When looking for a condo to buy in Minnesota or Wisconsin, it can be exciting to imagine all the amazing amenities you could have access to in the future. But it’s also important to remember that condo owners pay for landscaping services, gym access and more, through monthly fees to the condo’s homeowners’ association, or HOA.
HOA fees aren’t something to glance over. In addition to your mortgage and home-related expenses, the cost of HOA dues will have a monthly impact on your budget.
Here’s an explanation of the average cost of condo association fees in Minnesota and Wisconsin and what they offer you in return.
Who controls what, within a condo?
Before we dive into HOA fees, let’s discuss the details of living in a condo. There are two levels of control within a condo: the individual condo owners and the condo complex’s HOA.
A condo buyer owns and is responsible for their private residential unit. This means that after walking through the doors of a condo, owners have the freedom to make design and maintenance decisions for their space, such as:
- Painting walls
- Installing new kitchen faucets
- Upgrading appliances
Then, each individual unit is surrounded by the complex’s commonly-owned property. In most cases, the HOA is responsible for the maintenance and repair of the jointly-owned spaces, including:
- Indoors: Hallways, entryways and elevators
- Outdoors: Parking lots, roof and lawn
- Amenities: Fitness facilities, pools and hot tubs
- Reserve funds: Large-scale projects, insurance and unexpected emergencies
The HOA needs to raise money to provide services and amenities, and they do that by charging every condo resident a monthly HOA fee.
How much do typical condo HOA fees cost each month?
Each individual condo owner pays a predetermined amount in HOA fees each month; these fees are determined by the HOA and they are non-negotiable. In general, condo HOA fees are determined by the percentage of the complex you own, which typically ranges from 25 to 75 cents per square foot per month. However, some properties may charge more than this average condo fee estimate, such as:
- Luxury buildings in downtown Minneapolis.
- Brand-new complexes with many amenities.
- Units with breathtaking views of the Mississippi River.
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 and Wisconsin.
If a condo’s HOA fees are lower than the average, does it mean the complex is poorly run?
Not necessarily. A well-organized property can function on a modest budget and still 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 could 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 Wisconsin or 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. This is when condo unit owners are asked to pay the HOA more than their usual condo HOA fees. Special assessments are typically requested 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 is 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 in a one-time fee or over a span of multiple payments.
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 increase their fees? Can I fight back if I think the increase is unfair?
In most cases, the HOA will create a yearly budget that determines HOA fees. This means that while your HOA dues are set at the same rate throughout the year, they could fluctuate annually.
You may be wondering — am I able to challenge an increase in fees that I don’t agree with? Typically, no. As a condo owner, you unfortunately won’t be able to negotiate your HOA fee unless you join the HOA board, in which case you could advocate for lowering everyone’s rates.
Remember, the HOA board is composed of other unit owners. They aren’t looking to raise the fees any more than you are, so they usually only increase dues when absolutely necessary and after completing extensive research.
Key points and next steps
The cost of owning a condo in Minnesota or Wisconsin extends beyond the initial sale price. To know where your money is going — and whether a condo is the right choice for you — make sure to think about:
- The amount of money you’ll pay to the condo HOA. Does the cost of your condo fee match the services and amenities provided by your HOA?
- Your financial strategy. Plan in advance to cover monthly HOA dues and possible special assessments.
- Your involvement in the HOA. Would you want to be an active member of your condo’s association?
Moving forward with a condo, but still have questions? Reach out to Edina Realty or your agent for specifics on typical HOA fees for Wisconsin or Minnesota condos within your desired location and budget.
Additional resources to consider: