Selling a condo in Connecticut

A condo sale has a step a house sale does not: a third party you do not control has to produce paperwork before your buyer can safely close, and the clock on that paperwork is not yours to set.

Handled early it is a non-event. Handled late it is the reason your closing moves two weeks.

The resale certificate

Connecticut's Common Interest Ownership Act requires you, as the seller of a unit, to furnish the buyer with the governing documents — the declaration, the bylaws, the rules and regulations — plus a certificate from the association.

The certificate is not a formality. The statute specifies what has to be in it, and the list runs to nineteen items, including:

• the current assessment on your unit, and anything unpaid on it

• any other fees owed by unit owners

• planned capital expenditures over $1,000

• the state of the reserve fund

• the operating budget

• any pending litigation against the association

• the association's insurance coverage

• use restrictions

• how many other units are delinquent, and any foreclosure actions

• the effect of any right of first refusal on your sale

The association prepares it, not you. On written request and payment, it has ten business days to produce it. Expedited service runs three business days and usually costs more. The statutory fee is $185 plus copying, or $10 for electronic delivery, not counting any attorney or paralegal time the association adds.

The part that actually bites

Your buyer gets a cancellation right tied to delivery.

Once the certificate and documents are delivered, the buyer may void the contract within five days — excluding weekends and legal holidays — if delivered in person, or seven days if sent by registered or certified mail. The right ends at conveyance.

So the sequence matters. Deliver on day three and the window closes well before closing. Deliver the week of closing and you have handed your buyer a fresh exit at the worst possible moment, for reasons that have nothing to do with your unit.

Request the certificate the day you go under contract. Earlier, if you can — there is nothing stopping you ordering it while you are still preparing to list, and reading it yourself first is informative.

Read it before your buyer does

The certificate is a disclosure document about the association's financial health, and some of what is in it is unflattering.

A thin reserve fund. A special assessment coming. Litigation. A meaningful share of units delinquent on dues. Any one of those can cool a buyer, and all of them are better addressed by you, in context, than discovered by a buyer's attorney in a document dump.

If there is a special assessment approved but not yet billed, know the number and know who the contract says pays it. That is a negotiation to have at offer stage, not at the closing table.

Right of first refusal

Some Connecticut associations hold one. If yours does, the association gets a window to match your buyer's offer before the sale can proceed.

In practice it is rarely exercised. In practice it also adds time, and it is the kind of clause that surprises a seller who has never read their own declaration. Find out which you have before you accept an offer, because the answer changes your timeline.

Whether your building is financeable

This one is outside the statute and inside the lender's rulebook, and it is where condo deals quietly die.

Most buyers need a mortgage, and a lender underwrites the association as well as the borrower. Depending on the loan type, the lender looks at the share of units that are owner-occupied versus rented, how many owners are behind on dues, whether reserves are adequately funded, whether there is litigation, and whether any single owner holds too much of the building. FHA and VA maintain their own condo approval processes on top of that.

The specific thresholds move, and they differ by loan program, so the useful question is not "what is the cutoff" but "has anything in this building closed recently, and with what kind of financing." If the last three sales were cash, that is information.

A building that will not support conventional financing has a cash-and-investor buyer pool, which prices differently. Better to know that before you set an asking price than after sixty days of showings.

You still fill out the disclosure report

Condo sellers sometimes assume the Residential Property Condition Report is a house thing. It is not — the requirement covers residential property of one to four dwelling units and expressly includes condominiums and cooperatives.

Fill it out for your unit. Skipping it is a $500 credit to your buyer at closing.

The practical wrinkle is scope: you are disclosing what you know about your unit, while the roof, the siding, the windows in some associations, and the grounds are the association's responsibility. Know where that line falls in your declaration before you answer questions about them.

What to have ready before you list

• The declaration, bylaws, and rules

• The last two years of association financials and the current budget

• Minutes from recent meetings, which is where assessments appear first

• Your current assessment amount and proof you are current

• What the master insurance policy covers, and what your own policy needs to

• The association's management contact and the process for ordering the certificate

• Any pending or recently completed capital projects

That packet, assembled before the first showing, is the difference between a condo sale that runs on schedule and one that does not.

Where we fit

We list and sell condominiums across central Connecticut and have spent a long time on the financing-constrained end of the market, where whether a building is lendable is the first question rather than the last.

If you are thinking about selling a unit and want to know what your association's paperwork is going to say before a buyer reads it, we will order it and go through it with you. No cost, and no obligation to list.

Zack DeCaro is a licensed real estate broker in Connecticut and Massachusetts and an agent in Rhode Island, New York and Florida, with Property Works New England in Rocky Hill. This article is general information, not legal advice. Statutory figures and timeframes are current as described but can change, and your declaration may impose more — have your attorney review your association's documents and your contract.