Legal Question in Real Estate Law in Minnesota

Re: Townhome association Reserve

As part of its annual budget, the assocation should include as part of the annual assessment contributions to a reserve fund sufficient amounts to provide for the periodic maintenance of those things the association is responsible to maintain. In a townhome association, this is typically maintenance of the Common Elements and certain exterior maintenance of the Units, as further defined in the Declaration of Covenants for your particular association.

The Board may want to consult legal counsel to review the scope of the Association's maintenance responsibilities and further assistance regarding the Board's powers and duties.

Feel free to email me directly with further questions.

Re: Townhome association Reserve

Minnesota Statutes section 515B.3-114 states that a community association’s annual budget shall provide for “adequate reserve funds” to cover the replacement of those parts of the common interest community which the association is obligated to replace. In order to calculate the proper amount of reserves for the association, it is my recommendation that the association's board of directors hire a third-party consultant to conduct a reserve study and provide the association's board of directors with the proper amount of reserves that the association should currently have in its possession as of that date, and to additionally advise the association's board of directors on the proper amount of reserves that the association should be accumulating from its Owners (and to be included in the annual assessment) going forward.

You may find my law firm's community association website to be a good resource for future issues: www.mncommunityassociation.com