Closing Tip of The Week

Written by Joel Gerber. Posted in Closing Tips, Real Estate

Confirm the Accuracy of the Community Association Disclosure

With increasing frequency I have received calls from agents regarding the seller’s failure to disclose certain fees on the Community Association Disclosure (“CAD”). These calls are coming just a few days before closings as the settlement statements are distributed to the parties. Those conversations are going something like this:

The selling agent says:
“The seller stated there was no transfer or capital contribution fee.”

The listing agent says:
“The seller had no clue there was a transfer or capital contribution fee.”

As you can imagine this is not the type of issue either party wants to be dealing with right before the closing. In addition, some of the transfer and capital contribution fees I’ve seen are substantial.

So what is the Seller’s obligation with respect to execution of the CAD? It’s really difficult to say. Section P of the CAD only obligates the Seller to complete the CAD to the best of his or her knowledge. That’s it nothing more. Does the average seller go review the association covenants prior to completing the CAD? Of course not.

To ensure that you have all of the information necessary to negotiate the best terms for your client, the selling agent should confirm the accuracy of the information included in the CAD during the due diligence period. You cannot rely on the listing agent (or his or her client) to accurately complete the CAD.

Now many of the listing agents I work with do a great job of confirming the information set forth in the CAD. That actually protects the seller from having to potentially put up additional money at closing for failure to disclose (or properly disclose) fees on the CAD.

Whether you are on the selling or listing side of the transaction, please make sure the information in the CAD is accurate. In the end, it will make for a smoother closing – which is what it’s all about anyway.

As always, if you need help with anything at all, please do not hesitate to contact me anytime at (912) 484-1996 (even nights and weekends) or email me at

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    Savannah, GA 31401


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