A “common-interest community” is one in which you buy an individual unit but have access to shared facilities. They include condominiums, townhomes, coops, and other housing developments comprised of individually owned units, in addition to shared facilities and common areas. In a common-interest community, you pay an annual assessment to cover the upkeep of the shared facilities and common areas. The annual assessment may also cover other services such as lawn care, snow removal, property insurance, and television and internet service.
Minnesota law, specifically the Minnesota Common Interest Ownership Act (MCIOA), applies to most common-interest communities throughout the state. MCIOA is a state law that was enacted in 1994 and that provides authority for all common-interest community action. It contains sections to deal with problems and issues that commonly affect common-interest communities. For example, MCIOA gives clear definitions and provisions related to assessments, maintenance and repair obligations. It also gives common-interest communities greater rights to implement enforceable rules and regulations, the ability to assess individual unit owners for repairs and improvements that affect only some units, and special lien and foreclosure rights. MCIOA applies in whole or in part to all condominium associations. And MCIOA also applies to most other common-interest communities (townhouse associations, etc.) created on or after June 1, 1994. And MCIOA applies to older common-interest communities that have chosen to “opt in” to the law. Under MCIOA, common interest communities must be governed by a board of directors, usually elected. In new common-interest communities, the developer can control the board of directors for a period of time until it “turns over” governance to the homeowners.
Also, most common-interest communities are governed by a nonprofit corporation subject to the Minnesota Nonprofit Corporation Act. And common-interest communities must also follow applicable federal and state laws, such as the Federal Fair Housing Act (“FHA”) and the Minnesota Human Rights Act (“MHRA”).
The most important thing to remember when buying a condo or townhouse is that you are agreeing to certain limitations on your property rights. Common-interest communities are subject to a set of governing documents – i.e., the Articles of Incorporation, the Declaration, and the Bylaws – that contain certain restrictive covenants and conditions of use for the individual units and shared facilities. For example, the governing documents may restrict leasing, pet ownership, smoking, or business activity. You should be aware of the terms and conditions in the governing documents, as there can be legal consequences for failing to abide by them.
Living in a common-interest community isn’t for everyone – while many residents find it relaxing to know they don’t have to deal with issues such as snow removal, others find the idea of having limits placed on what they can do with their property unappealing.
At Smith Jadin Johnson, PLLC, we help common-interest communities and homeowners navigate the law and their governing documents, and work to resolve sticky issues before they become a real problem. To find out more about the specific laws governing common interest communities in Minnesota, contact Smith Jadin Johnson today.