Selling Your Condo? Do You Know What a Condo Status Letter Is?

Are you planning on selling your condo?  Did you know that you will have to order a Condo Status Letter from your Homeowner's Association or Management Company?

One of your closing fees as a condo owner is for a Condo Status Letter.  A Condo Status Letter is a letter from the Condo Association or Management Company stating that the status of your condo dues are in good standing.

Why do you need a status letter?  The Title Company will need this Status Letter as proof because they are issuing a title insurance policy to the new owner.  The policy insures that the condo has clear title and is free from liens.  If you are in arrears in your association dues, your association can put a lien on your condo.

Can I just provide proof of payment for my dues?  The title company will not accept any proof of payment or receipt.  They will require the Condo Status Letter from the Association or Management Company.  The fees from this Status Letter is also another revenue stream for the Association or Management Company.  

How much does a Condo Status Letter cost?  There is no set cost for a Condo Status Letter.  I have seen them range from $0 for a small self-managed associated to $350.  It all depends on the Association or Management Company.  This is a set fee and not negotiable.

Keep in mind that you should order the Condo Status Letter close to your closing date.  The Status Letter needs to be current with your payment.  If you pay monthly, for example, you must close in that month of the Status Letter.  If your closing extends into the next month, an updated status letter will be required.  Of course, resulting in another fee.  You will also want to keep in mind that you don't want to order the Status Letter too close to closing.  If you don't allow enough time for the Association or Management Company to prepare the letter (sometimes they only do them on certain days), you may have to pay a rush fee.

These fees will more than likely be on your closing statements as a cost, however, they could be required to be paid out of pocket before closing.

In closing, if you are planning on selling your condo, a call to your Association or Management Company as to the cost of a Status Letter, and the time frame needed to have it for closing, is a good idea!


Helping with your real estate needs in Southern Michigan - Kelly Dix, Residential Realtor 586-899-6666