DC Real Estate Rescission Periods & Document Review
What’s The Deadline For Document Review? How long do you have to review your association documents for a new or resale home purchase in the District of Columbia? Are they required for all home types, or just condominiums and cooperatives? What needs to be reviewed? We spell it all out for you.
What Is A Rescission Period?
By definition, “rescission” is the revocation, cancellation, or repeal of a law, order, or agreement.
The DC Condo Act (reference your purchase agreement) essentially gives buyers the right to review public offering statements, association documents and/or resale certifications for a specified number of days from date of receipt and withdraw from an applicable Washington DC real estate transaction should they not find details acceptable.
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Bullet Points
- Rescission periods differ for resales & new construction
- The DC Condo Act provides guidelines for documentation
- Ask for add’l documentation early in the rescission period
- Withdraw without penalty during the rescission period
- Allow ample time to withdraw
DC CONDO DOCUMENT REVIEW | NEW CONSTRUCTION
Public Offering Statements and other review materials
Days For Review| New Condos
Documents For Review
Code of the District of Columbia § 42–1904.04. Public offering statement
A public offering statement discloses the characteristics of the condominium and the units, and all unusual and material circumstances or features affecting it.
Code of the District of Columbia § 42–1904.02
The disposition shall be expressly and without qualification or condition subject to cancellation by the purchaser before conveyance of the unit, within 15 days after the date of execution of the contract for the disposition, or within 15 days after delivery of the current public offering statement, whichever is later.
A public offering statement shall not be current unless any necessary amendment is incorporated or attached. If the purchaser elects to cancel, he or she may cancel by notice hand-delivered or sent by United States mail, return receipt requested, to the seller. The cancellation shall be without penalty, and any deposit made by the purchaser shall be promptly refunded in its entirety.
TIPS
- You can consult a real estate attorney for review of your public offering statement
- Read our pages on buying new construction and what new home agents won’t say for more insight on performing due diligence
Instruments
- A copy of the condominium instruments;
- A copy of any management contract, lease of recreational areas, and any other contract or agreement substantially affecting the use or maintenance of, or access to all or any part of the condominium with a brief narrative statement of the effect of each such agreement upon a purchaser, the condominium unit owners and the condominium, and a statement of the relationship, if any, between the declarant and the managing agent or firm;
Information
- The name and principal address of the declarant and condominium;
- The developer’s name, address, and the form, date, and jurisdiction of organization
- Address of each of its DC offices
- Names and addresses of all general partners (partnerships), and all directors and owners of 10% or more of the beneficial interest in the stock of applicant if applicant is a corporation
- Names and addresses of the attorney primarily responsible for the preparation of the condominium documents, the general contractor, if any, all contractors primarily responsible for construction, reconstruction or renovation of the electrical, plumbing or mechanical systems or the roof of the condominium, and the architect and engineer primarily responsible for the design, construction or renovation of the condominium
- Total number of units to be sold and rented;
Statements
- A general statement of status of construction, project’s compliance with zoning, site plan and building permit regulations, source(s) of financing available and the estimated amount necessary to complete all improvements shown on the plats and plans as “not yet completed” or “not yet begun”
- Projected date of completion of construction or renovation of the major amenities of the condominium
- Significant terms of any encumbrances, easements, liens and matters of title affecting the condominium, significant terms of any financing offered by or through the declarant to purchasers of units in the condominium, provisions and any significant limitations of any warranties on the units and the common elements
In addition to other required information. Read the full text
DC CONDO DOCUMENT REVIEW | RESALE
Resale Certificate Package and other review materials
Days For Review | Resale
Resale condos are afforded 3 business days for review, beginning the day following the date of receipt of the resale package.
Documents For Review
Code of the District of Columbia § 42–1904.11: Resale by unit owner; seller to obtain appropriate statements
Seller is to obtain required documents from the association and furnish to purchaser.
If the perscribed condominium instruments and certificate are not furnished to the purchaser on or prior to the 10th business day following the date of execution of the contract of sale by the purchaser, the purchaser may cancel the contract by giving notice in writing to the seller prior to receipt of the condominium instruments and certificate, but not after conveyance under the contract.
The purchaser receives back any earnest money or other deposit without delay or deduction upon cancellation.
TIPS
- You can consult a CPA and real estate attorney for review of your condominium or cooperative resale package, and review of the association’s financials
- Read our pages on buying DC condos and DC cooperatives for more insights
Instruments
- Bylaws
- CC&Rs
- Articles of Association
- Budget
- Reserve study
- Annual Report
- Association disclosures
- Master Insurance Policy
- Resale certificate
- Declarations
- Unit records (dues, fines, fees, upgrades)
Statements
Appropriate statements pursuant to § 42-1903.13(h) and, if applicable, § 42-1903.15, which need not to be in recordable form;
- Statement of any capital expenditures approved by the unit owners’ association planned at the time of the conveyance that are not reflected in the current operating budget;
- Statement of the status and amount of any reserves for capital expenditures, contingencies, and improvements, and any portion of such reserves earmarked for any specified project by the executive board;
- Statement of financial condition for the unit owners’ association for the then most recent fiscal year for which such statement is available and the current operating budget, if any;
- Statement of the status of any pending suits or any judgments to which the unit owners’ association is a party;
- Statement regarding insurance coverage provided for all unit owners by the unit owners’ association and whether the coverage includes public liability, loss or damage, or fire and extended coverage insurance with respect to the unit and its contents;
- A statement that any improvements or alterations made to the unit, or the limited common elements assigned thereto, by the prior unit owner are not in violation of the condominium instruments;
- A statement of the remaining term of any leasehold estate affecting the condominium or unit(s) and provisions governing any extension or renewal;
- in addition to other required information. Read the full text
DC ATTACHED & DETACHED HOMES HOAS
Properties in Home Owners Associations
Code of the District of Columbia D.C. Nonprofit Corporation Act
Although developers aren’t required to provide a specific right of rescission for association documents on fee simple products such as single family attached or detached homes within homeowner associations, they may opt to do so. Be sure to ask before signing a contract.
If there is no rescission clause offered, negotiate one.
If HOA documents aren’t provided to you prior to contracting on a home or the owner says they don’t have a copy, request that the owner search for CC&Rs and bylaws on OTR’s Recorder of Deeds Online Public Records portal by entering the association or subdivision name.
Make your offer subject to examination of the HOA’s financial records, which must be made ‘reasonably available’ to owners and their authorized agents. In other words, the seller can, and should, provide them.
Resale attached and detached fee simple homes within associations are govcerned by the HOA’s self-regulating documents, which differ for every association. DC home owner associations are also subject to portions of the DC NonProfit Corp Act, and the code for condominiums, as well as some federal regulations, the ADA and DC and federal Fair Housing laws.
District of Columbia homeowner associations (HOAs) are regulated by the D.C. Nonprofit Corporation Act, (residential developments with common areas run by members).
DC Code of the District of Columbia
Condominiums and cooperatives are regulated by DC Code Chapter 19.
Resources
DC Condominiums & Cooperatives
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Code of the District of Columbia | Chapter 19
ROGHT OF RESCISSION
Virginia
Days For Review| All Properties
§ 55.1-2312. Cancellation of contract by purchaser
The purchaser may cancel the contract:
1. Within three [calendar] days, or up to seven days if extended by the ratified real estate contract, after the ratification date of the contract if the purchaser receives the resale certificate, whether or not complete pursuant to § 55.1-2310, or a notice that the resale certificate is unavailable on or before the date that the contract is ratified;
3. At any time prior to settlement if the resale certificate is not delivered to the purchaser.
Significant Changes to Resale Certificates/Disclosure Packets Effective July 1, 2023
Passage of Senate Bill 1222 and House Bill 2235 in 2023 resulted in significant changes to requirements for providing of resale certificates and disclosure packets. All provisions for resale certificates (condominiums) and disclosure packets (property owners’ association) from the Virginia Condominium Act (§55.1-1900, et seq.), the Property Owners’ Association Act (§55.1-1800, et seq.), and the Virginia Real Estate Cooperative Act (§55.1-2100, et seq.) are now contained within a single act with all resale provisions: the Virginia Resale Disclosure Act (§55.1-2307, et seq.). This created several significant changes to the provisions for providing resale documents. Please refer to the legislation in its entirety for more information.
Requirements | Resale
§ 55.1-2309. Resale certificate; delivery.
B. Unless exempt pursuant to § 55.1-2317, the association, the association’s managing agent, or any third party preparing the resale certificate on behalf of the association shall deliver such resale certificate within 14 days after a written request by a seller or seller’s agent.
C. The association, association’s managing agent, or any third party preparing the resale certificate on behalf of the association shall deliver the resale certificate to the seller, or to such person as the seller may direct, either printed or in a generally accepted electronic format as the seller may request.
D. The information contained in the resale certificate shall be current as of a date specified on the resale certificate. The seller or purchaser may request an updated resale certificate as provided in § 55.1-2311.
§ 55.1-2311. Updated resale certificate
If a resale certificate was issued more than 30 days but less than 12 months before settlement, the seller or the purchaser, upon proof of being the contract purchaser of the unit, may request an updated resale certificate. The updated resale certificate shall be delivered to the person requesting it, or as such person may direct, in the format requested. The updated resale certificate shall be delivered within 10 days after the written request.
The updated resale certificate shall contain current information for all items that may have changed from the original resale certificate or a statement that there are no changes.
A settlement agent authorized by the seller or purchaser may request a financial update and the association shall provide such information within three business days after the written request.
§ 55.1-2312. Cancellation of contract by purchaser.
The purchaser may cancel the contract:
- Within three days, or up to seven days if extended by the ratified real estate contract, after the ratification date of the contract if the purchaser receives the resale certificate, whether or not complete pursuant to § 55.1-2310, or a notice that the resale certificate is unavailable on or before the date that the contract is ratified;
- Within three days, or up to seven days if extended by the ratified real estate contract, from the date the purchaser receives the resale certificate, whether or not complete pursuant to § 55.1-2310, or a notice that the resale certificate is unavailable if delivery occurs after the contract is ratified; or
- At any time prior to settlement if the resale certificate is not delivered to the purchaser.
Written notice of cancellation is to be provided to the seller in accordance with the terms of the contract. The purchaser has the burden to demonstrate delivery of the notice of cancellation.
If the unit is governed by more than one association, the timeframe for the purchaser’s right of cancellation shall run from the date of delivery of the last resale certificate.
Cancellation shall be without penalty, and the seller shall cause any deposit or escrowed funds to be returned promptly to the purchaser.
Read the full text for all provisions as worded by the Act.
§ 55.1-2313. Liability for resale certificate
A seller providing a resale certificate pursuant to § 55.1-2310 or 55.1-2311 shall not be liable to the purchaser for any erroneous information provided by the association and included in the certificate or for the failure or delay of the association to provide the resale certificate in a timely manner.
A purchaser shall not be liable for any unpaid assessment or fee greater than the amount set forth in the resale certificate, updated resale certificate, or financial update.
The association shall, as to the purchaser, be bound by the information provided in the resale certificate or updated resale certificate as to the amounts of current assessments, including any approved special or additional assessments, and any violation of the governing documents or rules and regulations as of the date of the resale certificate, updated resale certificate, or financial update unless the purchaser had actual knowledge that the contents of the resale certificate were in error.
Read the full Chapter for all provisions.
Resale Certificate
§ 55.1-2310. Resale certificate; form and contents.
A. The association shall include the completed resale certificate form, developed by the common interest community board pursuant to subdivision 3 of § 54.1-2350, with supporting documentation set out in the following order:
1. The name, address, and phone numbers of the preparer of the resale certificate and any managing agent of the association;
2. A copy of the governing documents and any rules and regulations of the association;
3. A statement disclosing any restraint on the alienability of the unit for which the resale certificate is being issued;
4. A statement of the amount and payment schedules of assessments and any unpaid assessments currently due and payable to the association;
5. A statement of any other fees due and payable by an owner of the unit;
6. A statement of any other entity or facility to which the owner of the unit being sold may be liable for assessments, fees, or other charges due to the ownership of the unit;
7. A statement of the amount and payment schedule of any approved additional or special assessment and any unpaid additional or special assessment currently due and payable;
8. A statement of any capital expenditures approved by the association for the current and succeeding fiscal years;
9. A statement of the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects;
10. The most recent balance sheet and income and expense statement, if any, of the association;
11. The current operating budget of the association;
12. The current reserve study, or a summary of such study;
13. A statement of any unsatisfied judgments against the association and the nature and status of any pending actions in which the association is a party and that could have a material impact on the association, the owners, or the unit being sold;
14. A statement describing any insurance coverage provided by the association for the benefit of the owners, including fidelity coverage, and any insurance coverage recommended or required to be obtained by the owners;
15. A statement as to whether the board has given or received written notice that any existing uses, occupancies, alterations, or improvements in or to the unit being sold or to the limited elements assigned thereto violate any provision of the governing documents or rules and regulations together with copies of any notices provided;
16. A statement as to whether the board has received written notice from a governmental agency of any violation of environmental, health, or building codes with respect to the unit being sold, the limited elements assigned thereto, or any other portion of the common interest community that has not been cured;
17. A copy of any approved minutes of meetings of the board held during the last six months;
18. A copy of any approved or draft minutes of the most recent association meeting;
19. A statement of the remaining term of any leasehold estate affecting a common area or common element, as those terms are defined in §§ 55.1-1800, 55.1-1900, and 55.1-2100, in the common interest community and the provisions governing any extension or renewal of such leasehold;
20. A statement of any limitation in the governing documents on the number or age of persons who may occupy a unit as a dwelling;
21. A statement setting forth any restriction, limitation, or prohibition on the right of an owner to display the flag of the United States, including reasonable restrictions as to the size, time, place, and manner of placement or display of such flag;
22. A statement setting forth any restriction, limitation, or prohibition on the right of an owner to install or use solar energy collection devices on the owner’s unit or limited element;
23. A statement setting forth any restriction, limitation, or prohibition on the size, placement, or duration of display of political, for sale, or any other signs on the property;
24. A statement identifying any parking or vehicle restriction, limitation, or prohibition in the governing documents or rules and regulations;
25. A statement setting forth any restriction, limitation, or prohibition on the operation of a home-based business that otherwise complies with all applicable local ordinances;
26. A statement setting forth any restriction, limitation, or prohibition on an owner’s ability to rent the unit;
27. In a cooperative, an accountant’s statement, if any was prepared, as to the deductibility for federal income tax purposes by the owner of real estate taxes and interest paid by the association;
28. A statement describing any pending sale or encumbrance of common elements;
29. A statement indicating any known project approvals currently in effect issued by secondary mortgage market agencies; and
30. Certification that the association has filed with the Common Interest Community Board the annual report required by law, which certification shall indicate the filing number assigned by the Common Interest Community Board and the expiration date of such filing.
Maximum Fees
Maximum fees for resale documents:
TIP
- Consult a CPA and real estate attorney for review of your condominium or cooperative resale package, and review of the association’s financials
Disclaimer
Information provided on this page is intended as educational and is not to be construed as legal, tax or financial planning advice. Please consult a licensed attorney and/or CPA for your transaction needs.
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