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January/February 2012
(PDF Download)
News
New Required Changes To The Resale Disclosure Certificate
By Catherine (Trina) Sjoberg
A recent amendment to Minnesota Statutes Chapter 515B, known as the Minnesota Common Interest Ownership Act (“MCIOA”), effective August 1, 2010, has changed the required form of the Resale Disclosure Certificate to be issued by homeowners associations in connection with the resale of units in a common interest community (such as a condominium, cooperative or planned community). Since all Resale Disclosure Certificates issued by associations on and after August 1, 2010, must comply with the amendment to MCIOA, associations must make the required revisions to their Resale Disclosure Certificate form.
The amendment to MCIOA now requires the Resale Disclosure Certificate to disclose the following new information:
- The components of the common interest community which the association is obligated to replace, and the amounts held in the association’s reserves for replacement of those components.
- The components of the common interest community whose replacement is funded by assessments levied under Section 515B.3-115(e)(1) or (2) of MCIOA. Those assessments are to pay for the replacement of limited common elements, or are deemed to benefit the unit or units against which the assessments are levied (so called “benefit” assessments).
- That the Resale Disclosure Certificate is given in connection with the sale by a unit owner who is not a declarant of the common interest community, and that certain warranties under MCIOA that apply to initial unit sales by the declarant do not apply to the proposed sale. The Resale Disclosure Certificate must also state that the conveyance of the unit may result in the transfer of those warranties.
Under the amendment to MCIOA, if the unit owner requesting a Resale Disclosure Certificate from the association acquired the title to the unit from the declarant of the common interest community by one of the methods described in Section 515B.3-104 of MCIOA (which methods include, but are not limited to, mortgage foreclosure or a deed-in-lieu of foreclosure), that unit owner must indicate to the association whether the unit owner is or is not deemed to be a declarant. In certain situations, such a unit owner may become a declarant by operation of Section 515B.3-104 of MCIOA. If the unit owner is deemed to be a declarant, the unit owner may not utilize a Resale Disclosure Certificate in connection with the sale of the unit.
To obtain a copy of the new Resale Disclosure Certificate, select which format you
prefer: [PDF] [Word]
To view a blacklined version of Section 515B.4-107 of MCIOA, which includes the changes to the Resale Disclosure Certificate, click here.
To read a summary of other recent changes to MCIOA, click here.
If you have any questions regarding the new form of Resale Disclosure Certificate, please contact Trina Sjoberg at (612) 373-8536, or csjoberg@felhaber.com, or contact another member of Felhaber’s Real Estate Section.
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