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Ben Aughenba…, Real Estate Pro in New York, NY

Minneapolis - Condo Fees

Asked by Ben Aughenbaugh, New York, NY Mon Jul 23, 2007

I am looking to purchase a property with high annual and monthly association fees. What do these costs justify i.e., heat, water, electric?

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As part of your due diligence period after acceptance of your contingent offer the seller is required to get copies of the HOA annual operating budget, along with minutes of recent meetings, copies of rules and bylaws, disclosure of any litigation by or against the HOA, and several other items. Your offer should include a contingency clause that you receive and approve of these documents within a short time after the acceptance of your offer. Sometimes these documents may be available to you even before your offer is formally accepted. It doesn't hurt to ask. Because there may be an expense involved in getting these disclosures to you, The seller and the agent will want to perceive that you are a serious buyer. Depending on the HOA these fees may include building insurance and maintenance, snow removal, landscaping, garbage removal, reserve accounts for future big ticket maintenance items such as roof, siding, parking lot. accounting fees, consulting fees, office supplies. There may be community areas, billiards, ping pong,and exercise equipment, tennis courts, swimming pools. If excessively high - the dues may also be paying for some past, ongoing or future litigation, maintenance above originally projected or even mismanagement. Some HOA's have been victimized by fraudulent contractors and have wound up paying for repairs twice. If HOA dues are particularly highcompared to other condo associations with the same level of amenities and services then you should be able to negotiate an appropriate discount from the purchase price to compensate for the higher future monthly costs.

My theoretical example would be: Condo A has $300 per month dues and Condo B has $200 per month dues. In all other respects the condos are equally desirable. You discover that the reason for the higher dues is that condo A just repaved the parking lot, but did not have a reserve to pay for it.. The HOA borrowed the money and is now paying it back with 2 ears left on the loan. Condo B HOA also has repaved their parking lot, but paid for it out of reserves built up over previous years.
Because you will be paying the extra $100 per month for two years you should be able to buy the equally desirably condo A for about $2400 less than you could buy condo B.
1 vote Thank Flag Link Mon Jul 23, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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I also has access to all currently listed properties in the entire Twin Cities metropolitan area including condominiums, town homes, foreclosures, single-family homes, apartment buildings, investment properties, land & lots, commercial properties and waterfront properties.
Web Reference: http://www.condo.com/lane
0 votes Thank Flag Link Fri Sep 4, 2009
I am the exclusive and experienced condo agent in MN for Condo.com.

Please visit http://www.condo.com, you can search the condos based on your preferred living area. Or you can contact me directly.
Web Reference: http://www.condo.com
0 votes Thank Flag Link Fri Sep 4, 2009
The answer really depends on the building within Minneapolis. Certain newer projects are going to have higher dues but include more in terms of amenities which some buyers value as part of the downtown lifestyle. Other buyers in the market don't need so many amenities and therefore can find buildings with lower association dues. The bottom line is every building is going to have different reasons for the association dues being high or low. Working with a downtown agent that can articulate those differences is the key!
0 votes Thank Flag Link Fri May 8, 2009
Give me the address and I will tell you if it is normal.
Web Reference: http://www.JoeNiece.com
0 votes Thank Flag Link Fri Jun 20, 2008
Watch out, high condo fees will hurt your resale. Be sure to look over the condo docs, you will have ten days to review them after you recieve them. They will spell out what is covered by the association, how much each item cost per year, how much is in reserves etc. Try to determine if there is a max amount the fees can go up each year. Even if there is they could do a assessment for repairs or improvements down the line.
0 votes Thank Flag Link Sun Oct 7, 2007
The things that normally move fee's up are elevators, heat and air conditioning, pools, shared rooms etc. e-mail me what you are looking at and I will send you everything that is comparable for fee's and you can determine if you are getting enough for the money you are spending.
0 votes Thank Flag Link Sun Sep 30, 2007
One of the largest expenses of condo fees is insurance which covers the exterior into your walls. Everything inside your units walls will need to be insured by you. Other fees seen in Minneapolis include maintenance of the common elements like gyms, pools, meeting areas, foyers, etc, as well as landscaping in the summer and snow removal in the winter. Many condos in downtown have underground garages so some of the fees might go to upkeep of these areas as well.

What ever you do review the documents well and make sure the condo association is well established. This might be hard for a new development but ask your agent for the names of those that sit on the board and feel free to contact them with any questions you might have.

In Minnesota, you have 10 days to cancel the contract after you have received the condo docs. Visit the MN Statues page for more info : http://www.revisor.leg.state.mn.us/bin/getpub.php?pubtype=ST…
0 votes Thank Flag Link Wed Jul 25, 2007
I recommend consulting a real estate agent with experience in your specific market. They should be able to look through the association documents and be able to tell you if the costs are within market norms.
0 votes Thank Flag Link Mon Jul 23, 2007
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