Most Minnesota residents who buy a condominium are excited because it appears to be a simple real estate investment — one that they don’t have worry about taking care of like a stand-alone home. Nevertheless, if you’ve never owned a condo before, you might be surprised by a few legal hurdles that could pop up during the purchase of the property and after.
For one, lenders tend to be more hesitant about granting a mortgage for a condo. Often, the lender will want to know what percentage of the units have been filled with owners. They usually want at least 90 percent of the units to have owners. In addition, the bank may want to ensure that a single owner cannot buy over 10 percent of all the available units. There are other requirements that are different from normal home mortgages, so it’s important to discuss these requirements with your mortgage lender.
Another important complication relates to homeowners’ association (HOA). Your condo’s HOA could be good, or it could be very bad. Before joining the condo, be sure to attend an HOA meeting to gauge it’s culture. These are the people you will have to deal with any time an issue comes up relating to noise and certain maintenance and upkeep standards. Also ask whether people are happy with the HOA when you attend the meetings and review their financial records to check for delinquencies, money in reserve and late payments.
Evaluating a real estate transaction related to a condo is important for all Minnesota condominium shoppers. Sometimes, though, the information that needs to be considered can be overwhelming. This is where an experienced real estate lawyer can help you navigate the process effectively to avoid future condominium complications later on down the line.
Source: Investopedia, “Condo Complications: The Issues Behind Ownership,” Diane Hamilton, Ph.D, accessed March 10, 2017