Townhome Association and Condo Answers FAQ

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:
a. Condominiums
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.
c. Cooperatives
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.
c. Bylaws
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!

Steve Hoogenakker - http://www.landscape.pro http://www.townhome.pro Steve@Landscape.Pro

The difference between Condominium, Townhomes and Co-ops

Condos, Townhouses And Cooperatives: What's The Difference?

By Leigh Maisenbacher

So, what is the difference between condos, townhouses and cooperatives? The following explanations will help you sort out the differences and similarities in ownership of these three types of real estate properties.CondosAn individual condo owner holds title to the condominium unit only, not the land beneath the unit, so condos may be stacked on top of each other. All condo owners share title to common areas. Common areas include land, the exterior of buildings, hallways, roofs, swimming pools and any area used by multiple owners. Condo owners pay property taxes on their individual units. A property owners' association usually manages the complex and collects fees from all condo owners in order to maintain common areas.

Townhouses

Townhouses are usually a series of single-story or multistory units that are linked to each other horizontally by common walls. Townhouse owners hold title to their units and the land beneath them, so townhouse units cannot be stacked on top of each other. As with condos, common areas are owned jointly by all townhouse owners. Townhouse owners pay property taxes on their individual units. A property owners' association usually manages the townhouse complex and collects fees from all owners in order to maintain common areas.

Cooperatives or Co-ops

If property is a cooperative arrangement, a corporation holds title to all associated real estate. Buyers purchase stock in the co-op corporation and are considered shareholders, not owners of real property. Each shareholder holds a lease to their unit that runs for the life of the corporation. The corporation pays taxes. Any mortgages are normally held and paid by the corporation. All costs to operate the building are shared by shareholders. An administrative board must usually approve new cooperative shareholders. Cooperative ownership is not common in most states of the United States.If you're informed about all of your obligations as a condominium or townhouse owner before you sign the contract and are agreeable to them, you just may have found yourself the home you've always wanted. As with every major financial commitment, though, you'll have to weigh the pros and cons of the agreement you're preparing to enter. Perhaps the most important thing to remember as you make your decision is to take your time. Demand full disclosure of condo or townhouse association fees and exactly what they cover. Know upfront what your monthly expenses are expected to be; they can vary considerably among different condominium and townhouse developments. Shop around and get some perspective on how different properties approach their residents. Ask your real estate agent if they have sold units in this development before, and what kind of feedback they have gotten from their clients after they moved in. First-hand reports are important tools during your home search process, and it would be prudent to take them to heart.

Steve Hoogenakker Steve@Landsape.Pro http://www.landscape.pro http://www.townhome.pro