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Homeowner Association changes in Texas You Need to Know!

Anyone that has listed or sold a property that is located in a subdivision with a Homeowner’s Association (HOA), has run in to the issue of the Resale Certificate.  Due to the many problems incurred in this form, changes have been made to the law governing HOA resale certificates and will become effective January 1, 2012.

As of January 1st, a homebuyer purchasing a property in a subdivision with an HOA will have the ability to request a resale certificate directly from the homeowners association. Under the new law, the association may require the buyer to show a valid contract for the property. Also, the HOA may require payment before beginning work on the resale certificate; however, the association is prohibited from processing the payment until the resale certificate is prepared and may not charge a fee at all if the certificate is not provided timely.

All representatives to the transaction should be aware that for contracts entered into on or after Jan. 1st, buyers will be required to pay the fee for the resale certificate unless the buyer and seller have negotiated otherwise. Currently, the TREC addendum provides options for delivery of the resale certificate and states the seller will pay for it. That addendum is still current, but is likely to be amended next year to reflect the change in law. The law still allows sellers, seller's agents, and title and insurance companies to order updates to already issued resale certificates. But under the new law, a resale certificate is only good for 60 days. For any resale certificate older than that, a new one will have to be issued.


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Click here to go to the TREC website (Texas Real Estate Commission)