"Buying a Resale Condo in Maine: What Does the Resale Certificate Have to Show Me, and How Do I Use the Five Days?"

The management company's email lands two days after your offer on a condo in South Portland is accepted. The attachment runs thirty-one pages. A balance sheet, this year's budget, a page on the reserve account, a summary of the master insurance policy, and one line noting that the association is a defendant in a suit over the parking structure. That packet is the resale certificate, and in Maine its arrival starts a clock that runs in your favor.

Under 33 M.R.S. § 1604-108, the seller of a Maine resale condo has to give you the declaration, the bylaws, the rules and a reasonably current resale certificate from the association. It covers the association's assessments, fees, budget, reserves, financial statements, lawsuits, insurance and code violations. Once that certificate is delivered, you have five days in which you can still cancel the contract, unless you close first.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states, including Maine. The resale certificate tells both of us, you and your lender, whether the building's money works. I would rather we read it together inside those five days than discover something in it three weeks later.

What is a Maine condo resale certificate, and who has to provide it?

A resale certificate is a written statement from the condominium association about its own finances, rules and legal position, prepared for the sale of one unit. Maine's Condominium Act, at 33 M.R.S. § 1604-108, puts the duty on the person selling you the unit. The seller has to furnish you a copy of the declaration (other than the plats and plans), the bylaws, the association's rules or regulations, and a reasonably current certificate.

The association prepares the certificate rather than the seller, and under the same section it has to furnish it within 10 days after the unit owner requests it and pays any reasonable fee the association has set for preparing it. The statute leaves the amount to the association, so please ask the seller or the management company what it charges rather than taking a number from me.

Two more lines in that section protect you directly. You are not liable for any unpaid assessment or fee greater than the amount shown in the certificate the association prepared. And while the seller is not liable to you for the association's delay in producing the certificate, you keep the right to cancel the purchase contract until it has been provided.

Every disclosure the certificate has to carry

The statute's list is specific, and each item answers a question you would want answered before you own a share of the building.

• Restraints on the free alienability of the unit. Any rule that limits your ability to sell, lease or transfer the unit, such as a right of first refusal or a rental restriction.
• The monthly common expense assessment, and any unpaid assessment currently due from the seller. Your dues figure, and whether the seller is behind. The dues go into your housing payment for qualifying purposes.
• Other fees payable by unit owners. Move-in fees, parking, storage, anything billed outside the dues.
• Anticipated capital expenditures. The roof, the siding, the elevator, the parking structure. This is the written warning that a special assessment may be coming, meaning a one-time charge the association bills each owner on top of the regular dues to cover a large expense.
• Reserves for capital expenditures, and any portion set aside for a specific project. The association's savings, and whether the money is already spoken for.
• The most recent balance sheet and income and expense statement, and the current operating budget. The association's financial picture, and this year's plan for the money, including how much of it goes to reserves.
• Unsatisfied judgments against the association, and the status of any pending suits in which it is a defendant. Litigation that could reach every owner's wallet.
• The insurance coverage provided for the benefit of unit owners. The master policy, so your own agent can tell you what your unit policy has to pick up.
• Any violations of health or building codes the board knows about, affecting the unit, the limited common elements assigned to it, or any other part of the condominium. Limited common elements are the parts of the common property reserved for your unit, such as an assigned parking space or a balcony.

The five-day window, and what voidable means for you

Under § 1604-108, the purchase contract is voidable by the purchaser until the certificate has been provided and for five days after that, or until the closing, whichever happens first. The statute's word is "voidable," which in plain terms means the contract stands unless you choose to cancel it. The statute calls the end point "conveyance," which for you is the closing.

The clock starts at delivery of the certificate rather than at the contract. If the seller signs with you on the first of the month and the packet reaches you on the ninth, your five days run from the ninth.

Closing ends the right even if the five days have not run, which is one reason I do not want the certificate arriving the same week as the closing.

The statute says five days. I would plan on calendar days and let your closing attorney or agent tell you how your contract counts them. Your purchase and sale agreement may give you its own review period for association documents as well, and the statutory right applies whether or not the contract gives you one.

The right is to cancel over what the association's documents show, and it does not address the appliances, the windows or the plumbing in your own unit. Those belong to your home inspection, and so does radon testing on a Maine home sale, which has its own rules about who runs it.

The window is specific to condominium resales

A client buying an ordinary detached home in Maine signs a purchase and sale agreement and is bound by its terms and contingencies. Maine has no general cancel-for-any-reason cooling-off period after signing on that kind of purchase.

The review right lives in the Condominium Act because a condo client is buying into a shared financial arrangement. A brand-new unit bought from the developer comes with a related right. Under 33 M.R.S. § 1604-107, the developer has to give a purchaser the public offering statement, which is the developer's disclosure document for a new condominium, before the contract is signed. A purchaser who did not acknowledge in writing that they received and reviewed it may cancel at any time before closing, unless they later waive that right in writing.

The rest of a Maine closing works the same for a condo as for any other home, including the transfer tax the statute splits between seller and buyer, which the Maine mortgage page covers. If this is your first home, the MaineHousing first-time buyer transfer tax exemption applies to a condo too.

Planning your offer and your loan around the window

The window only helps you if the certificate arrives while there is still time to act on it, so this is how I would handle it with you.

The day your offer is accepted, or before, I would have your agent ask the seller to order the certificate. The association has 10 days from the seller's request and payment, and your five days run after that, so the whole review can be done within about fifteen days of acceptance.

Once the packet reaches you, when you're ready, please provide every page of the resale certificate, the declaration, the bylaws and the rules the same day you receive them. Your lender runs its own review of the building, and it asks many of the same questions the certificate answers. Freddie Mac's standard for an established condominium project, at Guide Section 5701.5, asks for at least 10 percent of the association's budget to go to replacement reserves, which is the savings for major repairs and deferred maintenance. The lender's review is a separate question from your statutory window, and why condos are harder to finance than detached homes walks through what that review checks.

While I am reading it for the loan, you and your agent can read it for the ownership side. The unpaid assessments line shows whether the seller is behind. Reading the anticipated capital expenditures against the reserve balance and the budget gives you a fair idea of whether a special assessment is already on the horizon. The litigation and insurance statements cover what could reach your wallet from outside the budget. The restraints on alienability are where a rental restriction or a right of first refusal would show up, and either one may change whether this is the right unit for you at all.

Then you make your decision inside the five days, and your agent or attorney puts it in writing. You have three choices: proceed, renegotiate, or cancel. If the certificate shows a large anticipated expense with no reserve behind it, you and your agent can ask the seller for a credit or a price change while you still hold the right to cancel. If you decide to cancel, your agent or attorney sends the notice before the window closes, and the terms of your contract say how your earnest money comes back.

The dues from the certificate are part of your qualifying payment. Your debt-to-income ratio is figured with the association's monthly assessment included, so a certificate showing higher dues than the listing changes the arithmetic on your own file, and I want that corrected before the loan is locked.

Two mistakes I would rather you skip

The first is treating the five days as a second inspection period for the unit. The right is about the association's documents, so a window that leaks or a furnace on its last season belongs to your home inspection and your contract's inspection contingency, and those have their own deadlines.

The second is reading only the dues line. The dues tell you this year's cost, while the reserves, the anticipated capital expenditures and the litigation statement tell you what next year may cost.

A timeline, with made-up dates

The dates and numbers below are invented to show the mechanism, and they describe no real client or building.

Your offer on a two-bedroom unit in a 48-unit building is accepted on Monday, October 6. The seller sends the request and the preparation fee to the management company on Tuesday the 7th. Closing is set for Friday, November 14. The association delivers the certificate on Wednesday, October 15, inside its 10 days, so your five days run through Monday, October 20.

The certificate shows monthly dues of $412, no unpaid assessments on the unit, and a reserve balance of $61,000. The anticipated capital expenditures section lists a parking structure repair estimated at $390,000, and the pending suits section describes the association's claim against the contractor that built it. The current budget puts about 6 percent of assessments into reserves.

For your loan, the reserve contribution is under the 10 percent in Freddie Mac's established-project standard. I know by Thursday that the lender's review will take a fuller look at the building's finances, and I can plan the file around that. For your wallet, $390,000 of work against $61,000 of reserves means a special assessment or an association loan is likely, and spread across 48 units that is a number you can estimate and negotiate around. For your decision, you have until October 20 to ask the seller for a credit, to accept the risk at the current price, or to cancel the contract in writing.

The useful first step is to see your own numbers with the association dues included. Run your numbers and you will see rates for your scenario, your debt ratio with the dues in it, and closing costs priced for Maine. You can do that without a credit pull or an account, and nobody will call you. From there, get pre-approved for a Maine mortgage, and when the certificate arrives we read it together inside the window. No pre-approval from anybody is a loan commitment. Final approval always depends on the property, the project review, the appraisal and underwriting the complete file.

Common questions

What does a resale certificate have to include in Maine?

Under 33 M.R.S. § 1604-108, the association's certificate has to state any restraints on selling or transferring the unit, the monthly common expense assessment, and any unpaid assessment due from the seller. It also lists other fees payable by unit owners, anticipated capital expenditures, reserves, the most recent balance sheet and income and expense statement, and the current operating budget. It closes with any unsatisfied judgments and pending suits against the association, the insurance coverage provided for unit owners, and any health or building code violations the board knows about. The seller also has to furnish the declaration, the bylaws and the association's rules.

How long do I have to cancel a condo contract in Maine after I get the resale certificate?

You can cancel until the resale certificate has been provided and for five days after that, or until the closing, whichever happens first. The five days start at delivery of the certificate rather than at the signing of the contract, and once you have closed on the unit the right ends.

Who pays for the resale certificate in Maine?

The statute puts the request on the unit owner, who is the seller. The association furnishes the certificate within 10 days after the owner requests it and pays any reasonable fee the association has established for it. The statute does not set the fee amount, so the figure comes from the association or its management company, and whether the seller passes it to you is a matter for your purchase contract.

Does Maine have a cooling-off period when you buy a home?

Not for an ordinary detached-home purchase. A Maine purchase and sale agreement binds the parties according to its own terms and contingencies, and there is no general cancel-for-any-reason window after signing. The five-day right in 33 M.R.S. § 1604-108 is specific to condominium resales.

Does my lender look at the same documents as the resale certificate?

Many of the same ones. A conventional lender's project review looks at the association's budget, reserves, insurance, litigation and owner-occupancy, and Freddie Mac's established-project standard at Guide Section 5701.5 asks for at least 10 percent of the budget to go to replacement reserves. The lender's review decides whether the building qualifies for the loan program, and your five-day window is yours.

Estimates and educational information are not a loan approval or commitment to lend. Nothing here is a credit decision.