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Aitkin County Town homes, Condos, Planned Unit Developments-

Offer affordable lakefront, country, or residential living. Weather you

 are thinking of retirement, investment, or recreational fun, the

 town home/condo life style may be what you are looking for. From

 Mille Lac Lake to Big Sandy lake-Aitkin County and all the surrounding

 lakes area has endless town home/condo opportunities.
        
Most town home or condominium developments in the Aitkin Lakes Area

 include as part of the ownership contract mandatory membership in some

 type of a governing home owner association. These organizations are

 governed in Minnesota by the Minnesota Common Interest Ownership

 Act (MCIOA). These associations have varying power and authority

 which are governed by adopted bylaws. In most cases a Board of Directors

 is responsible for maintaining a quality of life for the enjoyment of all

 owners. They are also required to run a fiscally responsible not-for-profit

 organization and protect the investment of the owners. If not properly

 constructed or administered, these responsibilities can lead to disputes

 and liability.

Condo's, town homes and some single-family communities are

 common-interest developments. You own your unit, or at least everything

on your side of the walls. But you also own a share in common areas, and

 sometimes also the exterior walls of living units - and you're responsible

 for their upkeep.

                         Representation in buying a Condo or Townhouse                                       
                            Lakeshore-Residential-Non Lakeshore
                      You Need Solid Answers to the Following Questions:

Homeowner Associations Financials

Buying a Condo or Town home is like buying shares in a nonprofit

Real Estate holding corporation. You don't just buy a home, you enter

 into a partnership. Check the Associations financials before buying.

Assessments

What does and doesn't the assessment cover—common area maintenance,

 building exterior-roof maintenance, recreational facilities, trash collection,

 snow removal?
Lakeshore-boat docking rights?  Spring and fall dock maintenance.


What special assessments have been mandated in the past five years?

 How much was each owner responsible for? Some special assessments

 are unavoidable. But repeated, expensive assessments could be a red flag

 about the condition of the building or the board's fiscal policy.

Guided by a board of directors, the HOA manages dues and other money

 collected to fund the annual budget. Monies are dispersed for repairs and

 upkeep of common areas, buildings, other structures, landscaping, lighting,

 walks, paving, pools, decks and the like, and other operating expenses.

 If a shortfall develops, the HOA looks to homeowners for more funds,

 usually by special assessment. This one time fee or short-term increase

 to monthly dues can run thousands of dollars per owner.

Percent of Reserves Funded

How much does the HOA have in reserves, and what percent of its obligation

 is that?

A part of the HOA's budget called the Reserve Fund, available from

 HOA management, reveals how much cash is available for future obligations.

 The level of reserves is based on the size, age, construction type,

 maintenance level and type of community. The American Institute of

Certified Public Accountants recommend associations conduct annual

 reserve studies to gauge fiscal fitness, but only a few states mandate them.

 Generally, if an HOA has 70% or more of the reserves a study said it needs,

 it's in good condition and there's little chance of an assessment.

With 30% to 70% funding, reserves are in fair condition and an assessment

 may be needed. Under 30%, the reserves are in poor condition and an

 assessment is likely.

Is the project in litigation? If the builders or homeowners are involved

 in a lawsuit, reserves can be depleted quickly.

Owner-Occupancy & Delinquencies

What percent of living units are owner-occupied?

What percent of owners are 60 days or more delinquent in

 their dues?

Low reserves aren't the only assessment risk. More owner-occupied

 units foster a community's well-being. With 75% or more units

 occupied by owners, conditions are good. At 60% to 75%, more upkeep

 may be required. Below 60%, there's a greater risk not only of extra

 assessments, but less community participation and more infractions of

 association rules.

Monthly dues fund the HOA budget. If 5% to 10% of dues are late, it's

 a warning call. More than 10% late is a red flag signaling poor budget

 management and more risk of assessment.

What covenants, bylaws, and restrictions govern the property?

What grandfather clauses are in place? You may find, for instance, that

 those who buy a property after a certain date can't rent out their units,

 but buyers who bought earlier can. Ask for a copy of the bylaws to

determine if you can live within them. And have an attorney review

 property docs, including the master deed, for you.

Disclaimer: We are advising you that the Questions listed are
 opinions only. Please consult your attorney, and/or accountant

for advice and consulation.

                 Frequently Asked Questions

Q: What is a Condominium (Condo)?

With a condominium you own the space within your walls, floors and ceiling
 with a common ownership interest in the common areas,
which are owned by all owners. The association exists to operate and
 manage the common elements. Most commonly seen condo's are
"stacked" format but may appear in "town home" style as well.


Q: What is a Townhome?

With a townhome you own the space within your walls and the ground beneath
 the townhome. Row or quad style is the most common. Usually there are
separate entrances and garages. The lot line normally bisects the
 "party wall" between the units.

Q: What is a Co-op?

Co-op is a form of ownership. Owner holds a proprietary lease or occupancy
agreement for their living unit. With a co-op the building is thought of as
a company with each owner owning a percent share of the building
based upon your units value, (Owner owns stock and is a member in the cooperative).

Designated “age over 55” facilities may be specific in identifying their members. 

Q: Planned Unit Development?

Owner owns their lot and the living unit, The association owns:
(i.e. tennis courts, streets, tot lots, out lots with entrance signs).

A common interest community that is not a condominium cooperative.

Normally identified in a stand-alone-home format. Brought together
for the purpose of sharing maintenance costs associated with the
 limited common elements or facilities and/ or lots owned
specifically by members of the association.

Q: Architectural Controlled Community (Conservation Neighborhood)

Same as the single family home neighborhood with specified areas held out
 as “green space” (Conservation Neighborhood-more common space, fewer homes).

Q: What are Common Elements?

Common elements are the elements of the unit or property that are shared
 and maintained by the association. It is very important that you
now what is the association's responsibility and yours. Most exterior elements
 are considered common such as roofs, sidings, walkways and driveways.
However, if you roof leaks and causes damages, your association may
 only be responsible for repairing the roof. Always check your
 association guidelines for the specifics.

Q: Do I need an inspection if I'm buying a Townhome or Condominium?

Definitely. Your inspector will report on the elements that you will be
 responsible for such as cooling and heating systems, electrical and
 plumbing systems as well as walls, ceilings, floors and structure.

Q: What is an Association?

An association runs and manages the affairs of the buildings. Be sure
 and learn everything you can about the homeowners association before
 you buy into a development governed by one. The association's financial,
 political and legal condition is very important to your investment and quality of life.

Q: What is an Association Fee?

Association fees are the fees you pay to live in the building. Fees are
 usually paid monthly. If you do not pay the association can take legal
 action and enforce a lien and foreclosure of your unit.

Q: What is a Special Association Assessment?

The association can, according to the association bylaws, levy a special
assessment. If there isn't enough money in reserve accounts for maintenance
 expense, the association can levy special assessment to pay for it. The
 association should be so well run that they should have all future long
term maintenance items accounted for and reserve accounts figured in their budget.

 Q: What is the Role and Responsibility of the Owners?

The owners elect and/or remove directors, amend governing documents
(some cannot be amended), and act according to rules and regulations.

Q: What is the Role and Responsibility of the Board of Directors?

The Board makes decisions, has a fiduciary duty to act in the best interest
 of the entire community, financial management of the association funds,
 including reserve funds, sets rules and regulations, maintains appropriate
insurance as required in the governing documents, manages association
employees and maintains and enhances the physical property,
common areas and facilities.

Q: What type of Insurance is needed?

Condominiums usually have a blanket policy or building insurance and
 it is included in the association fee. Coverage for your personal property
is not included and you would need to get your own insurance. In townhomes
some associations have a blanket policy and some do not. You would need
to purchase a separate policy. Be sure and check with your insurance
agent and the association to see what insurance they have and what
 insurance you will need.

 Q: Do condos have to be made accessible to the disabled?

The 1990 Americans with Disabilities Act does not require strictly residential
 apartments and single-family homes to be made accessible. But all new
construction of public accommodations or commercial projects
(such as a government building or a shopping mall) must be accessible.
 New multi-family construction also falls into this category.
In all states, the Federal Fair Housing Act provides protection against
discrimination for people with physical or mental disabilities.
 Discrimination includes the refusal to make reasonable modifications to buildings
that aren't accessible to the disabled.

Q: Can condos ban smoking?

A homeowners association's board of directors can restrict smoking
 if it applies to indoor common spaces such as hallways or recreation rooms.
 Outdoor spaces are a different story, say legal experts. 
restriction would probably hinge on local laws
(i.e. if a city banned smoking outdoors, a homeowners association
probably could restrict smoking in its outdoor spaces). Typical covenants,
codes and restrictions (CC&Rs), which govern condo associations,
give the board authority to make and enforce reasonable rules for the use
of common property. But that would not apply to interior spaces
owned by smokers themselves. 

Q: Can a condo association ban nudity?

Could you sunbathe in the nude on your own balcony? Not necessarily.
In a condominium development, a balcony is not considered private property
but common property assigned to your exclusive use -
but a common area nonetheless.
Covenants, codes and restrictions (CC&Rs) usually spell out what activities
can and cannot be conducted on common property. Some associations
prevent people from barbecuing on their balconies or hanging large plants
from the railings. However, the larger issue of regulating personal conduct is
not so clear-cut. It literally depends on what side of the fence you're on.
If the sunbather can be seen from a public vantage point -- not by someone
who must climb a tree or peer through binoculars -- then the rule probably
would be considered reasonable, say legal experts.

Incidentally, there are places where nudity is tolerated but again,
only out of public view.

Q: Are condos a good investment?

Condominiums have held their value as an investment despite economic
downturns and problems with some associations. In fact, condos have
appreciated more in the past few years than when they first came on the
scene in the late 1970's and early 1980's, experts say.
While there are lots of reports about homeowner’s association disputes and
construction-defect problems, the industry has worked hard to turn its image
around. Elected volunteers who serve on association boards are better
trained at handling complex budget and legal issues, for example,
while many boards go to great lengths to avoid the kind of protracted
and expensive litigation that has hurt resale value in the past.
Meanwhile, changing demographics are making condominiums more attractive
investments for single home buyers, empty nesters and first-time buyers
in expensive markets.

Q: Can I have a dog? (Pets)

Yes, the homeowners association can restrict pets. Some associations
allow dog ownership under a certain weight and size.

Disclaimer: We are advising you that the FAQ's listed are opinions only.
Please consult your attorney, and/or accountant for advice and consultation.


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Phone: 218 - 821 - 4775
Fax: 218-454-4301 sales@aitkinrealestate.com
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