Condominium Purchaser Information Requests
July 22, 2013
Recently, we discussed required disclosures related to the sale of a home and a condominium unit. Such required disclosures are governed by Tenn. Code § 66-5-213(b). Outside of these required disclosures, a purchaser of a condominium unit may request additional information from the condominium association. It should be noted that the previously discussed information is required. The information that is the subject of this post may be requested by the purchaser of the unit. Therefore, if the purchaser does not request the information, it need not be provided.
Pursuant to Tenn. Code § 66-27-202(a), certain sections of the Tennessee Condominium Act of 2008, Tenn. Code § 66-27-101, et seq., apply to all condominiums in Tennessee as to matters that occur after January 1, 2009. One of the statutes that applies to all condominiums is Tenn. Code § 66-27-502. Tenn. Code § 66-27-502(a) provides that upon a request from a purchaser the Association shall provide certain statutorily required information within ten (10) business days following the Association’s receipt of the receipt of the request. The information that may be requested is enumerated in Tenn. Code § 66-27-503 and includes: (i) a copy of the rules and regulations; (ii) the most recent balance sheet, income statement, and approved budget for the Association; (iii) a statement of reserves; (iv) the projected aggregate common expenses assessment by category of expenditures; (v) a description of any indebtedness secured by the common elements or other amenities owned by the Association; (vi) a description of any lease affecting the common elements or amenities; (vii) minutes of meetings of the members and board of directors for the past twenty-four (24) month period; (viii) current assessments due on the unit; (ix) a statement of insurance coverage for the Association; (x) a statement of any unsatisfied judgments or any pending suits against the Association; (xi) whether the Association is still under declarant control; and (xii) the total amount of current assessments for all units more than sixty (60) days past due as of the most recent report. As you can see, this is a much more comprehensive report than what is required pursuant to Tenn. Code § 66-5-213(b). This information provides the purchaser valuable financial information about the health of the Association.
Again, it should be noted that this information is not available to purchasers of homes in homeowners associations as they are not covered by the Tennessee Condominium Act of 2008. A purchaser, and certain other parties, of a condominium may request this information of an Association. To our knowledge, this right is not being exercised to any major degree. Presumably, a contract could be made contingent upon a purchaser’s review of and satisfaction with this material.
It should be noted that the Association is entitled to charge a reasonable fee for providing such information.
Tags: association, condo, condominium, condominium association, condominium unit, HOA, homeowner, homeowner association, homeowners, Horizontal Property Act, purchaser, residential property disclosures, Tenn. Code 66-5-213(b), Tennessee Condominium Act