What is an HOA resale certificate in Texas, and what are a buyer's rights?
An HOA resale certificate is a document required under Texas law (Property Code Chapter 207) that discloses a homeowners association's financial health, outstanding dues or violations on the property, pending special assessments, governing documents, and active lawsuits. Texas buyers have 7 days after receiving the certificate to review it and terminate the contract for any reason — without losing earnest money. The seller pays for the certificate (capped at $375), and it must be delivered within 10 business days of ordering. Unpaid HOA debts typically transfer to the new owner at closing, making careful review essential.
By Cindy Dunnican | June 24, 2026
You've had your offer accepted on a home in Rockwall, Rowlett, or one of the newer communities in Fate or Royse City. Your option period is underway. Then a document shows up from the title company — something called an HOA resale certificate — and you have 7 days to decide what to do with it.
Most buyers have never heard of this document before they see one. That's not unusual. But understanding what it contains — and what your rights are after you receive it — can be the difference between a smooth closing and a costly surprise you discover after the keys are in your hand.
Here's what you need to know.
What Is the HOA Resale Certificate?
Texas Property Code Chapter 207 requires that sellers of homes in HOA communities provide buyers with a resale certificate before closing. This isn't optional, and it isn't the same as just handing over a copy of the subdivision's bylaws.
The resale certificate is an official snapshot of the HOA's financial condition and the property's standing within the community. A properly prepared certificate includes:
- The amount and due date of regular assessments (monthly or annual dues)
- Any outstanding dues, fines, or violations associated with the property
- The current reserve fund balance
- Pending or anticipated special assessments
- Active lawsuits involving the HOA
- The HOA's governing documents — the CC&Rs, bylaws, and rules
- Contact information for the HOA or management company
That last item — the governing documents — is the part buyers often skim past and later regret. Those pages spell out what you can and can't do with the property: fence height and material, vehicle storage rules, rental restrictions, pet policies, modification approval requirements, short-term rental prohibitions. If any of those restrictions matter to how you plan to use the home, this is where you find out before you close.
Who Pays for It — and When Does It Arrive?
Under Texas law, the seller is responsible for providing the resale certificate. The HOA or its management company can charge up to $375 for preparing and delivering it. The certificate must arrive within 10 business days of being ordered.
Here's where things can get complicated: the management company isn't a party to your real estate contract. That means they're not bound by your closing timeline. If the seller waits until week three of a 30-day contract to order the certificate, you may not receive it until days before closing — leaving you almost no time to review it thoughtfully.
One of the first things I do when representing a buyer on an HOA property is make sure that certificate gets ordered early. It's not a step you want to rush.
Your 7-Day Review Right
This is the part of the process that surprises buyers most: once you receive the resale certificate, Texas law gives you 7 days to review it — and during that window, you can terminate the contract for any reason related to what you find in it, without losing your earnest money.
That's a meaningful protection. It's separate from the option period, though they often overlap in timing. The option period gives you the right to terminate for any reason at all (after paying the option fee). The resale certificate review window specifically protects you from HOA-related issues.
If you haven't received the certificate at all, your review window never starts — which means your right to terminate remains open. This is why sellers and listing agents push to get the certificate delivered promptly.
What would actually cause a buyer to exercise this right? A few scenarios worth knowing:
- The HOA's reserve fund is critically underfunded, signaling a likely special assessment in the near future
- There's an active lawsuit against the HOA that creates financial or legal exposure for owners
- The property has outstanding fines or dues that the seller hasn't disclosed — and would transfer to you at closing
- The governing documents reveal restrictions that conflict with your plans for the home
HOA Debts Stay with the Property in Texas
This point deserves its own section because it catches buyers off guard.
In Texas, unpaid HOA assessments and fines don't necessarily disappear when the seller moves out. They can follow the property — which means they become your problem after closing if they're not resolved first.
The resale certificate should disclose any outstanding balance. If there is one, you have a few options: negotiate for the seller to pay it off before closing, ask for a credit at closing to cover it, or walk away during your 7-day review period. What you don't want to do is ignore it.
Your title company will flag outstanding HOA amounts as part of the closing process, and in most cases they'll require the balance to be resolved before funds transfer. But it's better to know early so you can account for it in your negotiations.
What to Actually Review — and What to Ask
When the resale package arrives, here's how I recommend buyers approach it:
Start with the financials. Look at the current reserve fund balance relative to what the HOA is supposed to have set aside. A healthy HOA typically keeps at least 70% of its recommended reserves funded. If the number is significantly lower — say, 30% or 40% — ask why. That gap often means a special assessment is coming.
Check for pending special assessments. The certificate should disclose any assessment that has been approved or is under serious consideration. These are one-time charges levied on all owners for major repairs or improvements — new roofs, pool resurfacing, repaving, fence replacement. Even a well-run HOA occasionally needs them. You want to know before closing, not after.
Read the rules.. Every master-planned community in Fate, Royse City, and Lavon, and established communities like Waterview in Rowlett, has its own set of rules layered on top of the base CC&Rs. Some communities prohibit vehicles parked in driveways overnight. Some restrict holiday decorations to a specific window. Some require architectural approval for any exterior change, including paint color. These aren't necessarily dealbreakers, but you should know what you're agreeing to.
Look for lawsuits. If the HOA is a named party in active litigation, the certificate should disclose it. A lawsuit against the HOA can affect the community's financials, its insurance coverage, and even your ability to get certain mortgage types on the property.
If anything in the package raises a question you can't answer yourself, ask. Your agent can help you interpret what you're reading. Your real estate attorney can weigh in on specific legal or financial concerns. The 7-day review window exists precisely for this purpose.
A Few Notes for Rockwall County Buyers Specifically
The majority of homes in Rockwall, Rowlett's newer neighborhoods, and the growth corridor communities — Fate, Royse City, Lavon — have HOAs. This isn't unique to high-end properties; it's standard across the full price spectrum from entry-level townhomes to lakefront custom homes in Heath.
New construction communities in particular often have multiple layers of HOA governance: a master HOA that covers the broader subdivision, plus a sub-association for specific sections or amenity areas. Each one may have its own resale certificate requirements and fees. It's not unusual to see two separate resale packages arrive for a new-construction resale in one of these communities.
If the home you're considering is in a MUD or PID district — common in Fate, Royse City, and Lavon — that's a separate consideration from the HOA. Those are tax districts, not associations, and they come with their own disclosures. Your purchase contract addresses them separately.
Understanding all of this before you write an offer — and working with an agent who's familiar with how these communities are structured — helps you move through the process without surprises. That's what the option period is designed to protect, and the resale certificate review adds another important layer of protection specifically for HOA properties.
Frequently Asked Questions
Who pays for the HOA resale certificate in Texas?
Under Texas law, the seller is responsible for ordering and paying for the HOA resale certificate. The maximum fee a Texas HOA or management company can charge is $375, and it must be delivered within 10 business days of the order. However, the cost and delivery responsibility can be negotiated in the purchase contract.
How many days does a Texas buyer have to review the HOA resale certificate?
Texas law gives buyers 7 days to review the HOA resale certificate after receiving it. During this window, the buyer can terminate the contract for any reason — without losing their earnest money — if they find something objectionable in the document. This right exists separately from the option period.
Do HOA dues and fines transfer to the new owner in Texas?
Yes. In Texas, unpaid HOA assessments, dues, and fines generally stay with the property — not the seller. If the seller has an outstanding balance or violation fine, it may transfer to you at closing unless resolved beforehand. The resale certificate should disclose any amounts owed, and you can negotiate resolution as part of the transaction.
What should I look for in an HOA resale certificate?
Focus on four areas: (1) outstanding dues or violations on the property that could transfer to you; (2) the reserve fund balance — a healthy HOA keeps at least 70% of its recommended reserves funded; (3) pending or threatened special assessments; and (4) any active lawsuits involving the HOA. Also review the rules and restrictions to confirm the community's policies align with how you plan to use the property.
What happens if the seller doesn't deliver the HOA resale certificate on time?
If the seller fails to deliver the resale certificate, the buyer's 7-day review window doesn't start — which means the buyer retains the right to terminate. The management company is not a party to the contract and is not bound by contract timelines, so delays happen. Experienced agents order the certificate as early as possible to prevent closing delays.
The HOA resale certificate is one of those documents that buyers often receive without knowing how significant it is — until they need it to be. Reading it carefully, asking the right questions, and acting within your review window is part of how you protect yourself in a Texas real estate transaction.
If you're starting your search for a home in Rockwall County, Rowlett, or the surrounding communities, here's a look at the 90 ways we guide buyers from first showing to closing day — you can download it free at https://thedunnicanteam.com/for-buyers/90-ways-free-download.
About Cindy Dunnican
Cindy Dunnican is the managing partner of The Dunnican Team at Coldwell Banker Apex, Realtors, serving the Northeast Dallas suburbs, Rockwall County, and the surrounding North Texas communities. Alongside her husband and business partner, Cory, she helps buyers and sellers navigate move-up purchases, downsizing, relocation, new construction, and luxury lake and golf course properties. Connect with The Dunnican Team at thedunnicanteam.com.
