What to Ask When Purchasing Minnesota Condos or Townhomes.

Minnesota townhomes and condos are becoming increasingly popular with homebuyers. There are many reasons. Everyone is so busy these days! Who wants to come home from work and a long commute to mow the grass, scrape and paint the garage, or fix the chimney?

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The Rising Popularity of Minnesota Condos

Also, demographic trends are suggesting that condos will inevitably dominate the Minneapolis real estate market. Homes occupied by a single person will be the norm in the future. We have a population of aging baby boomers, who might not want be able to do lawn care or exterior painting, sidwalk repair, or siding replacement even if they wanted to. In addition, there are a growing number of “snow birds” who purchase Minnesota condos because they want to leave for Florida or Arizona in the winter, without worrying about keeping the sidewalk shoveled for the mailman.

Kitchen in luxury Minnesota condo

Kitchen in luxury Minnesota condo

However, there are a number of rules that all Minnesota condo associations will enforce. Typically these relate to the number or types of pets you may own, parking restrictions, or your right to rent out your Minnesota condo to someone else. Fortunately, as a prospective Minnesota condo owner, you have statutory rights to peruse pertinent documents describe these restrictions. If you have a signed purchase agreement for a Minnesota condo, you have ten day right-of-recission from time of the document delivery, during which you can peruse rules and regulations, disclosure statements, and financial documents. You may also want to contact the association to ask more questions about your concerns.

Ten Questions to Ask the HOA When Purchasing a Minnesota Condo

Before you buy, contact the condo board with the following questions. In the process, you’ll learn how responsive, and organized, its members are.

1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale. Many Minnesota condo associations restrict the number of units that may be rented out. If the association allows many units to be rented out, this may affect the character of your neighborhood.

2. What covenants, by-laws, and restrictions govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can’t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them. And have an attorney review the Minnesota condo property docs, including the master deed, for you.

3. How much does the association keep in reserve? How is that money being invested? If you are purchasing a Minnesota condo, you want to ascertain that there are fund available for unexpected repairs.

4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to other associations of Minnesota condos.

5. What does and doesn’t the assessment cover,common area maintenance, recreational facilities, trash collection, snow removal, roof, siding? Many buyers who are purchasing Minnesota condos are surprised to find that some parts of the unit are not considered condo elements. Sometimes garage doors and decks are the responsibility of the condo owner.

6. What special assessments have been mandated in the past five years? How much was each condo owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy.

7. How much turnover occurs in the building?

8. Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.

9. Is this particular Minnesota condo developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren’t in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property?  This is not uncommon in some of the neighborhoods that have a variety of styles and/or price ranges.  There are a number of Eden Prairie townhome associations that have more than one professional management company involved in the upkeep. In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.

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