Thinking about buying a Townhome or Condo? Look Closely at the HOA

Thinking about buying a Townhome or Condo? Look Closely at the HOA

As a real estate agent with extensive experience in helping people find their ideal homes, I can tell you there’s more to buying a townhome than meets the eye. While the home-buying process is largely similar to purchasing a single-family home, buying a townhome comes with its own unique set of considerations—especially when it comes to the HOA, or homeowners association. It’s one of the most important factors that can impact your enjoyment and investment in a townhome. In this article, I’ll break down the key HOA aspects you need to think about, research, and fully understand before making an offer.

What is an HOA, and Why is it So Important?

If you’re new to the term, HOA stands for homeowners association. When you make an offer on a townhome, you’ll likely enter into an agreement with an HOA, a group of homeowners in your community that sets and enforces rules for everyone’s benefit. In Minnesota, you have a 10-day right of rescission period to review all HOA documents before you’re committed. During these 10 days, you can thoroughly review the rules, fees, and conditions that will govern your new living space, giving you a chance to understand how the HOA operates.

This period allows you to ask questions, contact the HOA’s management company, and even reach out to current residents to get a feel for how things are managed. Some associations are organized and transparent, while others may be more challenging to work with—this is valuable insight for making an informed decision.

Understanding HOA Fees and Voting Rules

One thing to remember about HOAs is that they often operate on a voting basis. Typically, any changes to the HOA’s policies or fees require a 67% majority. While this seems fair, non-voters count as “no” votes, which can create a roadblock to necessary updates and repairs. If repairs are needed and enough residents don’t vote to approve funding, everyone could end up with hefty assessments to cover these costs.

If you’re the type who wants a voice in the community, consider joining the HOA board after moving in. It can be a great way to protect your interests and contribute to your community.

Rising Insurance Costs in Older Buildings

HOA dues often cover insurance for the building’s structure. However, if you’re looking at a townhome or condo that’s over 30 years old, be aware that insurance premiums may be higher, with additional costs added to your HOA dues. Insurance companies tend to adjust coverage and increase deductibles as buildings age, which can significantly impact your costs.

To avoid surprises, read the HOA’s insurance policy closely and, if needed, contact the insurance company directly for clarification. Additionally, it’s wise to supplement the HOA’s insurance with a personal homeowners policy to cover your belongings, as the HOA’s policy only protects the building itself.

Protecting Your Investment with Additional Insurance

One insurance aspect that’s often overlooked is the HOA master policy’s deductible. Unlike single-family homes, where your insurance covers most repair costs after the deductible, townhome owners may be on the hook for a portion of the master policy’s deductible—sometimes as high as $10,000.

Adding coverage for this deductible to your personal homeowners policy costs around $100 per year, a small price for peace of mind if something were to happen.

Using the 10-Day Right of Rescission Wisely

The 10-day rescission period starts once the HOA documents are delivered by the listing agent. This window allows you to review all documents, dig into the fine print, and cancel the contract for any reason. This period is your opportunity to assess whether the HOA’s fees, rules, and policies align with your lifestyle. Maybe the HOA fees are higher than expected, or you discover that guest parking is restricted—whatever the reason, you have the freedom to withdraw from the purchase during these 10 days without penalty.

The Importance of a Well-Maintained Community

One last tip: pay attention to the community’s overall upkeep. When you arrive for a showing, look around—are the buildings and common areas well-maintained? Do the garage doors and exterior spaces look tidy, or are there signs of neglect? How an HOA maintains common spaces is often a sign of how proactive it is in managing property and protecting property values.

Let Me Help You Find the Right Fit

Buying a townhome is an exciting decision, but it’s crucial to do your homework—especially with the HOA. I’m here to guide you through every step, from evaluating the HOA documents to assessing the overall condition of the community. With my experience, you’ll have an advocate by your side to ensure that you’re fully informed and confident in your choice. Let’s get started on finding your ideal townhome today!

#TownhomeBuyingTips, #HOAGuide, #RealEstateAdvice, #FirstTimeHomeBuyer, #TownhomeLiving, #HomebuyersJourney, #RealEstateAgent, #TownhomeCommunity, #MinnesotaRealEstate, #BuySmart