Short answer
When you buy a condominium or townhome in Washington, you typically receive a resale certificate — a packet of financial and governance documents about the homeowners association. This document can run over 100 pages. Most buyers do not know what to look for. The resale certificate can reveal underfunded reserves, pending special assessments, active litigation, insurance gaps, and rental restrictions that affect both your carrying cost and your ability to finance or sell the unit in the future. Knowing what to flag before your review period expires is the difference between walking away from a risk and absorbing it.
What this document is
Washington law governs resale certificate requirements for condominiums and common interest communities. For condominium units subject to RCW 64.34 (the Washington Condominium Act), the seller must provide a resale certificate containing specific financial and governance information about the association. For properties governed by the Washington Uniform Common Interest Ownership Act (RCW 64.90, which applies to many newer communities), similar disclosure requirements apply under RCW 64.90.640.
After receiving the resale certificate, buyers typically have a review period during which they may cancel the purchase and receive their earnest money back. The length and conditions of this period depend on which statute governs the community and the specific contract terms. Buyers should confirm the review period and cancellation rights with their buyer's agent or attorney before the certificate is delivered, not after.
The association is generally required to provide the resale certificate within a set number of days after a request from the seller. The cost to prepare the certificate may be capped under Washington law; buyers should confirm the current applicable limits with their agent or legal counsel.
What a resale certificate can tell you
A well-prepared resale certificate is one of the most information-dense documents in a condo transaction. It typically includes:
Reserve fund balance and reserve study. The reserve study estimates the cost of future major repairs — roof, elevator, exterior, parking structure, windows — and assesses whether the association's reserves are adequate to cover them. A funded reserve study helps buyers understand whether the association has been saving for large future expenses or operating on a pay-as-you-go model.
Pending and approved special assessments. A special assessment is a one-time charge levied on all unit owners to cover costs that the regular dues and reserves cannot cover. A pending or approved special assessment that has not yet been collected means you would be responsible for your share after closing.
Regular assessment dues and recent dues history. Has the monthly dues amount changed significantly in recent years? Rapid increases in dues can indicate the association is playing catch-up after years of deferred maintenance or reserve depletion.
Litigation history. Is the association currently a party to any lawsuits? Litigation involving construction defects, insurance disputes, or disputes with developers is worth understanding before you buy.
Delinquency information. How many units are behind on dues? A high delinquency rate can affect the association's financial stability and, in some cases, its ability to secure favorable insurance rates or meet lender requirements.
Insurance coverage summary. Condo associations typically carry master policies covering the building structure and common elements. The certificate may indicate the type of coverage and whether it includes betterments and improvements coverage for individual units. Gaps in insurance coverage, very large deductibles, or bare minimum "bare walls" policies shift more risk to individual unit owners.
Rental restrictions. Many associations cap the number of units that can be rented at any one time. If the cap is near its limit or already at the maximum, you may be prohibited from renting the unit if you need to move before selling.
What it does not tell you
The resale certificate discloses what the association is required to disclose — and what the board is aware of. It does not capture deferred maintenance that has not been formally assessed, building conditions that were not included in the reserve study, or future costs that the board has not yet identified.
A reserve study that was completed several years ago may not reflect current construction and repair costs. Meeting minutes may not capture informal concerns that owners or management have raised.
The resale certificate is also not a physical inspection of the building or individual unit. The structural condition of the building envelope, the mechanical systems, and common element components are beyond the scope of the document review. For older condominium buildings, buyers may want to ask whether a building condition assessment or engineering report is available.
Red flags to review before your period expires
Reserve fund below industry thresholds. Reserve fund health is typically measured as the percentage of fully funded reserves. Industry guidelines — not legal mandates — suggest that reserves funded below roughly 70% present meaningful risk. Reserves funded below 30% are generally considered critically underfunded and may trigger special assessments. Buyers should review both the funding percentage and the reserve study's estimated upcoming repair schedule.
Pending or recently approved special assessment. If an assessment has been approved but not yet invoiced to owners, the buyer may be responsible for paying it after closing. The specific terms — who pays, how it is structured, whether it passes to the buyer — should be clarified before closing.
Active litigation. Ongoing lawsuits against the association, particularly construction defect claims, can affect the association's insurance rates, ability to meet lender requirements, and overall financial health. Verify the nature of any active litigation through the resale certificate and, if needed, legal counsel.
High delinquency rate. A high proportion of owners behind on dues creates a gap between the association's budget and actual cash collected. This can force the association to draw on reserves or levy assessments to cover operating expenses.
Insurance coverage gaps. If the master policy does not include improvements and betterments coverage, damage to unit interiors above the original builder-grade finishes may not be covered. This matters if the unit has been significantly upgraded.
Rental cap at or near maximum. If the association caps rentals at a percentage of total units and the cap is already met or nearly so, your ability to rent the unit may be effectively blocked. This also affects financing: some lenders place restrictions on loans in buildings where owner-occupancy falls below a threshold. Buyers should confirm financing eligibility for the specific building with their lender.
Board turnover or missing documents. Frequent changes in management, missing or incomplete meeting minutes, or a financial statement that is not current can indicate organizational instability or governance concerns.
Questions to ask before your review period expires
What is the current reserve fund balance and funding percentage, and when was the reserve study last updated? Is there a pending or approved special assessment? Are there any active lawsuits involving the association? What is the current rental cap, and how close is the building to that limit? What does the master insurance policy cover, and what is the deductible? Does the association have any known upcoming major repairs that are not reflected in the current budget?
These questions may require communication with the association or its management company. Your buyer's agent and a real estate attorney can help you interpret the answers within your review period.
Use this as a checklist with your team
If you are reviewing an HOA resale certificate:
- Note the delivery date and confirm your review period length with your agent or attorney
- Review the reserve fund balance and funding percentage
- Check for pending or approved special assessments
- Review active litigation disclosures
- Confirm the rental cap status and its effect on financing
- Ask about insurance coverage type and deductible
- Review meeting minutes for any unresolved building or financial concerns
- Confirm whether the balance sheet is current