What is a Tennessee resale certificate?

What is a Tennessee resale certificate?

A resale certificate is a disclosure document often prepared when a unit in a homeowners association (HOA) or condominium association (COA) is sold. It outlines financial information related specifically to the unit being sold, including assessments, outstanding balances, and delinquencies. This document is intended to inform the buyer of the seller's current financial standing with the association and any fees that may apply upon transfer of ownership.

While the resale certificate includes unit-specific financial disclosures, the resale package refers to the broader set of documents that may be required during a sale. These typically include the association’s governing documents, current budget, insurance coverage, and pending litigation. In some communities, both may be bundled together for convenience, but they serve distinct purposes.

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.
 

How to use a Tennessee resale certificate

In many communities, sellers are responsible for requesting the resale certificate from the HOA or their property management company, who then prepares the document and delivers it to the buyer. Buyers use the certificate to evaluate any financial obligations that could carry over once they take ownership. It also helps confirm that the current owner is in good standing and whether any fees may be owed at closing.

The resale package can provide buyers with a broader overview of the association’s governance, rules, operations, and budgeting. It also becomes part of the official disclosure documents that are often reviewed by legal counsel or real estate professionals before closing.
 

Do you need a resale certificate in Tennessee?

Tennessee law does not require a "resale certificate” by name for HOA or condo sales in the same way that other states do. However, many associations require resale certificates in their governing documents. Providing a resale certificate is often considered a best practice to help minimize legal disputes after the sale.

Additionally, certain disclosures may be required by state law depending on the type of property being sold:
 

Homeowners Associations (HOAs)

Under the Tennessee Residential Property Disclosure Act, sellers must disclose if a property is part of a homeowners association or planned unit development (PUD). If it is, and the buyer requests it, the seller may be required to provide:

• A copy of the development’s restrictive covenants
   
• The HOA’s bylaws
   
• The master deed, if applicable

While this isn't referred to as a “resale certificate,” these documents often form part of what would be included in a resale package.
 

Condominium associations

For some condominium associations governed under the Tennessee Condominium Act of 2008, the law requires more extensive disclosures. Sellers (or the association, upon request) must provide a set of specific documents and information, which together function similarly to a resale certificate.

These disclosures include:

• The name and address of the association, and the declarant if it’s still under declarant control
   
• The recorded master deed (or declaration), bylaws, articles of incorporation (or charter), and any amendments or exhibits
   
• The current rules and regulations of the association
   
• Financial information such as the most recent balance sheet, income statement, and approved or projected budget, including:
   
  • Any reserves for repairs and replacements and whether a reserve study exists
     
  • Annual and monthly assessments and how they are calculated
     
  • Any association debt secured by common areas or amenities
     
  • Any leases affecting shared property


• Meeting minutes from board and member meetings held in the past 24 months
   
• The current monthly and any special assessments for the unit being sold, and whether it has any unpaid balances
   
• Any fees due at the time of transfer (such as move-in or administrative fees)
   
• Any extra usage fees for common areas or amenities
   
• A statement of insurance coverage maintained by the association, including limits and deductibles
   
• A list of unsatisfied judgments and any pending lawsuits against or by the association (excluding collections)
   
• Total amount of all unpaid assessments (60+ days past due) across all units as of the most recent report
   
• Whether the board is still under declarant (developer) control, and when that ends if applicable

These disclosures are typically required to be provided within 10 business days of request, and the seller may be responsible for the cost of preparation. This can help give buyers a clear picture of the condominium’s financial health, legal status, and community rules before closing. In some cases, Tennessee law may impose stricter resale disclosure requirements. Sellers and buyers should consult their property manager, HOA board, or legal advisor to confirm what’s required for their specific community.
 

How much does a resale certificate cost?

Resale certificate fees in Tennessee can vary significantly depending on the association and property management company involved. On average, the cost typically ranges from $150 to $500, though in some cases, it may be higher. This fee generally covers the administrative work involved in gathering financial data, verifying records, and preparing the formal documentation.

It’s important to clarify during the sales process whether the fee will be paid by the seller, the buyer, or split between both parties. Most commonly, the seller covers the cost as part of their closing responsibilities, but this can sometimes be negotiated based on the terms of the sale agreement.
 

What buyers should look for in a resale certificate

When reviewing the certificate, buyers should pay attention to:

• Whether the seller is current on assessments
   
• Any upcoming special assessments that might increase monthly dues
   
• Reserve funding (indicating whether the community is financially stable)
   
• Rules that might impact personal plans — for example, leasing the unit, installing a satellite dish, or owning certain types of pets
   
• Any mention of pending litigation or unresolved violations

Buyers can work with their real estate agent or association attorney to interpret the contents of the resale certificate and decide whether additional questions should be raised with the seller or the HOA.

FirstService Residential helps HOA and COA boards in Tennessee deliver resale certificates to support easier real estate transitions for everyone involved. To learn more, contact a member of our team today.