This is a legal document prepared by the management company for the title company, for which there is a fee, typically paid by the current homeowner. The status letter discloses any monies owed to the association as of the closing date. This includes any outstanding or pro-rated assessments, working capital or deposits due. The status letter is also the document used by the management company to convey specific information about the association, such as, if they have a lease restriction in place, any litigation and or any kind of special assessments coming up.
The title company places the request for this information via www.HomeWiseDocs.com prior to closing to ensure these funds are collected at the time of closing. The management company then tracks the closing, once the property has sold, the funds are forwarded to the management company along with a copy of the Warranty Deed. The management company then takes the information from the Warranty Deed, creates a new account and closes out the account for the previous owner.