Texas Real Estate Sales Agent ExamTexas Real Estate LawMedium
A buyer client is interested in purchasing a property that is part of a Property Owners' Association (POA). The sales agent explains that the buyer has certain rights to review documents related to the POA. Which of the following documents is the buyer legally entitled to receive and review under Texas law, typically provided by the seller?
- APersonal contact information for all current board members and the property manager.
- BMeeting minutes from all POA board meetings held in the past three years.
- CA Resale Certificate (or POA Addendum) containing information about the association's current operating budget, regular assessments, and any special assessments.
- DThe POA's complete financial audit reports for the last five years.
Show answer & explanationAnswer & explanation
Correct answer: C. A Resale Certificate (or POA Addendum) containing information about the association's current operating budget, regular assessments, and any special assessments.
In Texas, sellers of properties in POAs are generally required to provide buyers with a Resale Certificate (often through a POA Addendum) which includes crucial information about the association's financial health, assessments, and other relevant details.
Why the other options are wrong
- A. Personal contact information for board members is generally not a required disclosure due to privacy concerns.
- B. Meeting minutes may be accessible, but they are not a mandatory component of the initial disclosure package (Resale Certificate) from the seller.
- D. While financial health is important, a full five-year audit report is not typically a mandatory disclosure item for a resale certificate.
POA Resale Certificate (Texas)
A document provided by a Property Owners' Association (POA) to a seller, who then provides it to a buyer, containing critical information about the association's financial status, assessments, rules, and other relevant details.
- Required disclosure for properties in POAs.
- Includes current budget, assessments, and special assessments.
- Allows buyer to understand financial obligations and rules.
- Buyer has right to terminate if not received timely.
Memory trick: POA Certificate: 'P'ower 'O'f 'A'ssessment, 'C'heck the 'C'ertificate.