Section 207.003 of the Texas Property Code governs the requirement for a residential subdivision or townhome to provide a resale certificate to an owner upon request as well as the consequences for an association who fails to comply with such a request. The Texas Legislature amended Section 207.003 and set a maximum fee that may be charged for providing a resale certificate to an owner and increased the penalties that an owner may obtain against the association in a lawsuit should the association fail to provide a resale certificate. These changes are applicable to owners and residents within both residential subdivisions and townhomes, but do not apply to condominium associations, and take effect on September 1, 2021.
The maximum amount that a residential subdivision or townhome association may charge for a resale certificate is now $375.00. The maximum amount that they may charge for an updated resale certificate is $75.00.
Should an association fail to provide a resale certificate to an owner, and should that owner make a second request for the information via certified mail, return receipt requested, or via hand delivery with receipt, then Section 207.003 allowed for the owner to bring a cause of action against the association. The recent changes in the law both decreased the amount of time an association has to comply with a second request for a resale certificate to five business days (down from seven business days) and increased the statutory penalties that an owner may obtain against the association to $5,000.00 (up from $500.00).
It is our firm’s recommendation that all associations ensure that they and their management companies are not charging resale certificate fees over $375.00, or updated resale certificate fees over $75.00. Further, if you receive a second request for a resale certificate that is delivered via certificated mail or hand delivery, we recommend that you make every effort to promptly comply with the request within five business days of the request.