2006 Code of Virginia § 55-79.97 - Resale by purchaser

55-79.97. Resale by purchaser.

A. In the event of any resale of a condominium unit by a unit owner otherthan the declarant, and subject to the provisions of subsection J and 55-79.87 A, the unit owner shall disclose in the contract that (i) the unitis located within a development which is subject to the Condominium Act, (ii)the Act requires the seller to obtain from the unit owners' association aresale certificate and provide it to the purchaser, (iii) the purchaser maycancel the contract within three days after receiving the resale certificate,(iv) the purchaser has a right to request an update of the resale certificatein accordance with subsection D, and (v) the right to receive the resalecertificate and the right to cancel the contract are waived conclusively ifnot exercised before settlement.

B. If the contract does not contain the disclosure required by subsection A,the purchaser's sole remedy is to cancel the contract prior to settlement.

C. The information contained in the resale certificate shall be current as ofa date specified on the resale certificate. The purchaser may cancel thecontract (i) within three days after the date of the contract, if thepurchaser receives the resale certificate on or before the date that thepurchaser signs the contract; (ii) within three days after receiving theresale certificate if the resale certificate is hand delivered or deliveredwith the consent of the purchaser by electronic means and a receipt obtained;or (iii) within six days after the postmark date if the resale certificate issent to the purchaser by United States mail. Notice of cancellation shall behand delivered or sent by United States mail, return receipt requested, tothe unit owner selling the unit or his agent. Such cancellation shall bewithout penalty, and the unit owner shall cause any deposit to be returnedpromptly to the purchaser. The unit owners' association may also send theresale certificate by electronic means with the consent of the seller and thepurchaser.

A resale certificate shall include the following:

1. An appropriate statement pursuant to subsection H of 55-79.84 which neednot be notarized and, if applicable, an appropriate statement pursuant to 55-79.85;

2. A statement of any expenditure of funds approved by the unit owners'association or the executive organ which shall require an assessment inaddition to the regular assessment during the current or the immediatelysucceeding fiscal year;

3. A statement, including the amount, of all assessments and any other feesor charges currently imposed by the unit owners' association and associatedwith the purchase, disposition and maintenance of the condominium unit andthe use of the common elements, and the status of the account;

4. A statement whether there is any other entity or facility to which theunit owner may be liable for fees or other charges;

5. The current reserve study report or a summary thereof, a statement of thestatus and amount of any reserve or replacement fund and any portion of thefund designated for any specified project by the executive organ;

6. A copy of the unit owners' association's current budget or a summarythereof prepared by the unit owners' association and a copy of the statementof its financial condition for the last fiscal year for which a statement isavailable;

7. A statement of the nature and status of any pending suits or unpaidjudgments to which the unit owners' association is a party which either couldor would have a material impact on the association or the unit owners orwhich relates to the unit being purchased;

8. A statement setting forth what insurance coverage is provided for all unitowners by the unit owners' association, including any fidelity bondmaintained by the unit owners' association, and what additional insurancecoverage would normally be secured by each individual unit owner;

9. A statement that any improvements or alterations made to the unit, or thelimited common elements assigned thereto, by the prior unit owner are not inviolation of the condominium instruments;

10. A copy of the current bylaws, rules and regulations and architecturalguidelines adopted by the unit owners' association and the amendments thereto;

11. A statement of whether the condominium or any portion thereof is locatedwithin a development subject to the Property Owners' Association Act (55-508 et seq.) of Chapter 26 of this title;

12. A copy of the notice given to the unit owner by the unit owners'association of any current or pending rule or architectural violation;

13. Certification, if applicable, that the association has filed with theReal Estate Board the annual report required by 55-79.93:1; whichcertification shall indicate the filing number assigned by the Real EstateBoard and the expiration date of such filing; and

14. A statement of any limitation on the number of persons who may occupy aunit as a dwelling.

Failure to receive copies of such documents shall not excuse any failure tocomply with the provisions thereof.

The resale certificate, once received by the owner from the unit owners'association, shall be delivered by the owner to the purchaser. The unitowners' association shall have no obligation to deliver the resalecertificate to the purchaser of the unit. The resale certificate shall not,in and of itself, be deemed a security within the meaning of 13.1-501.

D. The purchaser may submit a copy of the contract to the unit owners'association with a request for assurance that statements previously furnishedpursuant to subsection C remain materially unchanged, or, if there have beenmaterial changes, a statement specifying such changes. The purchaser shall beprovided with such assurances or such statement within ten days of thereceipt of such request by the unit owners' association. The purchaser may berequired to pay the same fee charged a unit owner for the resale certificate,if any. Any fee shall reflect the actual cost incurred by the unit owners'association in providing the assurances, but shall not exceed $0.10 per pagein copying costs or a total of $50 for all costs incurred in updating theresale certificate. The unit owners' association may also collect from thepurchaser the actual costs incurred of any mailing or delivery requested bythe purchaser pursuant to this subsection. In no event, however, shall theunit owners' association require reimbursement of any costs not expresslyauthorized in this subsection. Nor shall the unit owners' association chargeany other fee for the preparation or issuance of such resale certificate ormaking such certificate available by electronic means except as expresslyprovided in this subsection.

E. In the absence of a written agreement to the contrary, the failure of theunit owners' association to provide the statement required by subsection D orthe disclosure by such statement that there have been one or more materialchanges shall render the purchase contract void at the option of thepurchaser.

F. The unit owners' association shall furnish the resale certificate upon thewritten request of any unit owner within 14 days of the receipt of suchrequest. Payment of the actual costs of preparing the resale certificate maybe required of the unit owner requesting it as a prerequisite to itsissuance, but the total fee shall not exceed $0.10 per page in copying costsor a total of $100, including and not in addition to, any fee chargedpursuant to subsection H of 55-79.84 and 55-79.85, for all costs incurredin preparing the resale certificate, except that the unit owners'association, upon mutual agreement with the seller, may collect for actualcosts incurred, in addition to any fee charged pursuant to this subsection(i) a rush fee, not to exceed $25, for furnishing the resale certificatewithin three business days from the actual receipt of the request; (ii) theactual cost of any mailing or delivery requested by the seller pursuant tothis subsection; and (iii) any actual cost incurred at the request and withthe consent of the purchaser. Neither the unit owners' association nor itsmanagement agent, if any, shall require cash or certified funds unless theunit owner is delinquent in any payments due to the unit owners' associationin excess of 30 days or if a check of the unit owner made payable to the unitowners' association was returned for insufficient funds within the last sixmonths. In no event, however, shall the unit owners' association requirereimbursement of any costs not expressly authorized in this subsection. Norshall the unit owners' association charge any other fee for the preparationor issuance of such resale certificate or making such certificate availableby electronic means except as expressly provided in this subsection.

G. When a resale certificate has been issued as required by this section, theunit owners' association shall, as to the purchaser, be bound by thestatements set forth therein as to the status of the assessment account andthe status of the unit with respect to any violation of the condominiuminstruments as of the date of the resale certificate unless the purchaser hadactual knowledge that the contents of the resale certificate were in error.

H. If the unit owners' association has been requested to furnish the resalecertificate required by this section and has been paid the appropriate fee,its failure to provide the resale certificate in substantially the formprovided herein within fourteen days from the actual receipt of the requestby an officer, director or agent of the unit owners' association shall bedeemed a waiver of any claim for delinquent assessments or of any violationof the condominium instruments, rules and regulations, or architecturalguidelines existing as of the date of the request with respect to the subjectunit. The unit owners' association shall be liable to the seller in an amountequal to the actual damages sustained by the seller in an amount not toexceed $500. The purchaser shall nevertheless be obligated to abide by thecondominium instruments, rules and regulations, and architectural guidelinesof the unit owners' association as to all matters arising after the date ofthe settlement of the sale. The settlement agent, as defined in 6.1-2.20,when transmitting funds to a unit owners' association or otherwise uponrequest, shall provide the unit owners' association with (i) the name of theseller, (ii) the name and address of the purchaser, (iii) the address of thesubject property, (iv) the date of settlement, and (v) a brief explanation ofthe application of any funds transmitted. Providing a copy of the HUD-1settlement statement, unless otherwise prohibited, shall satisfy theserequirements.

I. Subject to the provisions of 55-79.87, but notwithstanding any otherprovisions of this chapter, the provisions and requirements of this sectionshall apply to any such resale of a condominium unit created under theprovisions of the Horizontal Property Act ( 55-79.1 et seq.).

J. The resale certificate required by this section need not be provided inthe case of:

1. A disposition of a unit by gift;

2. A disposition of a unit pursuant to court order if the court so directs; or

3. A disposition of a unit by foreclosure or deed in lieu of foreclosure.

K. In any transaction in which a resale certificate is required and a trusteeacts as the seller in the sale or resale of a unit, the trustee shall obtainthe resale certificate from the unit owners' association and provide theresale certificate to the purchaser.

(1974, c. 416; 1975, c. 415; 1978, cc. 234, 290; 1983, c. 60; 1984, cc. 29,103; 1990, c. 662; 1991, c. 497; 1994, c. 172; 1997, c. 222; 1998, cc. 32,454, 463; 1999, c. 263; 2001, c. 556; 2002, cc. 459, 509; 2005, c. 415.)