When you’re looking at condos to buy in Minnesota, it’s exciting to imagine the view, lawn service and gym that you will have access to. But it’s important to remember that you’re paying for each of those amenities via monthly fees that you’ll owe to the condo complex’s homeowners’ association, or HOA.
HOA fees aren’t something to be glanced over. The cost of your HOA dues will also have a monthly impact on your wallet. Here are insights you can use to discover the average cost of these condo association fees in Minnesota and what they will offer you in return.
Who controls what, within a condo?
Before we dive into HOA fees, let’s review what makes them a necessary reality of condo life in Minnesota. A condo buyer owns a private residential unit that is surrounded by commonly-owned property.
This means that there are two levels of control within a condo: The individual condo owners, who are responsible for their own units and the complex’s HOA, which is responsible for some of the maintenance and repair of the jointly-owned spaces.
After walking through the doors into their Minnesota condo unit, owners have freedom to make design and maintenance decisions for that space; they typically can make changes like painting the walls and installing new kitchen faucets.
Meanwhile, the HOA has control over shared spaces, such as:
- Indoors: Hallways, entryways and elevators
- Outdoors: Parking lots, roof and lawn
- Amenities: Fitness facilities or pools and hot tubs
The HOA may also take care of some utilities in the condo units or shared spaces. Finally, the HOA will designate a chunk of money toward large-scale projects, insurance and unexpected emergencies. This set-aside pot of money is usually called the HOA’s “reserve fund.”
But the HOA needs to raise money to provide these services and amenities, and they do that by charging every condo resident a monthly HOA fee.
How much do typical condo HOA fees in MN cost each month?
Each individual condo owner will pay a predetermined amount in HOA fees each month; these fees are determined by the HOA and they are non-negotiable.
Minnesota condo HOA fees are typically determined by the percentage of the complex you own. However, the HOA may also take into account other factors that could affect the value of your unit. For example, a condo owner who overlooks the Mississippi River may pay more in fees than someone whose unit is adjacent to another high-rise and offers no such view.
In general, typical association fees for condo owners in Minnesota are between 25 and 75 cents per square foot per month. Some properties — such as luxury buildings in downtown Minneapolis or brand-new Uptown complexes with many amenities — may charge more than this average Minnesota condo fee estimate.
Although most HOAs follow the same general guidelines, condo HOA fees and coverage may fluctuate between properties. Your REALTOR® will be able to help assess the fairness of the fees you come across as you search for condos across Minnesota.
If a condo’s HOA fees are lower than the average for Minnesota, does it mean the complex is poorly run?
Not necessarily. An HOA is like any other organization that has to stick to a budget. A property can function on a modest budget and preserve the standards of the complex, but it’s important not to cut back so much that the building depreciates.
Modest HOA fees could be the result of motivated tenants and HOA members that help the entire complex save on expenses. A member may act as the property manager rather than hiring an outside management company or a persistent HOA may renegotiate contracts and find deals (on plowing or HOA insurance) to minimize costs.
Lower association fees for Minnesota condos could also indicate that the complex has fewer built-in amenities. If a property has low HOA fees, it’s still important to ensure that the HOA:
- Has secured proper insurance
- Is currently maintaining the property’s condition and value
- Has future plans for repairs and maintenance
- Has saved sufficient reserve funds to pay for future updates
What is a special assessment, and how can it affect my finances?
On occasion, your condo board may call for a special assessment, which is when condo unit owners are asked to pay the HOA outside the bounds of their usual condo HOA fees.
Special assessments are typically called when an HOA has to cover unexpected expenses that exceed the amount they have saved within the reserve fund.
The protocol of how a special assessment is calculated and adopted varies between condo complexes and will be detailed in their bylaws.
In general, each HOA will:
- Receive an estimate from a contractor to analyze the project scope and budget
- Divide the cost of the project among the condo owners
- Collect special assessment payments from each condo owner
Note: The project cost may determine the payment window. For smaller projects, the HOA could charge every condo owner a one-time fee to be paid in full. However, larger projects may call for multiple payments divided up over a longer period of time.
How often do HOAs in Minnesota increase their fees? Can I fight back if I think the increase is unfair?
Typically, the HOA will create a yearly budget from which the condo HOA fees are determined. This means that your HOA dues could fluctuate annually. Remember, though, that the HOA board is comprised of other unit owners. They aren’t looking to raise the dues any more than you are, so they usually complete extensive research prior to raising dues.
You may be wondering — am I able to challenge an increase in fees that I don’t agree with? In short, no. As a condo owner, you won’t be able to negotiate your HOA fee. The fee is pre-set by the HOA and all condo owners must pay it.
However, if you strongly disagree with your monthly dues, you may join the HOA where you could advocate for lowering everyone’s fees or work to cut costs on existing bills and contracts.
Key points and next steps
As you can see, the cost of owning a condo in Minnesota extend beyond the initial sale price. To know where your money is going — and whether or not a MN condo is the right choice for you — make sure to think about:
- The amount of money you are paying toward condo HOA fees. Does the cost of your condo fee match the services provided by your HOA?
- Your financial strategy. It is important to plan in advance to cover HOA fees and special assessments.
- If you would consider being an involved board member of your condo’s association.
Still have questions? Reach out to Edina Realty’s customer care team, where you’ll be connected with a condo expert who can explain typical HOA fees for Minnesota condos within your desired location and budget.