale Disclosure necessity and rescission right is not waivable. Disclosure documents are mandated by the state for a reason, and that reason is to protect condo buyers’ interests. So take advantage of the information contained in the disclosure package and arm yourself with knowledge.

The Keri Shull Team is no stranger to condo sales — we’ve worked with hundreds of condo buyers and sellers in this area over the last decade — and we want to be sure that our past, present, and future clients understand resale disclosure documents and how they can impact the sale and purchase of a condo. If you still have questions about condo resale disclosure documents or condo laws in the DMV, contact us today! We can’t wait to hear from you.