Tuesday May 20, 2025
What is a resale certificate in a Georgia HOA?
A resale certificate, also known as a “closing letter” or “estoppel” in Georgia, is a document that provides specific, up-to-date information about a property’s financial standing within a homeowners association (HOA). It may include information on whether the current owner is paid up on all regular and special assessments, and can list any past-due HOA fees, unpaid assessments, or charges owed. It typically also notes any pending violations or fines on the property, and any fees that must be paid upon closing.
The purpose of the Georgia resale certificate is to help protect all parties — the seller may disclose their financial obligations to the HOA, the buyer may be alerted to any debts or issues they might inherit, and the HOA may use it to help secure payment of any outstanding amounts before the property changes hands. If a seller has unpaid dues, those could become the buyer’s responsibility after closing, so the resale certificate can help prevent unpleasant surprises and potentially reduce financial risk for the HOA and the buyer.This article is not intended to and does not constitute legal advice or create an attorney-client relationship. Board members should consult their association’s attorney to discuss the legal implications of their decisions or actions prior to proceeding.
Resale certificate vs. resale package
The resale package (also called an HOA disclosure package) is a bundle of documents provided in connection with the sale of a property in an HOA. The resale package usually includes two main parts: (1) the resale certificate and (2) the association’s governing documents and other disclosures. The resale certificate is just one document — albeit a critical one — within that package.While the Georgia resale certificate may include outstanding dues, fees, violations, special assessments, and key financial information about the unit or lot, the resale package usually contains foundational HOA documents and records a buyer should review. In Georgia, this often means providing the declaration and all amendments thereto (CC&Rs or master deed), the bylaws, the articles of incorporation, the current rules and regulations of the association and current information about the board of the association. Financial statements, including the annual budget and any available reserve study, might be included as well. Essentially, the full package gives the buyer a more complete picture of the community they are buying into — both the rules they’ll need to follow and the financial obligations and condition of the HOA.
How do I get a resale certificate in Georgia?
In Georgia, the resale certificate (or “closing letter”) is usually requested and paid for by the seller once a contract for sale is in place, because the seller is typically responsible for providing these documents to the buyer.In Georgia HOA transactions, the resale package (including the resale certificate) is generally prepared by the HOA’s management company or, in self-managed associations, by the board or treasurer. The management company handles the association’s accounts and records, so it is often in the best position to compile the up-to-date information required for the certificate. They will typically fill out the standardized form or letter that becomes the resale certificate, stating the account balance, fees due, etc., as a service to the HOA. If the community is self-managed, then a board member or officer will need to gather the information and complete the certificate.
Fees for resale certificates and who pays
The average cost of an HOA resale certificate in Georgia can range from $100 to $450. The exact amount depends on the management company and what documents are included. In most cases, the seller is responsible for paying the resale certificate fee. The rationale is that this is part of the seller’s obligation to deliver clear title (including clearing any HOA debt) and to provide necessary disclosures to the buyer. A qualified attorney can review your purchase agreement or applicable governing documents to determine who’s responsible for paying the resale certificate fee in your specific situation.Is a resale certificate the same as a sales tax registration in Georgia?
No, an HOA resale certificate and a sales tax registration in Georgia are not the same thing. An HOA resale certificate is used during a real estate transaction and provides information about a property located in a homeowners association, such as fees owed and community rules. On the other hand, a sales tax registration is issued by the Georgia Department of Revenue and is required for businesses that sell taxable goods or services. While the resale certificate is related to property sales, the sales tax registration is strictly for business and tax purposes. Somewhat confusingly, a business may be required to provide a tax “resale certificate” from the Georgia Department of Revenue in connection with the sale of the business, which is different than the HOA resale certificate discussed in this article.Does Georgia require a sales tax registration to sell your home in an HOA?
Georgia does not usually require individual property owners or homeowners to obtain a "sales tax registration" or a “tax resale certificate” from the Georgia Department of Revenue when selling their home. In real estate transactions, sellers are not typically engaged in the type of taxable commercial activity that would necessitate a sales tax permit.However, Georgia does require businesses that sell tangible personal property to obtain a sales and use tax number. This is managed through the Georgia Tax Center of the Georgia Department of Revenue.
Is a resale certificate the same as an EIN?
No. An Employer Identification Number (EIN) is a federal tax ID number issued by the Internal Revenue Service (IRS) for businesses. It’s a unique nine-digit number assigned by the IRS to identify a business entity for tax purposes. HOAs, condo associations, and co-ops typically have EINs because they operate as nonprofit corporations that file tax returns and open bank accounts.Sometimes people mistakenly refer to tax documents colloquially and might wonder if an “EIN” or some tax certificate is needed in a sale — it is not. An HOA resale certificate is not an EIN or any kind of IRS form.
If you have questions about Georgia resale certificates or want to strengthen your association’s resale process, we’re here to help. Contact our team today to learn how our property management solutions can support your community’s needs.