Sam Schneiderman, broker owner of Great Boston Home Team explains about a paper that every condo buyer and seller needs to know about.
A 6d certificate is required by lenders at closing to insure that all condo fees and assessments have been paid through the date of closing. Without it, there is no way to insure that the seller’s condo fees and/or assessments are paid up or if they owe the condo association thousands of dollars.
Most condo owners don't understand what it is, how it protects them, why they need to obtain or sign it, and how to get it notarized, which is typically a real inconvenience for them.
An attorney can not give clean title to a buyer without it. Therefore, a seller can not sell a condo without a 6d certificate.
It protects the condo association because it insures that an owner can not sell and leave the association with unpaid fees and assessments.
It protects incoming buyers by insuring that they will not be liable for any unpaid fees related to the units that they are buying and it insures that the association gets the funds that they need to operate.
It protects a lender because it insures the financial solvency of the association and its ability to continue to maintain the property. It also insures that the condo association will not put a potentially large lien on the unit that is the security for the lender’s mortgage.
The 6d certificate needs to be signed in the presence of a notary by the number of condo association trustees (aka board members) specified in the condominium documents. In a small condominium building, that could be just one trustee/owner, some or all of them. There is no consistency in condo documents from one association to another.
Condo documents define who the trustees are and how many trustees are needed to govern the condo association. In small associations (four or fewer units) the condo docs often specify that all of the unit owners are automatically trustees. In larger associations, most trustees are elected by vote of the unit owners.
Despite the fact that the signing of a 6d is just another business transaction within the real estate transaction, it can get interesting when the people that need to sign aren’t fond of the people that are leaving. I’ve seen cases where a trustee refused to sign until the seller’s attorney pointed out that, as trustees, they were legally obligated to sign or they would get sued for causing the seller's lost sale by refusing to sign.
Allow plenty of time (about 3 weeks, if possible) to get a 6d signed. It can often be a challenge to get the required signatures in a smaller association that lacks professional management, especially around holidays and vacation time. Fees and assessments due through the closing date should be paid well in advance so that the trustees can certify that they are paid on the 6d certificate.
Anyone have tales of 6D hassles?
The author is solely responsible for the content.