What to Look for in HOA Documents Before You Buy a Townhome or Condo

Buying a townhome or condo means you are not just buying a home. You are buying into an association, with its own rules, its own budget, and its own plans for your money. In more than 24 years of selling homes in the South Metro, I have watched deals fall apart over things that were sitting in the HOA documents the whole time, and sometimes over things that were simply wrong in the listing.

Here is what I look for when reviewing HOA documents, and exactly how I protect my buyers before they ever sign their name.

1. Don’t Trust the Listing Alone. Verify What Matters to You.

This one surprises a lot of buyers. The information in a listing is only as good as the agent who entered it. I have seen many situations where the listing agent never called the association to verify anything, and the details were wrong.

The monthly fee is wrong. The number in the listing doesn’t match what the association actually charges.
Pet rules are missing or incorrect. Weight limits, height limits, and breed restrictions often aren’t in the listing at all.
What the fee covers isn’t spelled out. Buyers assume it covers things it doesn’t.

I have had several clients back out of a deal after we found out, while reviewing the HOA documents, that their larger dog wasn’t allowed. That is a hard way to learn it, after you’ve already pictured your life in the home.

So here is what I do now. If something is important to you, like your family pet, I call the association directly before we write an offer. If it’s a deal breaker, we find out before you fall in love with the home, not after.

2. Is Hazard Insurance Included in the Monthly Fee?

This is the first question I ask on any association property. In most townhome communities in Lakeville, Apple Valley, Farmington, and Rosemount, I see hazard insurance included in the monthly association fee. But there are some developments, more often in Eagan, where it is not.

When hazard insurance isn’t included, the fee looks cheaper on paper. In reality:

You pay the monthly association fee, plus a separate monthly cost for your own homeowners insurance on the structure.
Put together, that home is often more expensive each month than one with a higher fee that includes the insurance.

Always compare the total monthly cost, not just the association fee. I break this down in this short video:

Watch on YouTube: Is the cheapest HOA always the best deal?

3. Know Your 10-Day Review Window in Minnesota

Minnesota gives buyers real protection here, and it’s important to understand how it works.

You have 10 days to review the HOA documents after you receive them, and you can cancel during that window without penalty. Your earnest money comes back to you.
The 10 days don’t start until everything has been provided. If pieces are missing, the clock hasn’t started yet.
One key piece is the resale disclosure certificate, prepared by the association. It summarizes the fees, any assessments, and the financial picture of the association.
As part of the process, you’ll sign an acknowledgment that you received, read, and reviewed the HOA documents, and that you are responsible for the monthly association fee.

Use those 10 days. Don’t just sign and move on. And the review doesn’t always end once the contract is signed, which I explain here: Is the HOA review finished once the contract is signed?

4. Read the Meeting Minutes. Your Lender Will.

Meeting minutes are where you find out what’s coming. Planned projects show up in the minutes long before they show up in your bill.

I have seen many situations where the lender asks for the meeting minutes and discovers something like this: next year, the association plans a $100,000 project to rebuild a retaining wall. Now the lender wants answers before they’ll move forward:

Is there enough money saved in the reserve account for that project?
Where is the money coming from?
How will the cost be distributed among the owners?
Will their borrower have to pay anything out of pocket?

That’s exactly what you should want to know too. While you’re in the minutes and financials, also look at:

Reserve funds and reserve study: Is the association saving for roofs, siding, roads, and other big items, or hoping for the best?
Special assessments: Have any been issued recently, or are any being discussed?
The budget: Does income cover expenses, or are they running short each year?
Litigation: Is the association involved in any lawsuits? That can affect financing and future resale.

5. Find the Master Policy Deductible and Cover It

The association’s master policy covers the buildings, but it comes with a deductible that the owners share.

Here’s an example. Picture a set of townhomes where every owner has a $10,000 deductible under the master policy. The moment that master policy comes into play, every owner has to come up with that money if the building is damaged.

That’s why I tell every buyer:

Get an HO-6 policy to cover your personal belongings and the interior items you’re responsible for.
For a small extra cost each year, ask your agent to add coverage for the master policy deductible (often called loss assessment coverage).
Check the HOA documents for the exact deductible amount so your insurance agent can set your coverage correctly ahead of time.

If the worst ever happens, you’re covered and not scrambling to come up with thousands of dollars.

6. Rules That Affect How You’ll Actually Live There

The declaration, bylaws, and rules and regulations spell out your rights and responsibilities. Before you commit, make sure you can live with:

Pet rules: number of pets, weight or height limits, breed restrictions
Rental rules: limits on renting your unit, or bans on short-term rentals
Parking: guest parking, boats, trailers, extra vehicles
Exterior changes: what needs approval before you add a deck, change a door, or plant a garden

If you plan to rent the home out someday, ask now. Those rules can decide whether the home fits your plans at all.

How I Handle HOA Documents for My Clients

When I list a home: I read the entire HOA packet, then call the association to double check the monthly fee, exactly what it covers, and the rules on pets, rentals, and other things buyers ask about most.
When I represent a buyer: I verify anything that matters to you before we write an offer, then go through the full packet with you inside your 10-day window so nothing surprises you after closing.

The documents are only useful if someone actually reads them and makes the phone call. That’s my job.

Thinking About Buying a Townhome or Condo?

If you’re looking at a home with an association, let’s talk before you write an offer. I’ll help you check the things that matter, read the documents with you, and make sure you know exactly what you’re buying into. Book a time that works for you:

Book an Appointment with Tom

Helping Buyers and Sellers Across the South Metro

Lakeville
Apple Valley
Eagan
Farmington
Rosemount