FAQ
Condominium and Townhomes:
Frequently Asked Questions
What is the difference between a condominium and a
townhouse?
This refers to an ownership concept rather than a housing style.
Both are owned individually and have
an association to share the luxuries of maintenance, security, and recreational extras
that would cost
much more on an individual basis. In townhome living, the owner holds title to a
parcel of land and
the building on the land, exclusive use of their limited common areas, and use of the
association
common areas. As a condominium owner, you receive title to a particular unit defined
in the
association documents, and an equal proportionate interest and use of the common areas.
Why are the association fees higher in
condominiums than townhomes and vary so much
between developments?
Condomimiums usually include more utilities in their
fees and have more shared amenities. Some of the
factors that may impact the fees include the age and condition of the buildings, the
number of units to
share the costs, and adequate reserve accounts for long term maintenance. With each
association being
different, here is list of what might be included:
Heat
Garbage removal
Air conditioning
Basic cable TV
Building insurance
Landscaping
Electricity or gas
Outside building mainenance
Sewer and water
Replacement reserve accounts
Snow removal
Pool maintenance
Lawn care
Elevator service
Professional Management
Legal costs
Accounting services
Staff
salaries
Cleaning services
Caretaker's
unit ( PITIA )
What are association special assessments?
A homeowners association has the right according to
their association bylaws to levy a special
assessment just like city governments. If there isn't enough money in reserve
accounts for a
maintenance expense, the association usually has no choice but to raise the
association fee for a certain
period of time or levy special assessment to pay for it. A well run association will have
all future long
term maintenance items accounted for, and reserve accounts figured in their budget.
What type of association amenities are
included?
Townhomes usually have few to none, while
condominium amenities might include:
Indoor or outdoor pool
Game room
Tennis court
Racquetball court
Party room
Hobby room
Exercise room
Volleyball court
Whirlpool
Playground
Sauna
Golf putting green
Guest room
BBQ
area
Storage areas
Security system
Do I need to purchase separate homeowners
insurance?
Condominiums have a blanket policy for building
insurance and it is included in the association fee.
Coverage for your personal property is not included and is optional, but
recommended. In townhomes
some associations have a blanket building policy and others do not, and you would
need to purchase a
separate policy just like in a single family home.
Can I bring my pet with me when I move?
The policy on pets would be stated in the rules and
regulations or bylaws. Apartment style
condominiums are the most restrictive, usually not allowing dogs, and only about one third
of the
developments allow cats. Manor style condominiums will usually take cats and dogs up to
25lbs.
Townhomes typically are OK with either as long as you follow the conduct rules.
What is the 15 day right of recision when I
purchase?
Under the Minnesota Common Interest Ownership Act (
MCIOA ) a purchaser receives a 15 day
right of recision to cancel a sale. The law covers all condominiums, townhouse
associations created
after June 1, 1994 and other associations if they elect to be subject to the law.
The seller is required to
provide the buyer with a copy of the bylaws, articles of incorporation, declarations,
covenants, rules
and regulations, the most recent budget and financial statement , and a resale disclosure
certificate
prepared by the management company or the association's authorized
representative. The recision
period starts from the day the purchaser receives the documents, and the buyer may choose
to cancel
the sale for any reason.
What type of mortgage loan can I obtain on a
condominium or a townhome?
The financing of a condominium or townhome is different than getting
a new mortgage on a single
family home. The whole development, or phase in which your unit was built, needs to
have PROJECT
APPROVAL for the particular type of financing you are obtaining. The different types
of approvals are FHA, VA, FNMA, and FHLLB. The governing bodies approval is for a
certain
period of time and require the homeowners association to reapply to keep their approvals
current.
They must meet owner occupancy ratios, have required minimum reserve accounts, meet
property
construction standards and other guidelines.
