Buying a Condo or Townhome? Read the HOA Financials Before You Buy
MN Home Buyers Connection
October 7, 2026
You walk into a sunlit townhome in the Twin Cities. The layout is perfect, the kitchen is updated, and the location is exactly what you want. You glance at the listing sheet and see a reasonable monthly Homeowners Association (HOA) fee. It fits perfectly into your budget. But before you make an offer, you need to pause.
While some homebuyers actively search for properties without HOAs to avoid restrictive rules, finding a modern home completely free of association oversight can be highly challenging in today's market. When buying a condo in Minnesota HOA communities, that monthly fee is only the cover of the book. The real story is hidden inside the association's financial documents. Whether you are a first-time buyer looking for an entry point into Minnesota real estate or a retiree ready to downsize, understanding these numbers is the difference between a smart investment and a stressful financial surprise.
Why the Monthly HOA Fee Is Only Half the Story
A low monthly fee might look attractive, but it can actually be a warning sign. Associations use monthly dues to cover regular operating expenses. This includes snow removal, lawn care, master insurance, and minor repairs. It is also important to note that certain community amenities, such as shared swimming pools, require expensive liability coverage. These amenities can quickly drive up master insurance premiums and increase your regular monthly fees.
If the fee is too low, the association might not be saving enough money for major future repairs. When it comes time to replace the roof or repave the parking lot, the HOA will have to issue a special assessment. A special assessment is an unexpected, mandatory bill charged to all owners to cover large expenses. In some extreme real-world cases, homeowners have been hit with sudden, emergency special assessments of $26,000 or more for urgent structural repairs. A thorough condo association financial review helps you spot the risk of a sudden, budget-draining bill before you close.
The Importance of the Resale Disclosure
Minnesota law provides a safety net for buyers. When you buy a condo or townhome, you have the legal right to review the HOA resale disclosure document Minnesota requires sellers to provide. Once you make an official offer, Minnesota law requires these comprehensive HOA documents to be fully available to buyers for careful inspection. This document gives you a snapshot of the association's health.
The resale disclosure certificate will tell you several critical things.
Current and approved future regular assessments.