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Burns & Hansen, PA

Twin Cities Homeowners Associations Face Big Challenges

Homeowners are still hurting in the aftermath of the Great Recession and the real estate downturn that went along with it. In the Twin Cities area and across the country, many homeowners are underwater on their mortgages. Others are not only underwater, but behind on their payments and facing foreclosure.

In short, it's still tough out there.

It isn't only homeowners who are hurting, either. So are many homeowners associations in Minneapolis and elsewhere. Associations are increasingly dealing with members who are frustrated on many levels - starting with the fact that their dues are going up while the values of their units goes down.

In most respects, the purpose of homeowners associations remains the same, despite the downturn in the market. Associations collect dues from residents to take care of common needs like lawn mowing and snow removal. They also create and enforce rules on use of individual units, such as whether residents can have pets, put up gaudy holiday lights, or rent out their units to others.

Rules against renting, in particular, have become a flashpoint for legal challenges at a time when distressed sales of neighboring units can easily reduce the value of neighboring units. Patrick Burns was quoted this week in the Star Tribune on issues faced by cash-strapped associations.

"You've got associations that can't do routine maintenance," Burns told the Star Trib. "Folks are cash-strapped. You raise somebody's dues $100, that's like raising taxes," he said.

Burns has seen many homeowners associations that are close to bankruptcy, as the problems of financially struggling homeowners become reflected in struggling associations.

Source: "Condo associations feel the heat as fees rise, values sink," Star Tribune, 12-12-11

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