People often call it a resale certificate. The statute itself, RSA 356-B:58, just says that on any resale by someone other than the declarant, the prospective buyer is entitled to obtain certain statements from the unit owners' association before the contract date. The principal officer, or another officer the condominium documents name, has 10 days from a written request to provide them.
The full list
Here is the list in close paraphrase. The four items about reserves are set in bold, with what each one means for a board alongside.
RSA 356-B:58, I
Resale by purchaser
On a resale by anyone other than the declarant, the prospective buyer may obtain from the unit owners' association:
- (a)
Statements under RSA 356-B:46, VIII (unpaid assessments on the unit) and, where it applies, 356-B:47
What the seller still owes the association.
- (b)
Any capital expenditures and major maintenance expenditures the association anticipates in the current or next 2 fiscal years
The roofs, paving or siding the board expects to pay for soon. A current reserve study is where this list usually comes from.
- (c)
The status and amount of any reserve for the major maintenance or replacement fund, and any portion the board has earmarked for a specified project
How much is in the reserve today, and whether some of it is already spoken for.
- (d)
The income statement and balance sheet for the last fiscal year for which one is available
Shows whether reserve contributions were actually made last year.
- (e)
Pending suits or judgments in which the association is a defendant
A large claim can drain reserves.
- (f)
The insurance the association carries for all owners, and the cover an owner would normally add
Where the master policy stops.
- (g)
That alterations the seller made to the unit or its limited common area are not known to break the condominium instruments
No surprises left behind.
- (h)
A copy of the declaration, bylaws and any formal rules
These may set reserve rules of their own.
- (i)
Monthly and annual fees, and any special assessments made in the last 3 years
Repeated special assessments often mean reserves have run short.
II. The principal officer, or another officer the condominium instruments name, must furnish these within 10 days of a written request.
Item (b): spending in the next two years
The association must state any capital expenditures and major maintenance it anticipates in the current fiscal year and the two after it. A buyer reads this as "what big bills are coming". A board answers it best from a reserve study's year-by-year schedule, which already lists each component, its remaining life and its expected cost.
Item (c): the reserve balance
The association states the status and amount of any reserve for major maintenance or replacement, and any part of it the board has earmarked for a particular project. The balance on its own says little. A buyer's agent who knows the business will ask what the balance is measured against, and the usual answer is the fully funded balance from a study.
Item (d): last year's financial statements
The income statement and balance sheet for the last fiscal year available show whether reserve contributions in the budget were actually transferred, and whether reserves were borrowed for operating costs.
Item (i): fees and special assessments
Monthly and annual fees, and every special assessment in the last three years. A run of special assessments is the clearest sign to a buyer that the reserve plan has not kept up.
What the statute does not require
RSA 356-B:58 does not require the association to have a reserve study, to share one, or to fund reserves to any level. It asks the association to disclose what it has. Your declaration or bylaws may say more, and a buyer's lender may ask its own questions. For anything beyond the statute, check with the association's attorney.
Getting ready to answer
- Keep the latest reserve study and its funding plan where the officer who answers these requests can find them.
- Make sure the budget summary under RSA 356-B:40-c and the resale statements use the same reserve figures.
- If your study is more than a few years old, an update with a site visit brings item (b) back in line with what the buildings actually need.