What is a Minnesota resale certificate?

Selling a home in a Minnesota homeowners association (HOA) comes with a set of unique requirements. One of the most important documents involved in this process is the Minnesota resale certificate, or “resale disclosure certificate.” This document provides buyers with a comprehensive view of the property’s financial and legal obligations to help them make an informed decision. Whether you're selling a home or assisting as an HOA board member, understanding the role of a Minnesota resale certificate can streamline the process. Below, we’ll explore what a Minnesota resale certificate is, how to obtain one, and why it matters for both buyers and sellers.

This article is for general informational purposes only and does not constitute legal advice. Laws and regulations frequently change and may be subject to local variations. Boards should consult qualified legal counsel and work closely with their property management partner for advice specific to their Minnesota HOA.
 

What is a Minnesota resale certificate?

A Minnesota resale certificate is a formal document that provides prospective buyers with insights into a home’s financial responsibilities within an HOA. This document is included in the larger “resale package,” which also typically includes the HOA’s governing documents as well as details on upcoming capital expenditures.

By reviewing this certificate, buyers can evaluate both the broader financial stability of the community and any property-specific obligations, such as unpaid dues or upcoming assessments. In many Minnesota HOAs, governing documents outline when and how the seller must provide the resale certificate.
 

How is a Minnesota resale certificate prepared?

The preparation of a Minnesota resale certificate involves gathering key financial and governance-related details from the HOA. The Minnesota Common Interest Ownership Act (MCIOA) sets disclosure requirements for most modern HOAs. The MCIOA applies to most HOAs and condo associations formed on or after June 1, 1994. However, some pre-1994 associations may have opted into MCIOA, while others remain governed by their original governing documents. The HOA, or its property management company, compiles the resale certificate based on current records and financial data.

A resale certificate typically includes:

• Current monthly dues, special assessments, and any unpaid fees that remain due on the unit.
   
• The HOA’s most recent financial statements, reserve fund balance, and annual budget.
   
• Any known violations or issues that could affect the unit’s standing within the association.
   
• A summary of the association’s insurance policies, including what portions of the property are covered.
   
• Information on any pending or current lawsuits involving the HOA that could affect the property or community.

The overall resale package also typically includes a copy of the HOA’s governing documents (declaration, bylaws, and policies) as well as details on upcoming capital expenditures. HOAs or their property management teams must verify that all financial and regulatory details are current and accurate. Some older HOAs may not be governed by the MCIOA, so it’s essential to consult legal counsel before starting this process.
 

How much do resale certificates cost?

While the exact amount can vary, it is common to see fees ranging anywhere from $200 to $500 or more, depending on the complexity of the community’s records and whether the association is self-managed or professionally managed. Unlike some other states, there is no explicit statutory cap on how much an HOA or management company can charge for preparing and delivering a resale certificate. Instead, the MCIOA generally requires that any fees be reasonable.

Whether the seller or the buyer is responsible for paying this fee is usually negotiated in the purchase agreement. Some sellers opt to cover the fee to smooth the transaction, while others pass it on to the buyer. Regardless, it’s best to clarify the allocation of costs early in the process.
 

How to get a Minnesota resale certificate

Sellers in an HOA community usually request a resale certificate directly from the association or through its property management company. The process typically follows these steps:

1. Submit a formal request: The seller or their real estate agent contacts the HOA or management company, specifying the property details and any deadlines for receiving the certificate.
    
2. Processing and preparation: The HOA or its property management partner compiles the necessary financial, legal, and governance information.
    
3. Payment of fees: The seller usually pays the required fee before the resale certificate is released.
    
4. Delivery of the certificate: Once completed, the document is provided to the seller, who then shares it with the buyer as part of the closing process.

At FirstService Residential, we streamline the resale certificate request process, making it easy for sellers to obtain the necessary documents without unnecessary delays.
 

Can a buyer cancel after receiving the resale certificate?

Yes. Under the MCIOA, buyers usually have up to 10 days to review the resale certificate and decide if they want to cancel the purchase (in some cases, the purchase contract may specify a different period of time if both parties agree). If the buyer discovers unexpected fees, legal challenges, or other deal-breakers, they may be able to cancel the sale within that window without penalty, provided they follow the cancellation procedures outlined in their contract.

Consulting with an attorney or an experienced property management company familiar with Minnesota HOAs is essential to carrying out the process clearly and fairly.
 

How FirstService Residential can help

Navigating the complexities of real estate transactions within an HOA requires the right expertise. As the leading property management company in Minnesota, FirstService Residential works closely with HOAs to manage essential administrative tasks, including the preparation and distribution of resale certificates.

Our team is committed to supporting HOAs, board members, and homeowners by providing:

• Accurate and timely resale certificates to prevent delays in property sales.
   
• Comprehensive financial reporting that helps owners and prospective buyers understand their obligations.
   
• Expert guidance on Minnesota HOA regulations to help maintain compliance.
   
• Streamlined communication tools for requesting and receiving documents from the HOA.

With years of experience managing communities throughout Minnesota, we understand the importance of transparent and well-organized documentation in real estate transactions. Whether you’re a seller needing a resale certificate, a buyer seeking clarity on HOA fees, or a board member responsible for compliance, FirstService Residential is here to assist.

If you need assistance with your resale certificate or have questions about HOA property management in Minnesota, contact our team today.