Posted in: Buying a home

Ask an Edina Realty Lawyer: How does buying a condo or townhouse differ from a traditional home?

buying a condo or townhouse

Homeownership can be complicated, but we also think it’s one of the most rewarding ventures out there. In our series Ask an Edina Realty Lawyer, we are hoping to demystify some of the trickier aspects of buying, selling and owning a home.

In this edition, one of our lawyers discusses the legal considerations of buying a condo or townhome.

Dear Edina Realty Legal,

I’m thinking about downsizing and buying a townhome or a condo.  How is that any different from buying any other house?

Any homeowner shoveling a foot of snow or addressing roof damage caused by a storm has probably considered buying a condo or townhome. The principal benefit of these types of properties is that much of the maintenance is handled by an Association — or in other words, someone other than you.

In Minnesota, most townhomes and condos are subject to a set of laws called the Minnesota Common Interest Ownership Act (MCIOA).The MCIOA requires the seller to provide purchasers with substantial documentation concerning the Association. The MCIOA also gives purchasers a 10-day right to cancel their purchase agreement following receipt of the documents. As a buyer, you’ll need to review those documents carefully. Here are a few insights on what you should look for.

Look for potential costs of owning the unit

The freedom from certain maintenance obligations doesn’t come free of cost. Here are some things you should look for to better understand those costs:

  • Check the documentation to see what the regular Association fee and due date is; they should both be disclosed within. Typically, fees are charged monthly.
  • See if there are any plans for large improvement or repair projects. A share of these costs could be assessed to you in addition to your typical monthly fees.
  • You should be given a current budget for the Association. Review the budget to determine if there are sufficient reserves to handle unexpected maintenance costs.
  • Understand what the Association is required to maintain and what is considered your responsibility as an owner.
  • Is the Association involved in a lawsuit? The documents should tell you whether it is. A lawsuit, even a successful one, could result in costs assessed to you and could also be an indication of potential maintenance issues. 

Look for rules that may affect how you wish to use your home

Unlike a traditional single-family home, there may be restrictions on how you can use your townhome or condo. Some key restrictions may include:

  • A prohibition or limitation on pets
  • Restrictions on how your unit can be altered or improved
  • Limitations on renting the property
  • Not allowing the property to be used for a home business

The documents you receive as part of your townhome or condo purchase contain vital information.  Be sure to take the time to read them, so you can ensure you are able to use the residence as intended (and keep your pets close by after the purchase).

The Edina Realty Legal Department serves as in-house counsel for Edina Realty and does not represent private clients.  This Insight is not intended to provide legal advice.

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