Client Question of the Week: “Escrow just called me and asked for a credit card to pay for an HOA Payoff Demand. What is this and who pays for this? Is it the same as the Resale Certificate I already paid for?” – Condo Seller

Dear 'What is the HOA Demand':

HOA DocsAs a seller of a condominium there are several additional fees that you will incur that relate to ordering documents that are required in order for the sale to close. When you list your condominium you will order and pay for what is called a Resale Certificate and provide that to the potential buyer. It contains important consumer information about the association. Included in this package are copies of the association documents such as the declaration, covenants, bylaws, budget, association meeting minutes and so forth.

Once you get into a contract with a buyer, the Escrow Company will contact you to ask you to order and pay for what is typically called the HOA Payoff Demand. This report gives Escrow  payoff information in order to ensure all funds due to the HOA are collected for the property at closing. It will include funds that are owed for both the seller and buyer.  The fees can include HOA dues, late fees, fines that might be owed, transfer fees associated with the transfer of ownership within the building, move-in fees, etc..

Some HOA’s also use a third party service to provide such information to the lenders, title and escrow companies.  The fees are established by your HOA and the company they use, such as or  Sometimes there will be a rush fee if you have a short closing time frame to ensure the document arrives in time to meet the contractual closing date agreed to.

There is one last HOA document that is often required when you sell a condo and a mortgage lender is involved, that is the Lender Questionnaire, which has lender specific questions for the HOA (also called a Condo Questionnaire). If this document is required by the lender then it should be paid for by the buyer or the buyer's lender on their behalf. The key is that all of these documents need to be paid for when they are ordered. So plan ahead for that and be prepared to be asked to order and pay for the documents required. And try to order them as soon as possible as not doing so will eat up valuable time, and both the buyer and seller are obligated to close on time. 

In short, the Seller side orders and pays for the Resale Certificate and the HOA Payoff Demand. The Buyer's lender orders the Lender Questionnaire (or any other lender specific requests of the HOA) and the Buyer pays for that.

Hope this information helps sort out the fees that are usually charged for document preparation in association with selling a condo!

– Marco

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.