Texas Resale Certificate for Property Subject to Mandatory Membership in an Owners' Association
Definition and meaning
The Texas Resale Certificate for Property Subject to Mandatory Membership in an Owners' Association is a document that provides essential information regarding a property's association fees and assessments. It is primarily used during the sale of real estate that is part of a homeowners’ association (HOA). This certificate assures potential buyers about the financial status of the association, any outstanding dues, and if there are any pending legal matters affecting the association.
How to complete a form
Completing the Texas Resale Certificate involves the following steps:
- Fill in the property’s street address, city, and county.
- Indicate whether the association maintains a right of first refusal.
- Provide details of current regular and special assessments.
- State the amount owed by the current property owner to the association.
- List any approved capital expenditures.
- Disclose any pending lawsuits or unsatisfied judgments against the association.
- Include the association transfer fee.
Ensure the form is completed no more than 90 days before it is delivered to the buyer.
Who should use this form
This form is primarily used by sellers of properties that are part of an owners' association, real estate agents representing those sellers, and the board members of the association. Additionally, potential buyers of such properties should review this certificate to understand the financial obligations associated with the property they intend to purchase.
Key components of the form
The Texas Resale Certificate contains several critical elements including:
- Association's right of first refusal
- Current regular and special assessment amounts
- Total outstanding dues
- Approved future capital expenditures
- Pending legal actions against the association
- Information regarding insurance coverage provided by the association
These components are essential for buyers to make informed decisions regarding their potential investment.
Common mistakes to avoid when using this form
When completing the Texas Resale Certificate, it is crucial to avoid the following mistakes:
- Failing to update information if the form is not completed within the 90-day requirement.
- Omitting details regarding any outstanding dues or pending lawsuits.
- Incorrectly stating the amounts for assessments or capital expenditures.
- Neglecting to check all relevant attachment boxes.
Double-checking your entries can prevent future disputes and facilitate a smoother transaction.
What documents you may need alongside this one
Along with the Texas Resale Certificate, you may need to provide various documents such as:
- Articles of Incorporation
- By-Laws of the association
- Balance Sheets
- Operating Budgets
- Restrictive Covenants
- Rules and Regulations
These documents will provide further clarity and transparency about the association's governance and financial standing.
Form popularity
FAQ
In Texas, unlike in other states, resale certificates and sales tax permits are not interchangeable.You can also generally use a Texas resale certificate if you intend to buy items and then resell them across the border in Mexico.
You can apply for a Texas seller's permit online through the Texas Online Tax Registration Application or by filling out the Texas Application for Sales and Use Tax Permit (Form AP-201) and mailing it to the comptroller's office at the address listed on the form.
Why are resale certificates required? A taxable item that is purchased for resale is exempt from sales or use tax if the seller accepts a properly completed Form 01-339, Texas Sales and Use Tax Resale Certificate (PDF), instead of collecting the sales tax due.
4. How much does it cost to apply for a sales tax permit in Texas? It's free to apply for a Texas sales tax permit. A bond may be required but only after the application is filed and reviewed.