A great explanation of basic townhouse and condominium association facts and answers to common questions by Maury Beaulier - Minnesota (612) 240-8005
Condo & Townhome Association FAQ's
1. What is a Community Association?
Community Association is a generic term used to describe residential developments in which each owner is bound to a real estate organization by a set of governing documents that require adherence to a set of rules and payment of assessments. The money collected in assessments is used for the operation of the association. Membership is automatic when a unit is purchased. There are typically three types of Community Associations, including:
Typically, high rise style buildings where the exterior of the building and the grounds are owned and maintained by the Association. In this style of property, an owner typically owns the property within the four walls of their individual living unit. An owner has an undivided ownership interest in the common elements (typically including the roof, exterior building surfaces and grounds).
b. Planned Unit Development (Townhouses)
Townhouses developments generally consist of platted properties where each owner typically owns the living unit and land under and/or directly adjacent to the living unit. There are usually party walls between units which are the joint responsibility of the owners adjacent to such surfaces. There may or may not be common areas and the Association is typically responsible for maintenance of exterior building surfaces. Generally, the Association owns all common areas.
These are the least common (in Minnesota) of the various types of Community Associations. In a cooperative, a corporation holds title to the real estate, including the units and common areas. Typically, the share interests and/or leases gives the owners exclusive rights to a unit within the building.
2. What laws are Community Associations subject to in the state of Minnesota?
Generally, all associations formed after June 1, 1994 are governed by Chapter 515B of Minnesota Statutes, known as the Minnesota Common Interest Ownership Act. Community Associations are also generally governed by Chapter 317A of Minnesota Statutes, known as the Non Profit Corporation Act. There are a number of other statutes which may govern or apply to Community Associations. For specific guidelines with respect to your Association, you should consult with competent legal counsel.
3. What documents typically govern Community Associations?
Generally, there are four major documents that govern associations. Each document has a different purpose that is typically, as follows:
a. Declaration (of Covenants…, for Condominium…)
The Declaration governs the real estate forming the Association. Generally, the Declaration contains assessment provisions, real estate definitions, maintenance obligations and other information. This is the primary document establishing the Association and subjecting the land to Association governance.
b. Articles of Incorporation
The Articles of Incorporation are filed with the Minnesota Secretary of State to form the Association. The articles define and establish the non profit corporation. Often, the articles contain powers and duties relating to the Association.
The Bylaws are the operational guidelines controlling the Association. The Bylaws typically contain guidelines concerning meeting notices, quorums and voting and other operational issues. The Bylaws also define the Board and the roles of officers and directors of the Association.
d. Rules and Regulations
Rules and regulations are generally specific guidelines and policies relating to the day to day operation of the Association. Common topics covered by the Rules and Regulations include pet rules, collection policies, storage and property use restrictions, parking and other property issues.
4. How do Community Associations Operate?
Associations typically operate through a volunteer Board of Directors who oversee the operation of the Association. Community Associations may be self managed or may hire a management company to perform this role. The Board typically meets on a monthly basis to decide all issues involving the Association. On an annual basis, the Association holds an owners meeting to elect new board members and to update all owners as to the status of Association operations.
5. What Resources are Available to Community Associations?
There are a number or resources available to Associations. This web site contains links to helpful information about community association related topicsor for a consultation with aleading Townhome & Condominium Association lawyer call 952-746-2153.
Thanks to Maury Beaulier http://www.minnesotalawyers.com/ who provided this article.
He can be reached at (612) 240-8005!