What Is a Resale Certificate in Washington State?

A resale certificate is a disclosure packet about an association and the property a buyer is considering. For a Washington condo purchase, it helps you look beyond the unit itself to the association’s finances, rules, insurance, legal issues and plans for maintaining the building. Requirements depend on the law governing the community and any applicable exceptions.

The biggest challenge The Madrona Group sees is knowing where to start. There can be a lot of information, and an unfamiliar financial statement or reserve study can make the packet feel overwhelming. The goal is to turn those documents into practical questions: What work is coming? How will it be paid for? Can this building qualify for the financing and insurance you need?

Start With Reserves, Upcoming Work and the Funding Plan

Cash reserves are one of The Madrona Group’s first review priorities. But the balance alone does not tell the whole story. It needs to be considered alongside the development’s maintenance needs, planned contributions and projected expenses. A reserve account can look substantial until you compare it with the next roof or siding project.

The Madrona Group pays particular attention to roofs, windows, siding, fences and other major shared components. Which projects are approaching? Has the association approved work? Does it have funds available, or could the owners face another bill? Those questions help a buyer understand the financial commitment beyond the purchase price and monthly dues.

Review the current reserve study, budget, available financial statements and meeting records together. If they appear inconsistent, ask the association or its manager for clarification. Do not treat the absence of an approved assessment as proof that no expensive work is approaching.

We also ask how many owners are current on their HOA dues, how much is overdue and whether delinquency is increasing. A budget assumes money will actually be collected. If a substantial share of owners are behind, we want to understand why and how that affects the association’s ability to pay bills and fund reserves. Simply having a majority of owners current is not enough to establish financial health or lender eligibility.

A Five-Year Projection Is Not the Same as an Assessment

When The Madrona Group reviews the near-term outlook, our team wants buyers to look at what the next several years could bring. A five-year view can help you spot a cluster of upcoming projects. It is a useful review horizon, not a promise that every association supplies a document called a “five-year assessment.”

Reserve studies can look much further ahead. RCW 64.90.550, for example, calls for thirty-year reserve projections. The estimates depend on assumptions about useful life, replacement costs, inflation and funding.

Keep three things separate: an estimated future expense, a proposed funding approach, and an assessment that has actually been approved or levied. Ask which category a number belongs to before treating it as either a definite bill or an expense that has already been covered. Estimates can change, and a projection is not a guarantee against future assessments.

Insurance Needs Its Own Review

The Madrona Group also wants buyers to understand the building’s insurance situation early, particularly when they need financing. Association coverage and the coverage a unit owner needs are separate questions. Have the lender and an insurance professional review the relevant documents and explain any gaps, deductibles, exclusions or additional coverage requirements.

Do not assume that a certificate showing an insurance policy means the project satisfies a particular lender’s requirements. Fannie Mae’s full-review guidance makes the lender responsible for verifying applicable project insurance requirements. The answer for your loan needs to come from the lender reviewing that project and program.

First clarify the actual problem: no active master policy, inadequate coverage, a high deductible and a denied claim are different situations. Fannie Mae’s master property insurance requirements require coverage for applicable condo projects. Do not assume that another lender can finance a building without insurance. Ask that lender to review the actual policy and confirm the requirements of the proposed loan, and have an insurance professional explain the buyer’s remaining exposure.

If There Is Litigation, Find Out What It Means

A lawsuit deserves more than a quick note that the association is “in litigation.” The Madrona Group wants buyers to understand what the dispute concerns, where it stands and whether it has settled. Ask for current association disclosures and available updates, then have an attorney explain legal issues you do not understand.

Also ask how the underlying repair work, legal costs and any insurance coverage dispute could affect owners. A claim seeking reimbursement is not the same as money already collected. An optimistic view of a case should not be treated as a guaranteed recovery or a guarantee that owners will owe nothing.

Financing can be affected, too. Fannie Mae’s project-eligibility guidance addresses litigation and construction defects, including limited circumstances for minor matters. A lender must evaluate the facts. A buyer’s strong income and credit do not by themselves establish that the building is eligible for that loan.

A Condo Sale Made More Difficult by Stucco Litigation

The Madrona Group helped sell a condo in a building involved in litigation over peeling stucco. Insurance claims had been pursued, coverage had been denied, and the dispute was still unresolved. Most lenders they approached were unwilling to finance a purchase in the building.

The team located a lender willing to consider financing there. They disclosed the litigation situation to prospective buyers, explained the status as they understood it, and shared the lender’s contact information. Finding a possible financing path helped, but the unresolved dispute still had to be part of the buyer’s decision.

Ultimately, they found a buyer willing to accept the disclosed risks and proceed with that lender. The sale moved forward. That is the confirmed transaction outcome. It does not establish that the association later won its case, that insurance paid, or that owners avoided additional costs.

The practical lesson is to investigate the building early. A possible lender is useful information, not a substitute for legal review or a promise of loan approval. Buyers still need to decide whether the risks fit their finances and comfort level.

What Else Should Buyers Read?

Alongside those priorities, review dues, unpaid or levied assessments affecting the unit, use restrictions, rental rules, the declaration, bylaws and other applicable governing documents. Ask for missing records and written answers to important questions. What is included or required varies with the governing law; RCW 64.90.640 and RCW 64.34.425 describe resale-certificate requirements under their respective chapters.

Meeting minutes can reveal what owners and the board are worried about before a project becomes an approved assessment. Look for recurring maintenance complaints, planned work, insurance discussions and unresolved funding questions. Read these alongside the financial documents rather than treating each record as a separate checklist item.

The declaration, often called the CC&Rs, and the current rules also need to fit the buyer’s life. Check rental restrictions and pet rules, including permitted animals, number limits and any size or weight restrictions. Get clarification on anything that affects how you intend to use the home.

When We Would Pause and Reconsider

Litigation, major upcoming work with weak reserves, widespread unpaid dues or an insurance problem would make The Madrona Group pause and investigate. That does not mean every concern automatically ends the purchase. We want to understand the likely cost, timing, uncertainty and financing impact before helping the buyer weigh the options.

Does the price already reflect an upcoming assessment or the building’s financial problems? Is there room to negotiate the price or who pays an assessment? Those can be useful discussions, but a discount does not repair the building, restore insurance or put a ceiling on future costs. The buyer still needs to be comfortable with the remaining risk and able to afford it.

Think About Reselling Before You Buy

In our experience, resale packets often prompt questions or change the negotiation. They can also strengthen a buyer’s confidence when reserves, funding projections, completed work and association records tell a consistent story. A newer building or a recently completed project still deserves the same careful review.

A building with limited financing options may be harder to sell later. Finding one lender willing to consider a purchase today does not mean that lender will still offer financing when you sell. If available programs disappear and no replacement financing is available, the next buyer may need cash. A lower purchase price today should be weighed against that potential resale limitation, along with the underlying insurance or building problem.

Confirm the Review Deadline Before You Rely on It

Do not assume every Washington transaction has the same five-day clock. RCW 64.90.640 provides a five-business-day cancellation framework and addresses receipt before signing, receipt shortly before closing and notice delivery. RCW 64.34.425 uses a different provision referring to five days after the certificate is provided or conveyance, whichever occurs first.

Have your broker or attorney identify the governing law, receipt date, signed contract terms and actual deadline. Review rights can be affected by when the packet was first provided. Do not assume that requesting clarification pauses the clock, or that the inspection contingency and resale-certificate review are interchangeable.

Ordering, Preparation Fees and Seller Planning

The seller or unit owner generally requests the certificate from the association or its authorized manager. Both cited resale-certificate statutes provide a ten-day response requirement after an owner’s request and cap the reasonable preparation charge at $275. Confirm which law applies and ask for an itemized explanation of any other requested charge instead of relying on a broad “typical fee” estimate.

Address the request and the document timeline early in the sale plan. A packet delivered late can complicate the buyer’s review and the lender’s project review. If closing moves or material information changes, ask whether an update is needed. Planning ahead helps identify issues; it does not guarantee a quick approval or eliminate the buyer’s review rights.

A Resale Certificate and an HOA Review Clause Have Different Roles

The resale certificate is a statutory disclosure when required by the law governing the property. A contractual HOA review clause is a protection created by the terms the parties sign. They may overlap, but one should not be assumed to replace the other. Nor should buyers assume that only a property marketed as a condo can have resale-certificate requirements under Washington’s common-interest-community laws.

For the separate contract-focused explanation, see the HOA review period. For this packet, The Madrona Group’s priority is helping buyers sort through the information and identify questions that need answers from the association, lender, insurer or attorney before making their decision.

Questions About a Condo You Are Considering?

Bring the resale packet and your questions to The Madrona Group. We can help you organize the real estate questions and coordinate the next steps, while your lender, insurance professional and attorney address matters within their expertise.

Frequently Asked Questions