1.1 A bill for an act
1.2 relating to common interest communities; modifying rights and duties of common
1.3 interest communities; modifying rights of a unit owner; modifying termination
1.4 threshold; establishing a meet and confer process; modifying notice of meetings;
1.5 prohibiting certain governing bodies from requiring or incentivizing creation of
1.6 homeowners associations; amending Minnesota Statutes 2024, sections 394.25,
1.7 by adding a subdivision; 515B.1-102; 515B.2-103; 515B.2-119; 515B.3-102;
1.8 515B.3-103; 515B.3-106; 515B.3-107; 515B.3-108; 515B.3-110; 515B.3-115;
1.9 515B.3-1151; 515B.3-116; 515B.4-102; 515B.4-1021; 515B.4-116; Laws 2024,
1.10 chapter 96, article 2, section 13; proposing coding for new law in Minnesota
1.11 Statutes, chapters 462; 515B; repealing Minnesota Statutes 2024, section 308C.003,
1.12 subdivision 3.
1.13BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.14 ARTICLE 1
1.15 COMMON INTEREST COMMUNITIES
1.16 Section 1. Minnesota Statutes 2024, section 515B.1-102, is amended to read:
1.17 515B.1-102 APPLICABILITY.
1.18 (a) Except as provided in this section, this chapter, and not chapters 515 and 515A,
1.19applies to all common interest communities created within this state on and after June 1,
1.201994.
1.21 (b) The applicability of this chapter to common interest communities created prior to
1.22June 1, 1994, shall be as follows:
1.23 (1) This chapter shall apply to condominiums created under chapter 515A with respect
1.24to events and circumstances occurring on and after June 1, 1994; provided (i) that this
1.25chapter shall not invalidate the declarations, bylaws or condominium plats of those
1Article 1 Section 1.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1268
NINETY-FOURTH SESSION
Authored by Bahner, Mekeland, Howard, Igo, Moller and others02/20/2025
The bill was read for the first time and referred to the Committee on Housing Finance and Policy
Adoption of Report: Amended and re-referred to the Committee on Judiciary Finance and Civil Law03/10/2025 2.1condominiums, and (ii) that chapter 515A, and not this chapter, shall govern all rights and
2.2obligations of a declarant of a condominium created under chapter 515A, and the rights and
2.3claims of unit owners against that declarant.
2.4 (2) The following sections in this chapter apply to condominiums created under chapter
2.5515: 515B.1-104 (Variation by Agreement); 515B.1-105 (Separate Titles and Taxation);
2.6515B.1-106 (Applicability of Local Requirements); 515B.1-107 (Eminent Domain);
2.7515B.1-108 (This Chapter Prevails; Supplemental Law); 515B.1-109 (Construction Against
2.8Implicit Repeal); 515B.1-112 (Unconscionable Agreement or Term of Contract); 515B.1-113
2.9(Obligation of Good Faith); 515B.1-114 (Remedies to be Liberally Administered);
2.10515B.1-115 (Notice); 515B.1-116 (Recording); 515B.2-103 (Construction and Validity of
2.11Declaration and Bylaws); 515B.2-104 (Description of Units); 515B.2-108(d) (Allocation
2.12of Interests); 515B.2-109(f) (Common Elements and Limited Common Elements);
2.13515B.2-112 (Subdivision, Combination, or Conversion of Units); 515B.2-113 (Alteration
2.14of Units); 515B.2-114 (Relocation of Boundaries Between Adjoining Units); 515B.2-115
2.15(Minor Variations in Boundaries); 515B.2-118 (Amendment of Declaration); 515B.2-119
2.16(Termination of Common Interest Community); 515B.3-102 (Powers of Unit Owners'
2.17Association); 515B.3-103(a), (b), and (g) (Board of Directors, Officers, and Declarant
2.18Control); 515B.3-107 (Upkeep of Common Interest Community); 515B.3-108 (Meetings);
2.19515B.3-109 (Quorums); 515B.3-110 (Voting; Proxies); 515B.3-111 (Tort and Contract
2.20Liability); 515B.3-112 (Conveyance of, or Creation of Security Interests in, Common
2.21Elements); 515B.3-113 (Insurance); 515B.3-114 (Replacement Reserves); 515B.3-115(c),
2.22(e), (f), (g), (h), and (i) (Assessments for Common Expenses); 515B.3-116 (Lien for
2.23Assessments); 515B.3-117 (Other Liens); 515B.3-118 (Association Records); 515B.3-119
2.24(Association as Trustee); 515B.3-121 (Accounting Controls); 515B.4-107 (Resale of Units);
2.25515B.4-108 (Purchaser's Right to Cancel Resale); and 515B.4-116 (Rights of Action;
2.26Attorney's Fees). Section 515B.1-103 (Definitions) shall apply to the extent necessary in
2.27construing any of the sections referenced in this section. Sections 515B.1-105, 515B.1-106,
2.28515B.1-107, 515B.1-116, 515B.2-103, 515B.2-104, 515B.2-118, 515B.3-102, 515B.3-110,
2.29515B.3-111, 515B.3-113, 515B.3-116, 515B.3-117, 515B.3-118, 515B.3-121, 515B.4-107,
2.30515B.4-108, and 515B.4-116 apply only with respect to events and circumstances occurring
2.31on and after June 1, 1994. All other sections referenced in this section apply only with
2.32respect to events and circumstances occurring after July 31, 1999. A section referenced in
2.33this section does not invalidate the declarations, bylaws or condominium plats of
2.34condominiums created before August 1, 1999. But all sections referenced in this section
2.35prevail over the declarations, bylaws, CIC plats, rules and regulations under them, of
2Article 1 Section 1.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 3.1condominiums created before August 1, 1999, except to the extent that this chapter defers
3.2to the declarations, bylaws, CIC plats, or rules and regulations issued under them.
3.3 (3) This chapter shall not apply to cooperatives and created prior to June 1, 1994, or
3.4created under chapter 308C; to planned communities created prior to June 1, 1994,; or to
3.5planned communities that were created on or after June 1, 1994, and before August 1, 2006,
3.6and that consist of more than two but fewer than 13 units; except by election pursuant to
3.7subsection (d), and except that the following sections apply to all planned communities and
3.8townhome associations regardless of when created, unless they are exempt under subsection
3.9(e): sections 515B.1-116, subsections (a), (c), (d), and (e),; 515B.3-102, subsections (a),
3.10paragraphs (1), (3), (11), and (12), (c), and (g); 515B.3-103, subsections (a), (e), paragraph
3.11(4), (g), and (h); 515B.3-107, subsections (a), (d), (e), (f), and (g); 515B.3-115, subsections
3.12(e), paragraphs (4) and (5), (g), and (k); 515.3-1151, subsections (e), paragraphs (4) and
3.13(5), (g), and (k); 515.3-116, subsections (a) and (h); 515.3-122; 515B.4-107,; and 515B.4-108,
3.14apply to all planned communities and cooperatives regardless of when they are created,
3.15unless they are exempt under subsection (e).
3.16 (c) This chapter shall not invalidate any amendment to the declaration, bylaws or
3.17condominium plat of any condominium created under chapter 515 or 515A if the amendment
3.18was recorded before June 1, 1994. Any amendment recorded on or after June 1, 1994, shall
3.19be adopted in conformity with the procedures and requirements specified by those instruments
3.20and by this chapter. If the amendment grants to any person any rights, powers or privileges
3.21permitted by this chapter, all correlative obligations, liabilities and restrictions contained
3.22in this chapter shall also apply to that person.
3.23 (d) Any condominium created under chapter 515, any planned community or cooperative
3.24which would be exempt from this chapter under subsection (e), or any planned community
3.25or cooperative created prior to June 1, 1994, or any planned community that was created
3.26on or after June 1, 1994, and prior to August 1, 2006, and that consists of more than two
3.27but fewer than 13 units, may elect to be subject to this chapter, as follows:
3.28 (1) The election shall be accomplished by recording a declaration or amended declaration,
3.29and a new or amended CIC plat where required, and by approving bylaws or amended
3.30bylaws, which conform to the requirements of this chapter, and which, in the case of
3.31amendments, are adopted in conformity with the procedures and requirements specified by
3.32the existing declaration and bylaws of the common interest community, and by any applicable
3.33statutes.
3Article 1 Section 1.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 4.1 (2) In a condominium, the preexisting condominium plat shall be the CIC plat and an
4.2amended CIC plat shall be required only if the amended declaration or bylaws contain
4.3provisions inconsistent with the preexisting condominium plat. The condominium's CIC
4.4number shall be the apartment ownership number or condominium number originally
4.5assigned to it by the recording officer. In a cooperative in which the unit owners' interests
4.6are characterized as real estate, a CIC plat shall be required. In a planned community, the
4.7preexisting plat or registered land survey recorded pursuant to chapter 505, 508, or 508A,
4.8or the part of the plat or registered land survey upon which the common interest community
4.9is located, shall be the CIC plat.
4.10 (3) The amendment shall comply with section 515B.2-118(a)(3) and (c); except that the
4.11unanimous consent of the unit owners shall not be required for (i) a clarification of the unit
4.12boundary description if the clarified boundary description is substantially consistent with
4.13the preexisting CIC plat, or (ii) changes from common elements to limited common elements
4.14that occur by operation of section 515B.2-109(c) and (d).
4.15 (4) Except as permitted by paragraph (3), no declarant, affiliate of declarant, association,
4.16master association nor unit owner may acquire, increase, waive, reduce or revoke any
4.17previously existing warranty rights or causes of action that one of said persons has against
4.18any other of said persons by reason of exercising the right of election under this subsection.
4.19 (5) A common interest community which elects to be subject to this chapter may, as a
4.20part of the election process, change its form of ownership by complying with section
4.21515B.2-123.
4.22 (e) Except as otherwise provided in this subsection, this chapter shall not apply, except
4.23by election pursuant to subsection (d), to the following:
4.24 (1) a planned community which consists of two units, which utilizes a CIC plat complying
4.25with section 515B.2-110(d)(1) and (2), or section 515B.2-1101(d)(1) and (2), which is not
4.26subject to any rights to subdivide or convert units or to add additional real estate, and which
4.27is not subject to a master association;
4.28 (2) a common interest community that consists solely of platted lots or other separate
4.29parcels of real estate designed or utilized for detached single family dwellings or agricultural
4.30purposes, with or without common property, where no association or master association
4.31has an obligation to maintain any building containing a dwelling or any agricultural building
4.32located or to be located on such platted lots or parcels; except that section 515B.4-101(e)
4.33shall apply to the sale of such platted lots or parcels of real estate if the common interest
4.34community is or will be subject to a master declaration;
4Article 1 Section 1.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 5.1 (3) a cooperative where, at the time of creation of the cooperative, the unit owners'
5.2interests in the dwellings as described in the declaration consist solely of proprietary leases
5.3having an unexpired term of fewer than 20 years, including renewal options;
5.4 (4) planned communities utilizing a CIC plat complying with section 515B.2-110(d)(1)
5.5and (2), or section 515B.2-1101(d)(1) and (2), and cooperatives, which are limited by the
5.6declaration to nonresidential uses; or
5.7 (5) real estate subject only to an instrument or instruments filed primarily for the purpose
5.8of creating or modifying rights with respect to access, utilities, parking, ditches, drainage,
5.9or irrigation.
5.10 (f) Section 515B.4-101(e) applies to any platted lot or other parcel of real estate that is
5.11subject to a master declaration and is not subject to or is exempt from this chapter.
5.12 (g) Section 515B.1-106 and section 515B.2-118, subsections (a)(5), (a)(7), and (d), shall
5.13apply to all common interest communities.
5.14 (h) Sections 515B.1-103(33a), 515B.2-110, 515B.3-105, 515B.3-115, 515B.4-102, and
5.15515B.4-115 apply only to common interest communities created before August 1, 2010.
5.16Sections 515B.1-103(33b), 515B.2-1101, 515B.3-1051, 515B.3-1151, 515B.4-1021, and
5.17515B.4-1151 apply only to common interest communities created on or after August 1,
5.182010.
5.19 (i) Section 515B.3-114 applies to common interest communities only for the association's
5.20fiscal years commencing before January 1, 2012. Section 515B.3-1141 applies to common
5.21interest communities only for the association's fiscal years commencing on or after January
5.221, 2012.
5.23 (j) Section 515B.3-104 applies only to transfers of special declarant rights that are
5.24effective before August 1, 2010. Section 515B.3-1041, subsections (a) through (i), apply
5.25only to transfers of special declarant rights that are effective on or after August 1, 2010.
5.26Section 515B.3-1041, subsections (j) and (k), apply only to special declarant rights reserved
5.27in a declaration that is first recorded on or after August 1, 2010.
5.28 EFFECTIVE DATE.This section is effective January 1, 2026.
5.29 Sec. 2. Minnesota Statutes 2024, section 515B.2-103, is amended to read:
5.30 515B.2-103 CONSTRUCTION AND VALIDITY OF DECLARATION AND
5.31BYLAWS.
5.32 (a) All provisions of the declaration and bylaws are severable.
5Article 1 Sec. 2.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 6.1 (b) The rule against perpetuities may not be applied to defeat any provision of the
6.2declaration or this chapter, or any instrument executed pursuant to the declaration or this
6.3chapter.
6.4 (c) In the event of a conflict between the provisions of the declaration and the bylaws,
6.5the declaration prevails except to the extent that the declaration is inconsistent with this
6.6chapter. In the event of a conflict between the provisions of the declaration or the bylaws
6.7and this chapter, this chapter prevails.
6.8 (d) The declaration and bylaws must comply with sections 500.215, 500.216, and 500.217.
6.9 EFFECTIVE DATE.This section is effective January 1, 2026.
6.10 Sec. 3. Minnesota Statutes 2024, section 515B.2-119, is amended to read:
6.11 515B.2-119 TERMINATION OF COMMON INTEREST COMMUNITY .
6.12 (a) Except as otherwise provided in this chapter, a common interest community may be
6.13terminated as follows:
6.14 (1) if the common interest community does not own any common elements, the common
6.15interest community may be terminated only by agreement of unit owners of units to which
6.16at least 60 percent of the votes in the association are allocated; or
6.17 (2) if the common interest community owns common elements, the common interest
6.18community may be terminated only by agreement of unit owners of units to which at least
6.1980 percent of the votes in the association are allocated, and 80 percent of the first mortgagees
6.20of units (each mortgagee having one vote per unit financed), or any larger percentage the
6.21declaration specifies. The declaration may specify a smaller percentage only if all of the
6.22units are single-family homes or if all of the units are restricted to nonresidential use.
6.23 (b) An agreement to terminate shall be evidenced by a written agreement, executed in
6.24the same manner as a deed by the number of unit owners and first mortgagees of units
6.25required by subsection (a), and shall contain and include property and interest transfers,
6.26including easements or sales, for any common elements. The agreement shall specify a date
6.27after which the agreement shall be void unless recorded before that date. The agreement
6.28shall also specify a date by which the termination of the common interest community and
6.29the winding up of its affairs must be accomplished. A certificate of termination executed
6.30by the association evidencing the termination shall be recorded on or before the termination
6.31date, or the agreement to terminate shall be revoked. The agreement to terminate, or a
6.32memorandum thereof, and the certificate of termination shall be recorded in every county
6Article 1 Sec. 3.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 7.1in which a portion of the common interest community is situated and is effective only upon
7.2recording.
7.3 (c) In the case of a condominium or planned community containing only units having
7.4upper and lower boundaries, a termination agreement may provide that all of the common
7.5elements and units of the common interest community must be sold following termination.
7.6If, pursuant to the agreement, any real estate in the common interest community is to be
7.7sold following termination, the termination agreement shall set forth the minimum terms
7.8of sale acceptable to the association.
7.9 (d) In the case of a condominium or planned community containing any units not having
7.10upper and lower boundaries, a termination agreement may provide for sale of the common
7.11elements, but it may not require that the units be sold following termination, unless the
7.12original declaration provided otherwise or all unit owners whose units are to be sold consent
7.13to the sale.
7.14 (e) The association, on behalf of the unit owners, shall have authority to contract for the
7.15sale of real estate in a common interest community pursuant to this section, subject to the
7.16required approval. The agreement to terminate shall be deemed to grant to the association
7.17a power of attorney coupled with an interest to effect the conveyance of the real estate on
7.18behalf of the holders of all interests in the units, including without limitation the power to
7.19execute all instruments of conveyance and related instruments. Until the sale has been
7.20completed, all instruments in connection with the sale have been executed and the sale
7.21proceeds distributed, the association shall continue in existence with all powers it had before
7.22termination.
7.23 (1) The instrument conveying or creating the interest in the common interest community
7.24shall include as exhibits (i) an affidavit of the secretary of the association certifying that the
7.25approval required by this section has been obtained and (ii) a schedule of the names of all
7.26unit owners in the common interest community as of the date of the approval.
7.27 (2) Proceeds of the sale shall be distributed to unit owners and secured parties as their
7.28interests may appear, in accordance with subsections (h), (i), (j), and (k).
7.29 (3) Unless otherwise specified in the agreement of termination, until the association has
7.30conveyed title to the real estate, each unit owner and the unit owner's successors in interest
7.31have an exclusive right to occupancy of the portion of the real estate that formerly constituted
7.32the unit. During the period of that occupancy, each unit owner and the unit owner's successors
7.33in interest remain liable for all assessments and other obligations imposed on unit owners
7.34by this chapter, the declaration or the bylaws.
7Article 1 Sec. 3.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 8.1 (f) The legal description of the real estate constituting the common interest community
8.2shall, upon the date of recording of the certificate of termination referred to in subsection
8.3(b), be as follows:
8.4 (1) In a planned community utilizing a CIC plat complying with section 515B.2-110(d)(1)
8.5and (2), the lot and block description contained in the CIC plat, and any amendments thereto,
8.6subject to any subsequent conveyance or taking of a fee interest in any part of the property.
8.7 (2) In a condominium or cooperative, or a planned community utilizing a CIC plat
8.8complying with section 515B.2-110(c), the underlying legal description of the real estate
8.9as set forth in the declaration creating the common interest community, and any amendments
8.10thereto, subject to any subsequent conveyance or taking of a fee interest in any part of the
8.11property.
8.12 (3) The legal description referred to in this subsection shall apply upon the recording of
8.13the certificate of termination. The recording officer for each county in which the common
8.14interest community is located shall index the property located in that county in its records
8.15under the legal description required by this subsection from and after the date of recording
8.16of the certificate of termination. In the case of registered property, the registrar of titles shall
8.17cancel the existing certificates of title with respect to the property and issue one or more
8.18certificates of title for the property utilizing the legal description required by this subsection.
8.19 (g) In a condominium or planned community, if the agreement to terminate provides
8.20that the real estate constituting the common interest community is not to be sold following
8.21termination, title to the common elements and, in a common interest community containing
8.22only units having upper and lower boundaries described in the declaration, title to all the
8.23real estate in the common interest community, vests in the unit owners upon termination as
8.24tenants in common in proportion to their respective interest as provided in subsection (k),
8.25and liens on the units shift accordingly. While the tenancy in common exists, each unit
8.26owner and the unit owner's successors in interest have an exclusive right to occupancy of
8.27the portion of the real estate that formerly constituted the unit.
8.28 (h) The proceeds of any sale of real estate pursuant to subsection (e), together with the
8.29assets of the association, shall be held by the association as trustee for unit owners, secured
8.30parties and other holders of liens on the units as their interests may appear. Before distributing
8.31any proceeds, the association shall have authority to deduct from the proceeds of sale due
8.32with respect to the unit (i) unpaid assessments levied by the association with respect to the
8.33unit, (ii) unpaid real estate taxes or special assessments due with respect to the unit, and
8Article 1 Sec. 3.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 9.1(iii) the share of expenses of sale and winding up of the association's affairs with respect to
9.2the unit.
9.3 (i) Following termination of a condominium or planned community, creditors of the
9.4association holding liens on the units perfected before termination may enforce those liens
9.5in the same manner as any lienholder, in order of priority based upon their times of perfection.
9.6All other creditors of the association are to be treated as if they had perfected liens on the
9.7units immediately before termination.
9.8 (j) In a cooperative, the declaration may provide that all creditors of the association have
9.9priority over any interests of unit owners and creditors of unit owners. In that event, following
9.10termination, creditors of the association holding liens on the cooperative which were perfected
9.11before termination may enforce their liens in the same manner as any lienholder, in order
9.12of priority based upon their times of perfection. All other creditors of the association shall
9.13be treated as if they had perfected a lien against the cooperative immediately before
9.14termination. Unless the declaration provides that all creditors of the association have that
9.15priority:
9.16 (1) the lien of each creditor of the association which was perfected against the association
9.17before termination becomes, upon termination, a lien against each unit owner's interest in
9.18the unit as of the date the lien was perfected;
9.19 (2) any other creditor of the association is to be treated upon termination as if the creditor
9.20had perfected a lien against each unit owner's interest immediately before termination;
9.21 (3) the amount of the lien of an association's creditor described in paragraphs (1) and
9.22(2) against each of the unit owners' interest shall be proportionate to the ratio which each
9.23unit's common expense liability bears to the common expense liability of all of the units;
9.24 (4) the lien of each creditor of each unit owner which was perfected before termination
9.25continues as a lien against that unit owner's interest in the unit as of the date the lien was
9.26perfected; and
9.27 (5) the assets of the association shall be distributed to all unit owners and all lienholders
9.28as their interests may appear in the order described in this section. Creditors of the association
9.29are not entitled to payment from any unit owner in excess of the amount of the creditor's
9.30lien against that unit owner's interest.
9.31 (k) The respective interest of unit owners referred to in subsections (e), (f), (g), (h) and
9.32(i) are as follows:
9Article 1 Sec. 3.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 10.1 (1) Except as provided in paragraph (2), the respective interests of unit owners are the
10.2fair market values of their units, allocated interests, and any limited common elements
10.3immediately before the termination, as determined by one or more independent appraisers
10.4selected by the association. The decision of the independent appraisers must be distributed
10.5to the unit owners and becomes final unless disapproved within 30 days after distribution
10.6by unit owners of units to which 25 percent of the votes in the association are allocated.
10.7The proportion of any unit's interest to that of all units is determined by dividing the fair
10.8market value of that unit by the total fair market values of all the units.
10.9 (2) If any unit or any limited common element is destroyed to the extent that an appraisal
10.10of the fair market value thereof before destruction cannot be made, the interests of all unit
10.11owners shall be measured by: (i) in a condominium, their allocations of common element
10.12interests immediately before the termination, (ii) in a cooperative, their respective ownership
10.13interests immediately before the termination, and (iii) in a planned community, their
10.14respective allocations of common expenses immediately before the termination.
10.15 (l) In a condominium or planned community, except as provided in subsection (m),
10.16foreclosure or enforcement of a lien or encumbrance against the entire common interest
10.17community does not terminate, of itself, the common interest community, and foreclosure
10.18or enforcement of a lien or encumbrance against a portion of the common interest community
10.19does not withdraw that portion from the common interest community.
10.20 (m) In a condominium or planned community, if a lien or encumbrance against a portion
10.21of the real estate comprising the common interest community has priority over the declaration
10.22and the lien or encumbrance has not been partially released, the parties foreclosing the lien
10.23or encumbrance, upon foreclosure, may record an instrument excluding the real estate subject
10.24to that lien or encumbrance from the common interest community.
10.25 (n) Following the termination of a common interest community in accordance with this
10.26section, the association shall be dissolved in accordance with law.
10.27 EFFECTIVE DATE.This section is effective January 1, 2026.
10.28Sec. 4. Minnesota Statutes 2024, section 515B.3-102, is amended to read:
10.29 515B.3-102 POWERS AND DUTIES OF UNIT OWNERS' ASSOCIATION.
10.30 (a) Except as provided in subsections (b), (c), (d), (e), and (f) and subject to the provisions
10.31of the declaration or bylaws, the association shall have the power to:
10.32 (1) adopt, amend and revoke rules and regulations not inconsistent with the articles of
10.33incorporation, bylaws and declaration, and consistent with the requirements of subsection
10Article 1 Sec. 4.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 11.1(g) as follows: (i) regulating the use of the common elements; (ii) regulating the use of the
11.2units, and conduct of unit occupants, which may jeopardize the health, safety or welfare of
11.3other occupants, which involves noise or other disturbing activity, or which may damage
11.4the common elements or other units; (iii) regulating or prohibiting animals; (iv) regulating
11.5changes in the appearance of the common elements and conduct which may damage the
11.6common interest community; (v) regulating the exterior appearance of the common interest
11.7community, including, for example, balconies and patios, window treatments, and signs
11.8and other displays, regardless of whether inside a unit; (vi) implementing the articles of
11.9incorporation, declaration and bylaws, and exercising the powers granted by this section;
11.10and (vii) otherwise facilitating the operation of the common interest community;
11.11 (2) adopt and amend budgets for revenues, expenditures and reserves, and levy and
11.12collect assessments for common expenses from unit owners;
11.13 (3) hire and discharge managing agents and other employees, agents, and independent
11.14contractors;
11.15 (4) institute, defend, or intervene in litigation or administrative proceedings (i) in its
11.16own name on behalf of itself or two or more unit owners on matters affecting the common
11.17elements or other matters affecting the common interest community or, (ii) with the consent
11.18of the owners of the affected units on matters affecting only those units;
11.19 (5) make contracts and incur liabilities;
11.20 (6) regulate the use, maintenance, repair, replacement, and modification of the common
11.21elements and the units;
11.22 (7) cause improvements to be made as a part of the common elements, and, in the case
11.23of a cooperative, the units;
11.24 (8) acquire, hold, encumber, and convey in its own name any right, title, or interest to
11.25real estate or personal property, but (i) common elements in a condominium or planned
11.26community may be conveyed or subjected to a security interest only pursuant to section
11.27515B.3-112, or (ii) part of a cooperative may be conveyed, or all or part of a cooperative
11.28may be subjected to a security interest, only pursuant to section 515B.3-112;
11.29 (9) grant or amend easements for public utilities, public rights-of-way or other public
11.30purposes, and cable television or other communications, through, over or under the common
11.31elements; grant or amend easements, leases, or licenses to unit owners for purposes authorized
11.32by the declaration; and, subject to approval by a vote of unit owners other than declarant
11Article 1 Sec. 4.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 12.1or its affiliates, grant or amend other easements, leases, and licenses through, over or under
12.2the common elements;
12.3 (10) impose and receive any payments, fees, or charges for the use, rental, or operation
12.4of the common elements, other than limited common elements, and for services provided
12.5to unit owners. The association must compile and provide to every unit owner a schedule
12.6of the fees and charges that may be imposed;
12.7 (11) impose interest and a late charges fee for late payment of assessments, provided
12.8that an association may not impose a late fee in excess of $15; may not impose, for a special
12.9assessment, an amount greater than five percent of the amount owed or more than $100,
12.10whichever is lower; and, after notice and an opportunity to be heard before the board or a
12.11committee appointed by it, levy reasonable fines for violations of the declaration, bylaws,
12.12and rules and regulations of the association as specified in subsection (c), provided that
12.13attorney fees and costs must not be charged or collected from a unit owner who disputes or
12.14questions a fine or assessment and, if after the homeowner requests a hearing and a hearing
12.15is held by the board or a committee of the board, the board does not adopt a resolution
12.16levying the fine or upholding the assessment against the unit owner or owner's unit;
12.17 (12) impose reasonable charges for the review, preparation and recordation of
12.18amendments to the declaration, or resale certificates required by section 515B.4-107,
12.19statements of unpaid assessments, or furnishing copies of association records provided that
12.20the association may not impose any charges, including attorney fees, to respond to a question
12.21about any governing document or any aspect of the operation or management of the common
12.22interest community posed by a unit owner to the association;
12.23 (13) provide for the indemnification of its officers and directors, and maintain directors'
12.24and officers' liability insurance;
12.25 (14) provide for reasonable procedures governing the conduct of meetings and election
12.26of directors; and
12.27 (15) exercise any other powers conferred by law, or by the declaration, articles of
12.28incorporation or bylaws; and.
12.29 (16) exercise any other powers necessary and proper for the governance and operation
12.30of the association.
12.31 (b) Notwithstanding subsection (a) the declaration or bylaws may not impose limitations
12.32on the power of the association to deal with the declarant which are more restrictive than
12.33the limitations imposed on the power of the association to deal with other persons.
12Article 1 Sec. 4.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 13.1 (c) An association must adopt and provide to every unit owner a policy regarding fines
13.2that includes a list of the violations for which a fine may be imposed and a schedule of fines
13.3for those violations. When a violation can be cured without causing damage to property or
13.4to another, the association must provide the unit owner with a reasonable time to correct
13.5the violation before a fine may be imposed. A fine levied pursuant to subsection (a)(11),
13.6must be commensurate with the violation and must not exceed $100 for a single violation,
13.7except, when the violation is a repeated, willful, and knowing violation and the owner has
13.8been given notice that the fine will be increased due to the repeated nature of the violation,
13.9the fine may be up to $300. When combined with additional fines for an ongoing violation,
13.10late fees, and other allowable charges, the fine must not exceed $2,500 in total for the
13.11violation. An association that levies a fine pursuant to subsection (a)(11), or an assessment
13.12pursuant to section 515B.3-115(g), or 515B.3-1151(g), must provide a dated, written notice
13.13to a unit owner that:
13.14 (1) states the amount and reason for the fine or assessment;
13.15 (2) for fines levied under section 515B.3-102(a)(11), specifies: (i) the violation for which
13.16a fine is being levied and the date of the levy; and (ii) the specific section of the declaration,
13.17bylaws, rules, or regulations allegedly violated;
13.18 (3) for assessments levied under section 515B.3-115(g) or 515B.3-1151(g), identifies:
13.19(i) the damage caused; and (ii) the act or omission alleged to have caused the damage;
13.20 (4) states that all unpaid fines and assessments are liens which, if not satisfied, could
13.21lead to foreclosure of the lien against the owner's unit;
13.22 (5) describes the unit owner's right to be heard by the board or a committee appointed
13.23by the board and the procedures for disputing the fine;
13.24 (6) states that if the assessment, fine, late fees, and other allowable charges are not paid,
13.25the amount may increase as a result of the imposition of attorney fees and other collection
13.26costs; and
13.27 (7) informs the unit owner that homeownership assistance is available from the Minnesota
13.28Homeownership Center.
13.29 (d) Notwithstanding subsection (a), powers exercised under this section must comply
13.30with sections 500.215, 500.216, and 500.217.
13.31 (e) Notwithstanding subsection (a)(4) or any other provision of this chapter, the
13.32association, before instituting litigation or arbitration involving construction defect claims
13.33against a development party, shall:
13Article 1 Sec. 4.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 14.1 (1) mail or deliver written notice of the anticipated commencement of the action to each
14.2unit owner at the addresses, if any, established for notices to owners in the declaration and,
14.3if the declaration does not state how notices are to be given to owners, to the owner's last
14.4known address. The notice shall specify the nature of the construction defect claims to be
14.5alleged, the relief sought, and the manner in which the association proposes to fund the cost
14.6of pursuing the construction defect claims; and
14.7 (2) obtain the approval of owners of units to which a majority of the total votes in the
14.8association are allocated. Votes allocated to units owned by the declarant, an affiliate of the
14.9declarant, or a mortgagee who obtained ownership of the unit through a foreclosure sale
14.10are excluded. The association may obtain the required approval by a vote at an annual or
14.11special meeting of the members or, if authorized by the statute under which the association
14.12is created and taken in compliance with that statute, by a vote of the members taken by
14.13electronic means or mailed ballots. If the association holds a meeting and voting by electronic
14.14means or mailed ballots is authorized by that statute, the association shall also provide for
14.15voting by those methods. Section 515B.3-110(c) applies to votes taken by electronic means
14.16or mailed ballots, except that the votes must be used in combination with the vote taken at
14.17a meeting and are not in lieu of holding a meeting, if a meeting is held, and are considered
14.18for purposes of determining whether a quorum was present. Proxies may not be used for a
14.19vote taken under this paragraph unless the unit owner executes the proxy after receipt of
14.20the notice required under subsection (e)(1) and the proxy expressly references this notice.
14.21 (f) The association may intervene in a litigation or arbitration involving a construction
14.22defect claim or assert a construction defect claim as a counterclaim, crossclaim, or third-party
14.23claim before complying with subsections (e)(1) and (e)(2) but the association's complaint
14.24in an intervention, counterclaim, crossclaim, or third-party claim shall be dismissed without
14.25prejudice unless the association has complied with the requirements of subsection (e) within
14.2690 days of the association's commencement of the complaint in an intervention or the
14.27assertion of the counterclaim, crossclaim, or third-party claim.
14.28 (g) Rules and regulations adopted must not be arbitrary or capricious and must otherwise
14.29be reasonable. An association must give unit owners 60 days' advance notice of a board's
14.30intention to adopt a new rule, or amend or revoke a rule. A rule change must be approved
14.31at a board meeting, and an association must give homeowners the opportunity to comment
14.32on the proposed rule change at the meeting at which the change is considered. Any rule in
14.33effect may be revoked by a majority vote of the unit owners at a board meeting, where unit
14.34owners may vote in person, by a written statement signed and dated by the unit owner prior
14.35to the meeting at which revocation is considered, or by proxy.
14Article 1 Sec. 4.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 15.1 (h) Each association must adopt procedures for dispute resolution and the meet and
15.2confer process as provided under section 515B.3-122.
15.3 (i) Associations must not sell or assign any debt owed by a unit owner.
15.4 EFFECTIVE DATE.This section is effective January 1, 2026.
15.5 Sec. 5. Minnesota Statutes 2024, section 515B.3-103, is amended to read:
15.6 515B.3-103 BOARD OF DIRECTORS, OFFICERS AND DECLARANT
15.7CONTROL.
15.8 (a) An association shall be governed by a board of directors whose appointment or
15.9election shall occur no later than the date of creation of the common interest community
15.10and shall be reflected in the association's records. Except as expressly prohibited by the
15.11declaration, the articles of incorporation, bylaws, subsection (b), or other provisions of this
15.12chapter, the board may act in all instances on behalf of the association. In the performance
15.13of their duties, the officers and directors are required to exercise (i) if appointed by the
15.14declarant, the care required of fiduciaries of the unit owners and (ii) if elected by the unit
15.15owners, the care required of a director by section 302A.251, 308B.455, 308C.455, or
15.16317A.251, as applicable. The officers and directors appointed by the declarant shall have
15.17a duty to fulfill, and to cause the association to fulfill, their respective obligations under the
15.18declaration, bylaws, articles of incorporation, and this chapter and to enforce the provisions
15.19of the declaration, bylaws, articles of incorporation, and this chapter against all unit owners,
15.20including the declarant and its affiliates, in a uniform and fair manner. The standards of
15.21conduct for officers and directors set forth in this subsection shall also apply to the officers
15.22and directors of master associations in the exercise of their duties on behalf of the master
15.23association.
15.24 (b) The board may not act unilaterally to amend the declaration, to terminate the common
15.25interest community, to elect directors to the board, or to determine the qualifications, powers
15.26and duties, or terms of office of directors, but the board may fill vacancies in its membership
15.27created other than by removal by the vote of the association members for the unexpired
15.28portion of any term.
15.29 (c) The declaration may provide for a period of declarant control of the association,
15.30during which a declarant, or persons designated by the declarant, may appoint and remove
15.31the officers and directors of the association. The period of declarant control begins on the
15.32date of creation of the common interest community and terminates upon the earliest of the
15.33following events: (i) five years after the date of the first conveyance of a unit to a unit owner
15Article 1 Sec. 5.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 16.1other than a declarant in the case of a flexible common interest community or three years
16.2in the case of any other common interest community, (ii) the declarant's voluntary surrender
16.3of control by giving written notice to the unit owners pursuant to section 515B.1-115, or
16.4(iii) the conveyance of 75 percent of the units to unit owners other than a declarant.
16.5 (d) The board shall cause a meeting of the unit owners to be called, as follows:
16.6 (1) If the period of declarant control has terminated pursuant to subsection (c), a meeting
16.7of the unit owners shall be called and held within 60 days after said termination, at which
16.8the board shall be appointed or elected by all unit owners, including declarant, subject to
16.9the requirements of subsection (e).
16.10 (2) If 50 percent of the units that a declarant is authorized by the declaration to create
16.11have been conveyed prior to the termination of the declarant control period, a meeting of
16.12the unit owners shall be called and held within 60 days thereafter, at which not less than
16.1333-1/3 percent of the members of the board shall be elected by unit owners other than a
16.14declarant or an affiliate of a declarant.
16.15 (3) If the board fails or refuses to cause a meeting of the unit owners required to be called
16.16pursuant to subsection (d), then the unit owners other than a declarant and its affiliates may
16.17cause the meeting to be called pursuant to the applicable provisions of the law under which
16.18the association was created. The declarant and its affiliates shall be deemed to be present
16.19at the meeting for purposes of establishing a quorum regardless of their failure to attend the
16.20meeting.
16.21 (e) Following the termination of any period of declarant control, the unit owners shall
16.22appoint or elect the board. All unit owners, including the declarant and its affiliates, may
16.23cast the votes allocated to any units owned by them. The board shall thereafter be subject
16.24to the following:
16.25 (1) Unless otherwise approved by a vote of unit owners other than the declarant or an
16.26affiliate of the declarant, a majority of the directors shall be unit owners or a natural person
16.27designated by a unit owner that is not a natural person, other than a declarant or an affiliate
16.28of a declarant. The remaining directors need not be unit owners unless required by the
16.29articles of incorporation or bylaws.
16.30 (2) Subject to the requirements of subsection (e)(1), the articles of incorporation or
16.31bylaws may authorize the declarant or a person designated by the declarant to appoint one
16.32director, who need not be a member. The articles of incorporation or bylaws shall not be
16.33amended to change or terminate the authorization to appoint one director without the written
16.34consent of the declarant or other person possessing the power to appoint.
16Article 1 Sec. 5.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 17.1 (3) Subject to the requirements of subsection (e)(1), the articles of incorporation or
17.2bylaws may authorize special classes of directors and director voting rights, as follows: (i)
17.3classes of directors, (ii) the appointment or election of directors in certain classes by certain
17.4classes of members, or (iii) class voting by classes of directors on issues affecting only a
17.5certain class or classes of members, units, or other parcels of real estate, or to otherwise
17.6protect the legitimate interest of such class or classes. No person may utilize such special
17.7classes or class voting for the purpose of evading any limitation imposed on declarants by
17.8this chapter.
17.9 (4) The board shall elect the officers. The directors and officers shall take office upon
17.10election.
17.11 (f) In determining whether the period of declarant control has terminated under subsection
17.12(c), or whether unit owners other than a declarant are entitled to elect members of the board
17.13of directors under subsection (d), the percentage of the units conveyed shall be calculated
17.14using as a numerator the number of units conveyed and as a denominator the number of
17.15units subject to the declaration plus the number of units which the declarant is authorized
17.16by the declaration to create on any additional real estate. The percentages referred to in
17.17subsections (c) and (d) shall be calculated without reference to units that are auxiliary to
17.18other units, such as garage units or storage units. A person shall not use a master association
17.19or other device to evade the requirements of this section.
17.20 (g) Except as otherwise provided in this subsection, all meetings of the board of directors
17.21must be open to the unit owners. To the extent practicable, The board shall give reasonable
17.22notice to the unit owners of the date, time, and place, and agenda of a board meeting. If the
17.23date, time, and place of meetings are provided for in the declaration, articles, or bylaws,
17.24announced at a previous meeting of the board, posted in a location accessible to the unit
17.25owners and designated by the board from time to time, or if an emergency requires immediate
17.26consideration of a matter by the board, notice is not required. "Notice" has the meaning
17.27given in section 317A.011, subdivision 14. Prior to the board taking action on an agenda
17.28item, any unit owner or any person designated in writing by a member as the member's
17.29representative must be permitted to attend and speak during any meeting on any subject
17.30that is on the meeting agenda. A time must be designated by the board at each meeting for
17.31any unit owner, or the unit owner's designee, to raise any issue that is not on the meeting
17.32agenda and that is related to the association or the common interest community. The board
17.33may place a reasonable limit on the time a member is allowed to speak. Meetings may occur
17.34virtually but an association must provide access to all members to assert their right under
17Article 1 Sec. 5.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 18.1this section, including technical assistance to participate in virtual meetings and electronic
18.2voting. Meetings may be closed to discuss the following:
18.3 (1) personnel matters;
18.4 (2) pending or potential litigation, arbitration or other potentially adversarial proceedings,
18.5between unit owners, between the board or association and unit owners, or other matters in
18.6which any unit owner may have an adversarial interest, if the board determines that closing
18.7the meeting is necessary to discuss strategy or to otherwise protect the position of the board
18.8or association or the privacy of a unit owner or occupant of a unit; or
18.9 (3) criminal activity arising within the common interest community if the board
18.10determines that closing the meeting is necessary to protect the privacy of the victim or that
18.11opening the meeting would jeopardize investigation of the activity.
18.12 Nothing in this subsection imposes a duty on the board to provide special facilities for
18.13meetings. The failure to give notice as required by this subsection shall not invalidate the
18.14board meeting or any action taken at the meeting. The minutes of any part of a meeting that
18.15is closed under this subsection may be kept confidential at the discretion of the board.
18.16 (h) The conflict of interest standards set forth in section 317A.255 are required of officers
18.17and directors and apply to an actual or potential conflict of interest that arises concerning
18.18an officer or director, regardless of whether appointed or elected, and in addition to those
18.19requirements:
18.20 (1) no board member or the spouse, sibling, child, or parent of any board member may
18.21have a financial interest in a business that the association or a property management company
18.22has hired or contracted with for goods or services over $2,000 in any calendar year;
18.23 (2) no board member or the spouse, sibling, child, or parent of any board member may
18.24solicit or accept any form of direct or indirect compensation, gift, money, rebate, gratuity,
18.25remuneration of any kind, or anything of value from any person or entity performing services
18.26for the association or a board member or any person or entity with which the association or
18.27a board member has a contract or other business relationship;
18.28 (3) no association or board of directors of an association shall solicit or accept any gift,
18.29money, rebate, any form of direct or indirect compensation, gratuity, remuneration of any
18.30kind, or anything of value that would improperly influence or would appear to a reasonable
18.31person to improperly influence the decisions made by the association;
18.32 (4) no management company or the employee, owner, or individual with a financial
18.33interest in a management company that is providing services to an entity covered by this
18Article 1 Sec. 5.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 19.1chapter may have a financial interest in a business the association or management company
19.2has hired or contracted with for goods or services in excess of $2,000 in any calendar year
19.3and may not solicit or accept any gift, money, rebate, gratuity, or direct or indirect
19.4compensation from any person or entity performing services for the association or for the
19.5award of a contract for goods or services; or
19.6 (5) no association or board of directors of an association shall enter into a contract or
19.7any other business relationship on behalf of an association or a board member from which
19.8the management company, its owner or owners, any of its managerial officials, or any of
19.9its employees or any spouse, domestic partner, or relative of the owner or owners, managerial
19.10officials, or any employee of the management company has received or could receive a
19.11direct or indirect financial benefit in excess of $2,000 in any calendar year.
19.12 (i) An annual report must be prepared and signed by each member of the board of
19.13directors for the association listing all contracts for goods or services for the previous budget
19.14year, including the purpose of the contract, the amount of the contract, the identity of the
19.15recipient of the contract award, the date of the meeting the contract was approved, the
19.16directors present at the meeting, the date the contract became valid, and any fees or payments
19.17made related to the contract to a third party or management company. The annual report
19.18must be sent to each member owner annually.
19.19 (j) A property management company that is hired by a board of directors or association
19.20covered under this section may not enter into a contract that automatically renews for goods
19.21or services for the association, unless the contract provides that the association or
19.22management company can terminate the contract at any time with no more than 60 days'
19.23notice.
19.24 EFFECTIVE DATE.This section is effective January 1, 2026.
19.25Sec. 6. Minnesota Statutes 2024, section 515B.3-106, is amended to read:
19.26 515B.3-106 BYLAWS; ANNUAL REPORT.
19.27 (a) A common interest community shall have bylaws which comply with this chapter
19.28and the statute under which the association is incorporated. The bylaws and any amendments
19.29may be recorded, but need not be recorded to be effective unless so provided in the bylaws.
19.30Any amendment, addition, or repeal of the bylaws must be approved at the annual meeting,
19.31and an association must give homeowners the opportunity to comment on the proposed
19.32change at the meeting at which the change is considered. Any bylaw in effect may be revoked
19.33by a majority vote of the unit owners at the annual meeting, where unit owners may vote
19Article 1 Sec. 6.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 20.1in person, by a written statement signed and dated by the unit owner prior to the meeting
20.2at which revocation is considered, or by proxy.
20.3 (b) The bylaws shall provide that, in addition to any statutory requirements:
20.4 (1) A meeting of the members shall be held at least once each year, and a specified
20.5officer of the association shall give notice of the meeting as provided in section 515B.3-108.
20.6 (2) An annual report shall be prepared by the association and a copy of the report shall
20.7be provided to each unit owner at or prior to the annual meeting.
20.8 (c) The annual report shall contain at a minimum:
20.9 (1) a statement of any capital expenditures in excess of two percent of the current budget
20.10or $5,000, whichever is greater, approved by the association for the current fiscal year or
20.11succeeding two fiscal years;
20.12 (2) a statement of the association's total replacement reserves, the components of the
20.13common interest community for which the reserves are set aside, and the amounts of the
20.14reserves, if any, that the board has allocated for the replacement of each of those components;
20.15 (3) a copy of the statement of revenues and expenses for the association's last fiscal year,
20.16and a balance sheet as of the end of said fiscal year;
20.17 (4) a statement of the status of any pending litigation or judgments to which the
20.18association is a party;
20.19 (5) a detailed description of the insurance coverage provided by the association including
20.20a statement as to which, if any, of the items referred to in section 515B.3-113, subsection
20.21(b), are insured by the association; and
20.22 (6) a statement of the total past due assessments on all units, current as of not more than
20.2360 days prior to the date of the meeting.
20.24 EFFECTIVE DATE.This section is effective January 1, 2026.
20.25Sec. 7. Minnesota Statutes 2024, section 515B.3-107, is amended to read:
20.26 515B.3-107 UPKEEP OF COMMON INTEREST COMMUNITY .
20.27 (a) Except to the extent provided by the declaration, this subsection or section
20.28515B.3-113, the association is responsible for the maintenance, repair and replacement of
20.29the common elements, and each unit owner is responsible for the maintenance, repair and
20.30replacement of the unit owner's unit. A management company may not require an association
20.31to work with a particular vendor. Damage to the common elements or any unit as a result
20Article 1 Sec. 7.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 21.1of the acts or omissions of a unit owner or the association, including damage resulting from
21.2the unit owner's or association's lack of maintenance or failure to perform necessary repairs
21.3or replacement, is the responsibility of the unit owner or association responsible for causing
21.4the damage, or whose agents or, subject to section 515B.3-115, subsection (g), and section
21.5515B.3-1151, subsection (g), invitees caused the damage.
21.6 (b) The association's board of directors shall prepare and approve a written preventative
21.7maintenance plan, maintenance schedule, and maintenance budget for the common elements.
21.8The association shall follow the approved preventative maintenance plan. The association's
21.9board may amend, modify, or replace an approved preventative maintenance plan or an
21.10approved maintenance schedule from time to time. The association must provide all unit
21.11owners with a paper copy, electronic copy, or electronic access to the preventative
21.12maintenance plan, the maintenance schedule, and any amendments or modifications to or
21.13replacements of the preventative maintenance plan and the maintenance schedule. If a
21.14common interest community was created on or before August 1, 2017, the association's
21.15board of directors shall have until January 1, 2019, to comply with the requirements of this
21.16subsection.
21.17 (c) The association shall have access through and into each unit for purposes of
21.18performing maintenance, repair or replacement for which the association may be responsible.
21.19The association and any public safety personnel shall also have access for purposes of
21.20abating or correcting any condition in the unit which violates any governmental law,
21.21ordinance or regulation, which may cause material damage to or jeopardize the safety of
21.22the common interest community, or which may constitute a health or safety hazard for
21.23occupants of units.
21.24 (d) Neither the association, nor any unit owner other than the declarant or its affiliates,
21.25is subject to a claim for payment of expenses incurred in connection with any additional
21.26real estate.
21.27 (e) In exercising any authority granted to it under the declaration to approve or disapprove
21.28proposed changes to a unit or limited common element, the association's board shall provide
21.29a fair, reasonable, and expeditious procedure for making any decision. The procedure shall
21.30be set forth in the association's governing documents. The procedures shall state the
21.31maximum time for issuance of any decision on a proposal or a request for consideration.
21.32At a minimum, the association's board must make a decision within 90 days after the initial
21.33submission of the proposal or submission of any additional information or changes to the
21.34proposal requested by the association's board in response to the initial submission. A decision
21.35must be in writing, must be made in good faith, and must not be unreasonable, arbitrary, or
21Article 1 Sec. 7.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 22.1capricious. If the proposal is disapproved, the decision must include both an explanation of
22.2why the proposal is disapproved and a description of the procedure for reconsideration of
22.3the decision by the association's board.
22.4 (f) Unless expressly provided for in the declaration, the association must not enforce
22.5any restriction on parking of a personal vehicle on a public street or public road for which
22.6the state or local government has assumed responsibility for maintenance and repairs, unless
22.7the authority to regulate such parking has been expressly delegated to the association by
22.8the state or local government under terms prescribing the manner in which the association
22.9may exercise that authority. Any such delegation is valid for a period not to exceed five
22.10years, at which time the association must reapply to the delegating entity. As used in this
22.11subsection, "personal vehicle" means an automobile with a gross weight of less than 26,001
22.12pounds that is used for personal pleasure, travel, or commuting to and from a place of work,
22.13and does not include a motor home or self-propelled recreational vehicle, or an automobile
22.14that is otherwise used primarily in connection with any commercial endeavor or business.
22.15 (g) A unit owner or resident may park a work vehicle, including but not limited to a van,
22.16pickup truck, small truck, ambulance, law enforcement vehicle, utility company vehicle, or
22.17emergency response vehicle, on the unit owner's property or curtilage, provided the vehicle's
22.18length does not encroach on another unit owner's property or interfere with the association's
22.19ability to maintain roads or common elements. An association must not prohibit or restrict
22.20this parking.
22.21 EFFECTIVE DATE.This section is effective January 1, 2026.
22.22Sec. 8. Minnesota Statutes 2024, section 515B.3-108, is amended to read:
22.23 515B.3-108 MEETINGS.
22.24 (a) A meeting of the association shall be held at least once each year. At each annual
22.25meeting, there shall be, at a minimum, (i) an election of successor directors for those directors
22.26whose terms have expired, (ii) a report on the activities and financial condition of the
22.27association, and (iii) consideration of and action on any other matters included in the notice
22.28of meeting. Unless the bylaws provide otherwise, special meetings of the association may
22.29be called by the president and shall be called by the president or secretary upon the written
22.30petition of a majority of the board or unit owners entitled to cast at least 20 percent of the
22.31votes in the association.
22.32 (b) Not less than 21 nor more than 30 days in advance of any annual meeting, and not
22.33less than seven nor more than 30 days in advance of any special meeting, the secretary or
22Article 1 Sec. 8.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 23.1other officer specified in the bylaws shall cause notice to be hand delivered or sent postage
23.2prepaid by United States mail to the mailing address of each unit, or to any other address
23.3designated in writing by the unit owner to the association as provided in the bylaws or by
23.4statute.
23.5 (c) The notice of any meeting shall state the date, time and place of the meeting, the
23.6purposes of the meeting, and, if proxies are permitted, the procedures for appointing proxies.
23.7The notice must include copies of any documents that are subject to discussion or approval
23.8at the meeting, including the budget.
23.9 (d) The board may provide for reasonable procedures governing the conduct of meetings
23.10and elections.
23.11 EFFECTIVE DATE.This section is effective January 1, 2026.
23.12Sec. 9. Minnesota Statutes 2024, section 515B.3-110, is amended to read:
23.13 515B.3-110 VOTING; PROXIES.
23.14 (a) At any meeting of the association an owner or the holder of the owner's proxy shall
23.15be entitled to cast the vote which is allocated to the unit. If there is more than one owner of
23.16a unit, only one of the owners may cast the vote. If the owners of a unit fail to agree and
23.17notify the association as to who shall cast the vote, the vote shall not be cast. Any provision
23.18in the articles of incorporation, bylaws, declaration, or other document restricting a unit
23.19owner's right to vote, or affecting quorum requirements, by reason of nonpayment of
23.20assessments, or a purported violation of any provision of the documents governing the
23.21common interest community, shall be void.
23.22 (b) If permitted by the articles or bylaws, votes allocated to a unit may be cast pursuant
23.23to a proxy executed by the unit owner entitled to cast the vote for that unit. The board may
23.24specify the form of proxy and proxy rules, consistent with law. A current board member
23.25cannot act as a proxy for a unit owner. No more than 20 percent of votes cast on any single
23.26vote can be by proxy.
23.27 (c) Except as provided in section 515B.3-106, if authorized by the statute under which
23.28the association is created, and to the extent not limited or prohibited by the articles of
23.29incorporation, bylaws, or declaration, the vote on any issue or issues may be taken by
23.30electronic means or by mailed ballots, in compliance with the applicable statute, in lieu of
23.31holding a meeting of the unit owners. Such a vote shall have the force and effect of a vote
23.32taken at a meeting; provided, that the total votes cast are at least equal to the votes required
23.33for a quorum. The board shall set a voting period within which the ballots or other voting
23Article 1 Sec. 9.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 24.1response must be received by the association, which period shall be not less than 15 nor
24.2more than 45 days after the date of delivery of the notice of the vote and voting procedures
24.3to the unit owners. The board of directors shall provide notice of the results of the vote to
24.4the unit owners within 30 days after the expiration of the voting period. All requirements
24.5in this chapter, the declaration or the bylaws for a meeting of the unit owners, or being
24.6present in person, shall be deemed satisfied by a vote taken in compliance with the
24.7requirements of this section. The voting procedures authorized by this section shall not be
24.8used in combination with a vote taken at a meeting of the unit owners. However, voting by
24.9electronic means and mailed ballot may be combined if each is done in compliance with
24.10the applicable statute.
24.11 (d) The articles of incorporation or bylaws may authorize class voting by unit owners
24.12for directors or on specified issues affecting the class. Class voting may only be used to
24.13address operational, physical, or administrative differences within the common interest
24.14community. A declarant shall not use class voting to evade any limit imposed on declarants
24.15by this chapter and units shall not constitute a class because they are owned by a declarant.
24.16 (e) The declaration or bylaws may provide that votes on specified matters affecting the
24.17common interest community be cast by lessees or secured parties rather than unit owners;
24.18provided that (i) the provisions of subsections (a), (b), and (c) apply to those persons as if
24.19they were unit owners; (ii) unit owners who have so delegated their votes to other persons
24.20may not cast votes on those specified matters; (iii) lessees or secured parties are entitled to
24.21notice of meetings, access to records, and other rights respecting those matters as if they
24.22were unit owners, and (iv) the lessee or secured party has filed satisfactory evidence of its
24.23interest with the secretary of the association prior to the meeting. Unit owners must also be
24.24given notice, in the manner provided in section 515B.3-108(b), of meetings at which lessees
24.25or secured parties are entitled to vote.
24.26 (f) No votes allocated to a unit owned by the association may be cast nor counted toward
24.27a quorum.
24.28 EFFECTIVE DATE.This section is effective January 1, 2026.
24.29Sec. 10. Minnesota Statutes 2024, section 515B.3-115, is amended to read:
24.30 515B.3-115 ASSESSMENTS FOR COMMON EXPENSES; CIC CREATED
24.31BEFORE AUGUST 1, 2010.
24.32 (a) The obligation of a unit owner to pay common expense assessments shall be as
24.33follows:
24Article 1 Sec. 10.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 25.1 (1) If a common expense assessment has not been levied, the declarant shall pay all
25.2operating expenses of the common interest community, and shall fund the replacement
25.3reserve component of the common expenses as required by subsection (b).
25.4 (2) If a common expense assessment has been levied, all unit owners, including the
25.5declarant, shall pay the assessments allocated to their units, subject to the following:
25.6 (i) If the declaration so provides, a declarant's liability, and the assessment lien, for the
25.7common expense assessments, exclusive of replacement reserves, on any unit owned by
25.8the declarant may be limited to 25 percent or more of any assessment, exclusive of
25.9replacement reserves, until the unit or any building located in the unit is substantially
25.10completed. Substantial completion shall be evidenced by a certificate of occupancy in any
25.11jurisdiction that issues the certificate.
25.12 (ii) If the declaration provides for a reduced assessment pursuant to paragraph (2)(i),
25.13the declarant shall be obligated, within 60 days following the termination of the period of
25.14declarant control, to make up any operating deficit incurred by the association during the
25.15period of declarant control. The existence and amount, if any, of the operating deficit shall
25.16be determined using the accrual basis of accounting applied as of the date of termination
25.17of the period of declarant control, regardless of the accounting methodology previously
25.18used by the association to maintain its accounts.
25.19 (b) The replacement reserve component of the common expenses shall be funded for
25.20each unit in accordance with the projected annual budget required by section
25.21515B.4-102(a)(23) provided that the funding of replacement reserves with respect to a unit
25.22shall commence no later than the date that the unit or any building located within the unit
25.23boundaries is substantially completed. Substantial completion shall be evidenced by a
25.24certificate of occupancy in any jurisdiction that issues the certificate.
25.25 (c) After an assessment has been levied by the association, assessments shall be levied
25.26at least annually, based upon a budget approved at least annually by the association. The
25.27association shall provide each member of the homeowners association with a copy of the
25.28proposed annual budget prior to the annual meeting at which the budget is to be approved
25.29and allow member input on the budget prior to or during the meeting.
25.30 (d) Except as modified by subsections (a)(1) and (2), (e), (f), and (g), all common
25.31expenses shall be assessed against all the units in accordance with the allocations established
25.32by the declaration pursuant to section 515B.2-108.
25.33 (e) Unless otherwise required by the declaration:
25Article 1 Sec. 10.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 26.1 (1) any common expense associated with the maintenance, repair, or replacement of a
26.2limited common element shall be assessed against the units to which that limited common
26.3element is assigned, equally, or in any other proportion the declaration provides;
26.4 (2) any common expense or portion thereof benefiting fewer than all of the units may
26.5be assessed exclusively against the units benefited, equally, or in any other proportion the
26.6declaration provides;
26.7 (3) the costs of insurance may be assessed in proportion to risk or coverage, and the
26.8costs of utilities may be assessed in proportion to usage;
26.9 (4) subject to subsection (k) and section 515B.3-102(a)(11), reasonable attorney fees
26.10and costs incurred by the association in connection with (i) the collection of assessments
26.11against a unit owner, and (ii) the enforcement of this chapter, the articles, bylaws, declaration,
26.12or rules and regulations against a unit owner, may be assessed against the unit owner's unit
26.13subject to section 515B.3-116(h), provided that the attorney fees and costs for enforcement
26.14and collection may not exceed $1,500 and no fees or costs may be assessed if the association
26.15uses a collection agency as defined in section 332.31 if the fees of the collection agency are
26.16contingent on the amount collected; and
26.17 (5) subject to subsection (k), fees, charges, late charges, and fines and interest may be
26.18assessed as provided in section 515B.3-116(a).
26.19 (f) Assessments levied under section 515B.3-116 to pay a judgment against the association
26.20may be levied only against the units in the common interest community at the time the
26.21judgment was entered, in proportion to their common expense liabilities.
26.22 (g) If any damage to the common elements or another unit is caused by the act or omission
26.23of any unit owner, or occupant of a unit, or their invitees, the association may assess the
26.24costs of repairing the damage exclusively against the unit owner's unit to the extent not
26.25covered by insurance.
26.26 (h) Subject to any shorter period specified by the declaration or bylaws, if any installment
26.27of an assessment becomes more than 60 days past due, then the association may, upon ten
26.28days' written notice to the unit owner, declare the entire amount of the assessment
26.29immediately due and payable in full, except that any portion of the assessment that represents
26.30installments that are not due and payable without acceleration as of the date of reinstatement
26.31must not be included in the amount that a unit owner must pay to reinstate under section
26.32580.30 or chapter 581.
26Article 1 Sec. 10.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 27.1 (i) If common expense liabilities are reallocated for any purpose authorized by this
27.2chapter, common expense assessments and any installment thereof not yet due shall be
27.3recalculated in accordance with the reallocated common expense liabilities.
27.4 (j) An assessment against fewer than all of the units must be levied within three years
27.5after the event or circumstances forming the basis for the assessment, or shall be barred.
27.6 (k) An association must offer a unit owner a reasonable payment agreement and take
27.7into consideration the financial circumstances of the unit owner.
27.8 (k) (l) This section applies only to common interest communities created before August
27.91, 2010.
27.10 EFFECTIVE DATE.This section is effective January 1, 2026.
27.11Sec. 11. Minnesota Statutes 2024, section 515B.3-1151, is amended to read:
27.12 515B.3-1151 ASSESSMENTS FOR COMMON EXPENSES; CIC CREATED ON
27.13OR AFTER AUGUST 1, 2010.
27.14 (a) The association shall approve an annual budget of common expenses at or prior to
27.15the conveyance of the first unit in the common interest community to a purchaser and
27.16annually thereafter. The association shall provide each member of the homeowners
27.17association with a copy of the proposed annual budget prior to the annual meeting at which
27.18the budget is to be approved and allow member input on the budget prior to or during the
27.19meeting. The annual budget shall include all customary and necessary operating expenses
27.20and replacement reserves for the common interest community, consistent with this section
27.21and section 515B.3-114. For purposes of replacement reserves under subsection (b), until
27.22an annual budget has been approved, the reserves shall be paid based upon the budget
27.23contained in the disclosure statement required by section 515B.4-102. The obligation of a
27.24unit owner to pay common expenses shall be as follows:
27.25 (1) If a common expense assessment has not been levied by the association, the declarant
27.26shall pay all common expenses of the common interest community, including the payment
27.27of the replacement reserve component of the common expenses for all units in compliance
27.28with subsection (b).
27.29 (2) If a common expense assessment has been levied by the association, all unit owners,
27.30including the declarant, shall pay the assessments levied against their units, except as follows:
27.31 (i) The declaration may provide for an alternate common expense plan whereby the
27.32declarant's common expense liability, and the corresponding assessment lien against the
27Article 1 Sec. 11.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 28.1units owned by the declarant, is limited to: (A) paying when due, in compliance with
28.2subsection (b), an amount equal to the full share of the replacement reserves allocated to
28.3units owned by the declarant, as set forth in the association's annual budget approved as
28.4provided in this subsection; and (B) paying when due all accrued expenses of the common
28.5interest community in excess of the aggregate assessments payable with respect to units
28.6owned by persons other than a declarant; provided, that the alternate common expense plan
28.7shall not affect a declarant's obligation to make up any operating deficit pursuant to item
28.8(iv), and shall terminate upon the termination of any period of declarant control unless
28.9terminated earlier pursuant to item (iii).
28.10 (ii) The alternate common expense plan may be authorized only by including in the
28.11declaration and the disclosure statement required by section 515B.4-102 provisions
28.12authorizing and disclosing the alternate common expense plan as described in item (i), and
28.13including in the disclosure statement either (A) a statement that the alternate common
28.14expense plan will have no effect on the level of services or amenities anticipated by the
28.15association's budget contained in the disclosure statement, or (B) a statement describing
28.16how the services or amenities may be affected.
28.17 (iii) A declarant shall give notice to the association of its intent to utilize the alternate
28.18common expense plan and a commencement date after the date the notice is given. The
28.19alternate common expense plan shall be valid only for periods after the notice is given. A
28.20declarant may terminate its right to utilize the alternate common expense plan prior to the
28.21termination of the period of declarant control only by giving notice to the association and
28.22the unit owners at least 30 days prior to a selected termination date set forth in the notice.
28.23 (iv) If a declarant utilizes an alternate common expense plan, that declarant shall cause
28.24to be prepared and delivered to the association, at the declarant's expense, within 90 days
28.25after the termination of the period of declarant control, an audited balance sheet and profit
28.26and loss statement certified to the association and prepared by an accountant having the
28.27qualifications set forth in section 515B.3-121(b). The audit shall be binding on the declarant
28.28and the association.
28.29 (v) If the audited profit and loss statement shows an accumulated operating deficit, the
28.30declarant shall be obligated to make up the deficit within 15 days after delivery of the audit
28.31to the association, and the association shall have a claim against the declarant for an amount
28.32equal to the deficit until paid. A declarant who does not utilize an alternate common expense
28.33plan is not liable to make up any operating deficit. If more than one declarant utilizes an
28.34alternate common expense plan, all declarants who utilize the plan are jointly and severally
28.35liable to the association for any operating deficit.
28Article 1 Sec. 11.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 29.1 (vi) The existence and amount, if any, of the operating deficit shall be determined using
29.2the accrual method of accounting applied as of the date of termination of the period of
29.3declarant control, regardless of the accounting methodology previously used by the
29.4association to maintain its accounts.
29.5 (vii) Unless approved by a vote of the unit owners other than the declarant and its
29.6affiliates, the operating deficit shall not be made up, prior to the election by the unit owners
29.7of a board of directors pursuant to section 515B.3-103(d), through the use of a special
29.8assessment described in subsection (c) or by assessments described in subsections (e), (f),
29.9and (g).
29.10 (viii) The use by a declarant of an alternate common expense plan shall not affect the
29.11obligations of the declarant or the association as provided in the declaration, the bylaws, or
29.12this chapter, or as represented in the disclosure statement required by section 515B.4-102,
29.13except as to matters authorized by this chapter.
29.14 (b) The replacement reserves required by section 515B.3-114 shall be paid to the
29.15association by each unit owner for each unit owned by that unit owner in accordance with
29.16the association's annual budget approved pursuant to subsection (a), regardless of whether
29.17an annual assessment has been levied or whether the declarant has utilized an alternate
29.18common expense plan under subsection (a)(2). Replacement reserves shall be paid with
29.19respect to a unit commencing as of the later of (1) the date of creation of the common interest
29.20community or (2) the date that the structure and exterior of the building containing the unit,
29.21or the structure and exterior of any building located within the unit boundaries, but excluding
29.22the interior finishing of the structure itself, are substantially completed. If the association
29.23has not approved an annual budget as of the commencement date for the payment of
29.24replacement reserves, then the reserves shall be paid based upon the budget contained in
29.25the disclosure statement required by section 515B.4-102.
29.26 (c) After an assessment has been levied by the association, assessments shall be levied
29.27at least annually, based upon an annual budget approved by the association. In addition to
29.28and not in lieu of annual assessments, an association may, if so provided in the declaration,
29.29levy special assessments against all units in the common interest community based upon
29.30the same formula required by the declaration for levying annual assessments. Special
29.31assessments may be levied only (1) to cover expenditures of an emergency nature, (2) to
29.32replenish underfunded replacement reserves, (3) to cover unbudgeted capital expenditures
29.33or operating expenses, or (4) to replace certain components of the common interest
29.34community described in section 515B.3-114(a), if such alternative method of funding is
29.35approved under section 515B.3-114(a)(5). The association may also levy assessments against
29Article 1 Sec. 11.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 30.1fewer than all units as provided in subsections (e), (f), and (g). An assessment under
30.2subsection (e)(2) for replacement reserves is subject to the requirements of section
30.3515B.3-1141(a)(5).
30.4 (d) Except as modified by subsections (a), clauses paragraphs (1) and (2), (e), (f), and
30.5(g), all common expenses shall be assessed against all the units in accordance with the
30.6allocations established by the declaration pursuant to section 515B.2-108.
30.7 (e) Unless otherwise required by the declaration:
30.8 (1) any common expense associated with the maintenance, repair, or replacement of a
30.9limited common element shall be assessed against the units to which that limited common
30.10element is assigned, equally, or in any other proportion the declaration provides;
30.11 (2) any common expense or portion thereof benefiting fewer than all of the units may
30.12be assessed exclusively against the units benefited, equally, or in any other proportion the
30.13declaration provides;
30.14 (3) the costs of insurance may be assessed in proportion to risk or coverage, and the
30.15costs of utilities may be assessed in proportion to usage;
30.16 (4) subject to subsection (k) and section 515B.3-102(a)(11), reasonable attorney fees
30.17and costs incurred by the association in connection with (i) the collection of assessments,
30.18and (ii) the enforcement of this chapter, the articles, bylaws, declaration, or rules and
30.19regulations, against a unit owner, may be assessed against the unit owner's unit, subject to
30.20section 515B.3-116(h), provided that the attorney fees and costs for enforcement and
30.21collection may not exceed $1,500 and no fees or costs may be assessed if the association
30.22uses a collection agency as defined in section 332.31 if the fees of the collection agency are
30.23contingent on the amount collected; and
30.24 (5) subject to subsection (k), fees, charges, late charges, and fines, and interest may be
30.25assessed as provided in section 515B.3-116(a).
30.26 (f) Assessments levied under section 515B.3-116 to pay a judgment against the association
30.27may be levied only against the units in the common interest community at the time the
30.28judgment was entered, in proportion to their common expense liabilities.
30.29 (g) If any damage to the common elements or another unit is caused by the act or omission
30.30of any unit owner, or occupant of a unit, or their invitees, the association may assess the
30.31costs of repairing the damage exclusively against the unit owner's unit to the extent not
30.32covered by insurance.
30Article 1 Sec. 11.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 31.1 (h) Subject to any shorter period specified by the declaration or bylaws, if any installment
31.2of an assessment becomes more than 60 days past due, then the association may, upon ten
31.3days' written notice to the unit owner, declare the entire amount of the assessment
31.4immediately due and payable in full, except that any portion of the assessment that represents
31.5installments that are not due and payable without acceleration as of the date of reinstatement
31.6must not be included in the amount that a unit owner must pay to reinstate under section
31.7580.30 or chapter 581.
31.8 (i) If common expense liabilities are reallocated for any purpose authorized by this
31.9chapter, common expense assessments and any installment thereof not yet due shall be
31.10recalculated in accordance with the reallocated common expense liabilities.
31.11 (j) An assessment against fewer than all of the units must be levied within three years
31.12after the event or circumstances forming the basis for the assessment, or shall be barred.
31.13 (k) An association must offer a unit owner a reasonable payment agreement and take
31.14into consideration the financial circumstances of the unit owner.
31.15 (k) (l) This section applies only to common interest communities created on or after
31.16August 1, 2010.
31.17 EFFECTIVE DATE.This section is effective January 1, 2026.
31.18Sec. 12. Minnesota Statutes 2024, section 515B.3-116, is amended to read:
31.19 515B.3-116 LIEN FOR ASSESSMENTS.
31.20 (a) The association has a lien on a unit for any assessment levied against that unit from
31.21the time the assessment becomes due. If an assessment is payable in installments, the full
31.22amount of the assessment is a lien from the time the first installment thereof becomes due.
31.23Unless the declaration otherwise provides, fees, charges, and late charges, fines and interest
31.24charges pursuant to section 515B.3-102(a)(10), (11) and (12) are liens, and are enforceable
31.25as assessments, under this section. Recording of the declaration constitutes record notice
31.26and perfection of any assessment lien under this section, and no further recording of any
31.27notice of or claim for the lien is required.
31.28 (b) Subject to subsection (c), a lien under this section is prior to all other liens and
31.29encumbrances on a unit except (i) liens and encumbrances recorded before the declaration
31.30and, in a cooperative, liens and encumbrances which the association creates, assumes, or
31.31takes subject to, (ii) any first mortgage encumbering the fee simple interest in the unit, or,
31.32in a cooperative, any first security interest encumbering only the unit owner's interest in the
31.33unit, (iii) liens for real estate taxes and other governmental assessments or charges against
31Article 1 Sec. 12.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 32.1the unit, and (iv) a master association lien under section 515B.2-121(h). This subsection
32.2shall not affect the priority of mechanic's liens.
32.3 (c) If a first mortgage on a unit is foreclosed, the first mortgage was recorded after June
32.41, 1994, and no owner or person who acquires the owner's interest in the unit redeems
32.5pursuant to chapter 580, 581, or 582, the holder of the sheriff's certificate of sale from the
32.6foreclosure of the first mortgage or any person who acquires title to the unit by redemption
32.7as a junior creditor shall take title to the unit subject to a lien in favor of the association for
32.8unpaid assessments for common expenses levied pursuant to section 515B.3-115(a), (e)(1)
32.9to (3), (f), and (i) which became due, without acceleration, during the six months immediately
32.10preceding the end of the owner's period of redemption. The common expenses shall be
32.11based upon the association's then current annual budget, notwithstanding the use of an
32.12alternate common expense plan under section 515B.3-115(a)(2). If a first security interest
32.13encumbering a unit owner's interest in a cooperative unit which is personal property is
32.14foreclosed, the secured party or the purchaser at the sale shall take title to the unit subject
32.15to unpaid assessments for common expenses levied pursuant to section 515B.3-115(a),
32.16(e)(1) to (3), (f), and (i) which became due, without acceleration, during the six months
32.17immediately preceding the first day following either the disposition date pursuant to section
32.18336.9-610 or the date on which the obligation of the unit owner is discharged pursuant to
32.19section 336.9-622.
32.20 (d) Proceedings to enforce an assessment lien shall be instituted within three years after
32.21the last installment of the assessment becomes payable, or shall be barred.
32.22 (e) The unit owner of a unit at the time an assessment is due shall be personally liable
32.23to the association for payment of the assessment levied against the unit. If there are multiple
32.24owners of the unit, they shall be jointly and severally liable.
32.25 (f) This section does not prohibit actions to recover sums for which subsection (a) creates
32.26a lien nor prohibit an association from taking a deed in lieu of foreclosure.
32.27 (g) The association shall furnish to a unit owner or the owner's authorized agent upon
32.28written request of the unit owner or the authorized agent a statement setting forth the amount
32.29of unpaid assessments currently levied against the owner's unit. If the unit owner's interest
32.30is real estate, the statement shall be in recordable form. The statement shall be furnished
32.31within ten business days after receipt of the request and is binding on the association and
32.32every unit owner.
32.33 (h) The association's lien may be foreclosed as provided in this subsection. In no case
32.34may an association's lien be foreclosed for unpaid fines. Not including attorney fees, when
32Article 1 Sec. 12.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 33.1unpaid fees, charges, and late charges are properly issued pursuant to section 515B.3-102,
33.2subsection (a), paragraphs (10), (11), and (12), an association may begin a foreclosure when
33.3the total amount owed is $5,000 or more and that amount has been outstanding for 180 days
33.4or more.
33.5 (1) In a condominium or planned community, the association's lien may be foreclosed
33.6in a like manner as a mortgage containing a power of sale pursuant to chapter 580, or by
33.7action pursuant to chapter 581. The association shall have a power of sale to foreclose the
33.8lien pursuant to chapter 580, except that any portion of the assessment that represents
33.9attorney fees or costs shall not be included in the amount a unit owner must pay to reinstate
33.10under section 580.30 or chapter 581.
33.11 (2) In a cooperative whose unit owners' interests are real estate, the association's lien
33.12shall be foreclosed in a like manner as a mortgage on real estate as provided in paragraph
33.13(1).
33.14 (3) In a cooperative whose unit owners' interests in the units are personal property, the
33.15association's lien shall be foreclosed in a like manner as a security interest under article 9
33.16of chapter 336. In any disposition pursuant to section 336.9-610 or retention pursuant to
33.17sections 336.9-620 to 336.9-622, the rights of the parties shall be the same as those provided
33.18by law, except (i) notice of sale, disposition, or retention shall be served on the unit owner
33.1990 days prior to sale, disposition, or retention, (ii) the association shall be entitled to its
33.20reasonable costs and attorney fees not exceeding the amount provided by section 582.01,
33.21subdivision 1a, (iii) the amount of the association's lien shall be deemed to be adequate
33.22consideration for the unit subject to disposition or retention, notwithstanding the value of
33.23the unit, and (iv) the notice of sale, disposition, or retention shall contain the following
33.24statement in capital letters with the name of the association or secured party filled in:
33.25 "THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of association or
33.26secured party) HAS BEGUN PROCEEDINGS UNDER MINNESOTA STATUTES,
33.27CHAPTER 515B, TO FORECLOSE ON YOUR INTEREST IN YOUR UNIT FOR THE
33.28REASON SPECIFIED IN THIS NOTICE. YOUR INTEREST IN YOUR UNIT WILL
33.29TERMINATE 90 DAYS AFTER SERVICE OF THIS NOTICE ON YOU UNLESS
33.30BEFORE THEN:
33.31 (a) THE PERSON AUTHORIZED BY (fill in the name of association or secured party)
33.32AND DESCRIBED IN THIS NOTICE TO RECEIVE PAYMENTS RECEIVES FROM
33.33YOU:
33.34 (1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS
33Article 1 Sec. 12.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 34.1 (2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS
34.2 (3) $500 TO APPLY TO ATTORNEY FEES ACTUALLY EXPENDED OR
34.3INCURRED; PLUS
34.4 (4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO (fill
34.5in name of association or secured party) AFTER THE DATE OF THIS NOTICE; OR
34.6 (b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
34.7FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL YOUR
34.8CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR
34.9SETTLEMENT. YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND
34.10GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.
34.11 IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS WITHIN
34.12THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP RIGHTS IN
34.13YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU WILL LOSE
34.14ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL LOSE YOUR
34.15RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR RIGHT TO
34.16ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND YOU WILL
34.17BE EVICTED. IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT
34.18AN ATTORNEY IMMEDIATELY."
34.19 (4) In any foreclosure pursuant to chapter 580, 581, or 582, the rights of the parties shall
34.20be the same as those provided by law, except (i) the period of redemption for unit owners
34.21shall be six months from the date of sale or a lesser period authorized by law, (ii) in a
34.22foreclosure by advertisement under chapter 580, the foreclosing party shall be entitled to
34.23costs and disbursements of foreclosure and attorney fees authorized by the declaration or
34.24bylaws, notwithstanding the provisions of section 582.01, subdivisions 1 and 1a, as specified
34.25in section 582.01, subdivision 1, up to a maximum of $1,000, (iii) in a foreclosure by action
34.26under chapter 581, the foreclosing party shall be entitled to costs and disbursements of
34.27foreclosure and attorney fees as the court shall determine, and (iv) the amount of the
34.28association's lien shall be deemed to be adequate consideration for the unit subject to
34.29foreclosure, notwithstanding the value of the unit.
34.30 (i) If a holder of a sheriff's certificate of sale, prior to the expiration of the period of
34.31redemption, pays any past due or current assessments, or any other charges lienable as
34.32assessments, with respect to the unit described in the sheriff's certificate, then the amount
34.33paid shall be a part of the sum required to be paid to redeem under section 582.03.
34Article 1 Sec. 12.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 35.1 (j) In a cooperative, if the unit owner fails to redeem before the expiration of the
35.2redemption period in a foreclosure of the association's assessment lien, the association may
35.3bring an action for eviction against the unit owner and any persons in possession of the unit,
35.4and in that case section 504B.291 shall not apply.
35.5 (k) An association may assign its lien rights in the same manner as any other secured
35.6party.
35.7 EFFECTIVE DATE.This section is effective January 1, 2026.
35.8 Sec. 13. [515B.3-122] REQUIREMENT TO MEET AND CONFER.
35.9 Subdivision 1.Enforcement action defined.For the purposes of this section,
35.10"enforcement action" means any attempt by an association, management company, or an
35.11attorney or other person on behalf of the association or management company, to collect a
35.12disputed assessment, fine, late fee, or other charge, or a civil action or proceeding, other
35.13than a cross-complaint, involving rights, duties, or liabilities under this chapter or any other
35.14law, or the governing documents of a common interest community or association, including
35.15the foreclosure of an association's lien pursuant to section 515B.3-116.
35.16 Subd. 2.Meet and confer process.Prior to an association taking any enforcement
35.17action, the association and the unit owner must engage in a meet and confer process in an
35.18effort to resolve any dispute between the association and the unit owner involving their
35.19respective rights, duties, or liabilities under this chapter or any other section of law, or under
35.20the governing documents of the common interest community or association. The association's
35.21board must designate a member of the board to meet and confer with the unit owner. The
35.22parties must meet as soon as practicable at a mutually convenient time and place. At the
35.23meeting, each party must be given reasonable time to present their positions and must confer
35.24in good faith to seek a resolution to the dispute. If the meet and confer process results in
35.25the resolution of the dispute, the resolution must be in writing and signed by both a board
35.26member and the unit owner. The signed agreement binds the parties and is judicially
35.27enforceable. A unit owner must not be charged any fees, including any attorney fees, to
35.28participate in the meet and confer process.
35.29 EFFECTIVE DATE.This section is effective January 1, 2026.
35.30Sec. 14. [515B.3-125] LEGAL FEES; NOTICE REQUIRED.
35.31 (a) Prior to referring a unit owner's inquiry to an attorney, the board must provide a
35.32notice to the unit owner with the following information:
35Article 1 Sec. 14.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 36.1 (1) a statement that the board plans to refer the matter at issue to an attorney;
36.2 (2) the name of the person responsible for payment of any resulting legal fees; and
36.3 (3) an estimate of the legal fees the attorney may charge or has charged for similar work.
36.4 (b) The board must provide the notification under subsection (a) at no cost to the unit
36.5owner.
36.6 (c) The board must provide to a unit owner an itemized invoice for any legal fees charged
36.7to the unit owner detailing the attorney's rate, the time the attorney spent on the matter, the
36.8specific services the attorney provided, and the date or dates of service.
36.9 EFFECTIVE DATE.This section is effective January 1, 2026.
36.10Sec. 15. Minnesota Statutes 2024, section 515B.4-102, is amended to read:
36.11 515B.4-102 DISCLOSURE STATEMENT; GENERAL PROVISIONS; CIC
36.12CREATED BEFORE AUGUST 1, 2010.
36.13 (a) A disclosure statement shall fully and accurately disclose:
36.14 (1) the name and, if available, the number of the common interest community;
36.15 (2) the name and principal address of the declarant;
36.16 (3) the number of units which the declarant has the right to include in the common
36.17interest community and a statement that the common interest community is either a
36.18condominium, cooperative, or planned community;
36.19 (4) a general description of the common interest community, including, at a minimum,
36.20(i) the number of buildings, (ii) the number of dwellings per building, (iii) the type of
36.21construction, (iv) whether the common interest community involves new construction or
36.22rehabilitation, (v) whether any building was wholly or partially occupied, for any purpose,
36.23before it was added to the common interest community and the nature of the occupancy,
36.24and (vi) a general description of any roads, trails, or utilities that are located on the common
36.25elements and that the association or a master association will be required to maintain;
36.26 (5) declarant's schedule of commencement and completion of construction of any
36.27buildings and other improvements that the declarant is obligated to build pursuant to section
36.28515B.4-117;
36.29 (6) any expenses or services, not reflected in the budget, that a declarant pays or provides,
36.30which may become a common expense; the projected common expense attributable to each
36Article 1 Sec. 15.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 37.1of those expenses or services; and an explanation of declarant's limited assessment liability
37.2under section 515B.3-115(b);
37.3 (7) any initial or special fee due from the purchaser to the declarant or the association
37.4at closing, together with a description of the purpose and method of calculating the fee;
37.5 (8) identification of any liens, defects, or encumbrances which will continue to affect
37.6the title to a unit or to any real property owned by the association after the contemplated
37.7conveyance;
37.8 (9) a description of any financing offered or arranged by the declarant;
37.9 (10) a statement as to whether application has been made for any project approvals for
37.10the common interest community from the Federal National Mortgage Association (FNMA),
37.11Federal Home Loan Mortgage Corporation (FHLMC), Department of Housing and Urban
37.12Development (HUD) or Department of Veterans Affairs (VA), and which, if any, such final
37.13approvals have been received;
37.14 (11) the terms of any warranties provided by the declarant, including copies of sections
37.15515B.4-112 through 515B.4-115, and any other applicable statutory warranties, and a
37.16statement of any limitations on the enforcement of the applicable warranties or on damages;
37.17 (12) a statement that: (i) within ten days after the receipt of a disclosure statement, a
37.18purchaser may cancel any contract for the purchase of a unit from a declarant; provided,
37.19that the right to cancel terminates upon the purchaser's voluntary acceptance of a conveyance
37.20of the unit from the declarant or by the purchaser agreeing to modify or waive the right to
37.21cancel in the manner provided by section 515B.4-106(a); (ii) if a purchaser receives a
37.22disclosure statement more than ten days before signing a purchase agreement, the purchaser
37.23cannot cancel the purchase agreement; and (iii) if a declarant obligated to deliver a disclosure
37.24statement fails to deliver a disclosure statement which substantially complies with this
37.25chapter to a purchaser to whom a unit is conveyed, the declarant shall be liable to the
37.26purchaser as provided in section 515B.4-106(d);
37.27 (13) a statement disclosing to the extent of the declarant's or an affiliate of a declarant's
37.28actual knowledge, after reasonable inquiry, any unsatisfied judgments or lawsuits to which
37.29the association is a party, and the status of those lawsuits which are material to the common
37.30interest community or the unit being purchased;
37.31 (14) a statement (i) describing the conditions under which earnest money will be held
37.32in and disbursed from the escrow account, as set forth in section 515B.4-109, (ii) that the
37Article 1 Sec. 15.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 38.1earnest money will be returned to the purchaser if the purchaser cancels the contract pursuant
38.2to section 515B.4-106, and (iii) setting forth the name and address of the escrow agent;
38.3 (15) a detailed description of the insurance coverage provided by the association for the
38.4benefit of unit owners, including a statement as to which, if any, of the items referred to in
38.5section 515B.3-113, subsection (b), are insured by the association;
38.6 (16) any current or expected fees or charges, other than assessments for common
38.7expenses, to be paid by unit owners for the use of the common elements or any other
38.8improvements or facilities;
38.9 (17) the financial arrangements, including any contingencies, which have been made to
38.10provide for completion of all improvements that the declarant is obligated to build pursuant
38.11to section 515B.4-118, or a statement that no such arrangements have been made;
38.12 (18) in a cooperative: (i) whether the unit owners will be entitled for federal and state
38.13tax purposes, to deduct payments made by the association for real estate taxes and interest
38.14paid to the holder of a security interest encumbering the cooperative; (ii) a statement as to
38.15the effect on the unit owners if the association fails to pay real estate taxes or payments due
38.16the holder of a security interest encumbering the cooperative; and (iii) the principal amount
38.17and a general description of the terms of any blanket mortgage, contract for deed, or other
38.18blanket security instrument encumbering the cooperative property;
38.19 (19) a statement: (i) that real estate taxes for the unit or any real property owned by the
38.20association are not delinquent or, if there are delinquent real estate taxes, describing the
38.21property for which the taxes are delinquent, stating the amount of the delinquent taxes,
38.22interest and penalties, and stating the years for which taxes are delinquent, and (ii) setting
38.23forth the amount of real estate taxes, including the amount of any special assessment certified
38.24for payment with the real estate taxes, due and payable with respect to the unit in the year
38.25in which the disclosure statement is given, if real estate taxes have been separately assessed
38.26against the unit;
38.27 (20) if the association or the purchaser of the unit will be a member of a master
38.28association, a statement to that effect, and all of the following information with respect to
38.29the master association: (i) a copy of the master declaration, the articles of incorporation,
38.30bylaws, and rules and regulations for the master association, together with any amendments
38.31thereto; (ii) the name, address and general description of the master association, including
38.32a general description of any other association, unit owners, or other persons which are or
38.33may become members; (iii) a description of any nonresidential use permitted on any property
38.34subject to the master association; (iv) a statement as to the estimated maximum number of
38Article 1 Sec. 15.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 39.1associations, unit owners or other persons which may become members of the master
39.2association, and the degree and period of control of the master association by a declarant
39.3or other person; (v) a description of any facilities intended for the benefit of the members
39.4of the master association and not located on property owned or controlled by a member or
39.5the master association; (vi) the financial arrangements, including any contingencies, which
39.6have been made to provide for completion of the facilities referred to in subsection (v), or
39.7a statement that no arrangements have been made; (vii) any current balance sheet of the
39.8master association and a projected or current annual budget, as applicable, which budget
39.9shall include with respect to the master association those items in paragraph (23), clauses
39.10(i) through (iii), and the projected monthly common expense assessment for each type of
39.11unit, lot, or other parcel of real estate which is or is planned to be subject to assessment;
39.12(viii) a description of any expenses or services not reflected in the budget, paid for or
39.13provided by a declarant or a person executing the master declaration, which may become
39.14an expense of the master association in the future; (ix) a description of any powers delegated
39.15to and accepted by the master association pursuant to section 515B.2-121(f)(2); (x)
39.16identification of any liens, defects or encumbrances that will continue to affect title to
39.17property owned or operated by the master association for the benefit of its members; (xi)
39.18the terms of any warranties provided by any person for construction of facilities in which
39.19the members of the master association have or may have an interest, and any known defects
39.20in the facilities which would violate the standards described in section 515B.4-112(b); (xii)
39.21a statement disclosing, after inquiry of the master association, any unsatisfied judgments
39.22or lawsuits to which the master association is a party, and the status of those lawsuits which
39.23are material to the master association; (xiii) a description of any insurance coverage provided
39.24for the benefit of its members by the master association; and (xiv) any current or expected
39.25fees or charges, other than assessments by the master association, to be paid by members
39.26of the master association for the use of any facilities intended for the benefit of the members;
39.27 (21) a statement as to whether the unit will be substantially completed at the time of
39.28conveyance to a purchaser, and if not substantially completed, who is responsible to complete
39.29and pay for the construction of the unit;
39.30 (22) a copy of the declaration and any amendments thereto (exclusive of the CIC plat);
39.31any other recorded covenants, conditions, restrictions, or reservations affecting the common
39.32interest community; the articles of incorporation, bylaws and any rules or regulations of the
39.33association; any agreement excluding or modifying any implied warranties; any agreement
39.34reducing the statute of limitations for the enforcement of warranties; any contracts or leases
39.35to be signed by purchaser at closing; and a brief narrative description of any (i) contracts
39Article 1 Sec. 15.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 40.1or leases that are or may be subject to cancellation by the association under section
40.2515B.3-105 and (ii) any material agreements entered into between the declarant and a
40.3governmental entity that affect the common interest community; and
40.4 (23) a balance sheet for the association, current within 90 days; a projected annual budget
40.5for the association; and a statement identifying the party responsible for the preparation of
40.6the budget. The budget shall assume that all units intended to be included in the common
40.7interest community, based upon the declarant's good faith estimate, have been subjected to
40.8the declaration; provided, that additional budget portrayals based upon a lesser number of
40.9units are permitted. The budget shall include, without limitation: (i) a statement of the
40.10amount included in the budget as a reserve for replacement; (ii) a statement of any other
40.11reserves; (iii) the projected common expense for each category of expenditures for the
40.12association; (iv) the projected monthly common expense assessment for each type of unit;
40.13and (v) a footnote or other reference to those components of the common interest community
40.14the maintenance, repair, or replacement of which the budget assumes will be funded by
40.15assessments under section 515B.3-115(e), rather than by assessments included in the
40.16association's annual budget, and a statement referencing section 515B.3-115(e)(1) or (2),
40.17as the source of funding. If, based upon the association's then current budget, the monthly
40.18common expense assessment for the unit at the time of conveyance to the purchaser is
40.19anticipated to exceed the monthly assessment stated in the budget, a statement to such effect
40.20shall be included;
40.21 (24) a copy of any fact sheet or other publication by the attorney general and the
40.22Community Association Institute that describes, in plain language, common interest
40.23communities and homeowner associations and explains the rights and responsibilities of
40.24unit owners and associations; and
40.25 (25) the schedules of fines required under section 515B.3-102, subsections (a), paragraph
40.26(10), and (c).
40.27 (b) A declarant shall promptly amend the disclosure statement to reflect any material
40.28change in the information required by this chapter.
40.29 (c) The master association, within ten days after a request by a declarant, a holder of
40.30declarant rights, or a buyer referred to in section 515B.4-101(e), or the authorized
40.31representative of any of them, shall furnish the information required to be provided by
40.32subsection (a)(20). A declarant or other person who provides information pursuant to
40.33subsection (a)(20) is not liable to the buyer for any erroneous information if the declarant
40.34or other person: (i) is not an affiliate of or related in any way to a person authorized to
40Article 1 Sec. 15.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 41.1appoint the master association board pursuant to section 515B.2-121(c)(3), and (ii) has no
41.2actual knowledge that the information is incorrect.
41.3 (d) This section applies only to common interest communities created before August 1,
41.42010.
41.5 EFFECTIVE DATE.This section is effective January 1, 2026.
41.6 Sec. 16. Minnesota Statutes 2024, section 515B.4-1021, is amended to read:
41.7 515B.4-1021 DISCLOSURE STATEMENT; GENERAL PROVISIONS; CIC
41.8CREATED ON OR AFTER AUGUST 1, 2010.
41.9 (a) A disclosure statement shall fully and accurately disclose:
41.10 (1) the name and, if available, the number of the common interest community;
41.11 (2) the name and principal address of each declarant holding any special declarant rights;
41.12a description of the special declarant rights held by each declarant; a description of the units
41.13or additional real estate to which the respective special declarant rights apply; and a copy
41.14of any recorded transfer of special declarant rights pursuant to section 515B.3-104(a), or
41.15any instrument recorded pursuant to section 515B.3-104(b), (g), or (h);
41.16 (3) the total number of units which all declarants have the right to include in the common
41.17interest community and a statement that the common interest community is either a
41.18condominium, cooperative, or planned community;
41.19 (4) a general description of the common interest community, including, at a minimum,
41.20(i) the number of buildings, (ii) the number of dwellings per building, (iii) the type of
41.21construction, (iv) whether the common interest community involves new construction or
41.22rehabilitation, (v) whether any building was wholly or partially occupied, for any purpose,
41.23before it was added to the common interest community, and the nature of the occupancy,
41.24(vi) a general description of any roads, trails, or utilities that are located on the common
41.25elements and that the association or master association will be required to maintain, (vii) a
41.26description of any declarant licensing rights under section 515B.2-109(e), and (viii) the
41.27initial maintenance plan, initial maintenance schedule, and maintenance budget under section
41.28515B.3-107(b). The initial maintenance plan prepared by the declarant must be based on
41.29the best available information listing all building elements to which the plan will apply and
41.30the generally accepted standards of maintenance on which the plan is based. The initial plan
41.31must be dated and signed by the declarant and be fully funded by the initial budget provided
41.32by the declarant;
41Article 1 Sec. 16.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 42.1 (5) declarant's schedule of commencement and completion of construction of any
42.2buildings and other improvements that the declarant is obligated to build pursuant to section
42.3515B.4-117;
42.4 (6) any expenses or services, not reflected in the budget, that the declarant pays or
42.5provides, which may become a common expense; the projected common expense attributable
42.6to each of those expenses or services; a description of any alternate common expense plan
42.7under section 515B.3-115(a)(2)(i); and, if the declaration provides for an alternate common
42.8expense plan, either (i) a statement that the alternate common expense plan will have no
42.9effect on the level of services or amenities anticipated by the association's budget or disclosed
42.10in the disclosure statement, or (ii) a statement describing how the services or amenities may
42.11be affected;
42.12 (7) any initial or special fee due from the purchaser to the declarant or the association
42.13at closing, together with a description of the purpose and method of calculating the fee;
42.14 (8) identification of any liens, defects, or encumbrances which will continue to affect
42.15the title to a unit or to any real property owned by the association after the contemplated
42.16conveyance;
42.17 (9) a description of any financing offered or arranged by the declarant;
42.18 (10) a statement as to whether application has been made for any project approvals for
42.19the common interest community from the Federal National Mortgage Association (FNMA),
42.20Federal Home Loan Mortgage Corporation (FHLMC), Department of Housing and Urban
42.21Development (HUD), or Department of Veterans Affairs (VA), and which, if any, such
42.22final approvals have been received;
42.23 (11) the terms of any warranties provided by the declarant, including copies of sections
42.24515B.4-112 to 515B.4-115, and any other applicable statutory warranties, and a statement
42.25of any limitations on the enforcement of the applicable warranties or on damages;
42.26 (12) a statement that:
42.27 (i) within ten days after the receipt of a disclosure statement, a purchaser may cancel
42.28any contract for the purchase of a unit from a declarant; provided, that the right to cancel
42.29terminates upon the purchaser's voluntary acceptance of a conveyance of the unit from the
42.30declarant or by the purchaser agreeing to modify or waive the right to cancel in the manner
42.31provided by section 515B.4-106(a);
42.32 (ii) if a purchaser receives a disclosure statement more than ten days before signing a
42.33purchase agreement, the purchaser cannot cancel the purchase agreement; and
42Article 1 Sec. 16.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 43.1 (iii) if a declarant obligated to deliver a disclosure statement fails to deliver a disclosure
43.2statement which substantially complies with this chapter to a purchaser to whom a unit is
43.3conveyed, the declarant shall be liable to the purchaser as provided in section 515B.4-106(d);
43.4 (13) a statement disclosing to the extent of the declarant's or an affiliate of a declarant's
43.5actual knowledge, after reasonable inquiry, any unsatisfied judgments or lawsuits to which
43.6the association is a party, and the status of those lawsuits which are material to the common
43.7interest community or the unit being purchased;
43.8 (14) a statement (i) describing the conditions under which earnest money will be held
43.9in and disbursed from the escrow account, as set forth in section 515B.4-109, (ii) that the
43.10earnest money will be returned to the purchaser if the purchaser cancels the contract pursuant
43.11to section 515B.4-106, and (iii) setting forth the name and address of the escrow agent;
43.12 (15) a detailed description of the insurance coverage provided by the association for the
43.13benefit of unit owners, including a statement as to which, if any, of the items referred to in
43.14section 515B.3-113(b), are insured by the association;
43.15 (16) any current or expected fees or charges, other than assessments for common
43.16expenses, to be paid by unit owners for the use of the common elements or any other
43.17improvements or facilities;
43.18 (17) the financial arrangements, including any contingencies, which have been made to
43.19provide for completion of all improvements that the declarant is obligated to build pursuant
43.20to section 515B.4-118, or a statement that no such arrangements have been made;
43.21 (18) in a cooperative:
43.22 (i) whether the unit owners will be entitled, for federal and state tax purposes, to deduct
43.23payments made by the association for real estate taxes and interest paid to the holder of a
43.24security interest encumbering the cooperative;
43.25 (ii) a statement as to the effect on the unit owners if the association fails to pay real estate
43.26taxes or payments due the holder of a security interest encumbering the cooperative; and
43.27 (iii) the principal amount and a general description of the terms of any blanket mortgage,
43.28contract for deed, or other blanket security instrument encumbering the cooperative property;
43.29 (19) a statement:
43.30 (i) that real estate taxes for the unit or any real property owned by the association are
43.31not delinquent or, if there are delinquent real estate taxes, describing the property for which
43Article 1 Sec. 16.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 44.1the taxes are delinquent, stating the amount of the delinquent taxes, interest, and penalties,
44.2and stating the years for which taxes are delinquent; and
44.3 (ii) setting forth the amount of real estate taxes, including the amount of any special
44.4assessment certified for payment with the real estate taxes, due and payable with respect to
44.5the unit in the year in which the disclosure statement is given, if real estate taxes have been
44.6separately assessed against the unit;
44.7 (20) if the unit or other parcel of real estate being purchased is or may be subject to a
44.8master declaration at the time of the conveyance from the declarant to the purchaser, a
44.9statement to that effect, and all of the following information with respect to the master
44.10association:
44.11 (i) copies of the following documents (which may be in proposed form if the master
44.12declaration has not been recorded): the master declaration, the articles of incorporation,
44.13bylaws, and rules and regulations for the master association, together with any amendments
44.14thereto;
44.15 (ii) the name and address of the master developer, and the name, address, and general
44.16description of the master association, including a general description of any other association,
44.17unit owners, or other persons which are or may become members;
44.18 (iii) a description of any nonresidential use permitted on any property subject to the
44.19master declaration;
44.20 (iv) a statement as to the estimated maximum number of associations, unit owners, or
44.21other persons which may become members of the master association, and a description of
44.22any period of control of the master association and rights to appoint master association
44.23directors by a master developer or other person pursuant to section 515B.2-121(c);
44.24 (v) a description of any facilities intended for the benefit of the members of the master
44.25association and not located on property owned or controlled by a member of the master
44.26association;
44.27 (vi) the financial arrangements, including any contingencies, which have been made to
44.28provide for completion of the facilities referred to in subsection (v), or a statement that no
44.29arrangements have been made;
44.30 (vii) any current balance sheet of the master association and a projected or current annual
44.31budget, as applicable, which budget shall include with respect to the master association
44.32those items in paragraph (23), clauses (i) through (iii), and the projected monthly or other
44Article 1 Sec. 16.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 45.1periodic common expense assessment payment for each type of unit, lot, or other parcel of
45.2real estate which is or is planned to be subject to assessment;
45.3 (viii) a description of any expenses or services not reflected in the budget, paid for or
45.4provided by a master developer or another person executing the master declaration, which
45.5may become an expense of the master association in the future;
45.6 (ix) a description of any powers delegated to and accepted by the master association
45.7pursuant to section 515B.2-121(e)(2);
45.8 (x) identification of any liens, defects, or encumbrances that will continue to affect title
45.9to property owned or operated by the master association for the benefit of its members;
45.10 (xi) the terms of any warranties provided by any person for construction of facilities in
45.11which the members of the master association have or may have an interest, and any known
45.12defects in the facilities which would violate the standards described in section
45.13515B.4-113(b)(2);
45.14 (xii) a statement disclosing, after inquiry of the master association, any unsatisfied
45.15judgments or lawsuits to which the master association is a party, and the status of those
45.16lawsuits which are material to the master association;
45.17 (xiii) a description of any insurance coverage provided for the benefit of its members
45.18by the master association; and
45.19 (xiv) any current or expected fees or charges, other than assessments by the master
45.20association, to be paid by members of the master association for the use of any facilities
45.21intended for the benefit of the members;
45.22 (21) a statement as to whether the unit will be substantially completed at the time of
45.23conveyance to a purchaser, and, if not substantially completed, who is responsible to complete
45.24and pay for the construction of the unit;
45.25 (22) copies of the following documents (which may be in proposed form if the declaration
45.26has not been recorded): the declaration and any supplemental declaration, and any
45.27amendments thereto (exclusive of the CIC plat); any other recorded covenants, conditions,
45.28restrictions, and reservations affecting the common interest community; the articles of
45.29incorporation, bylaws, and any rules or regulations of the association; the names of the
45.30current members of the association's board of directors; any agreement excluding or
45.31modifying any implied warranties; any agreement reducing the statute of limitations for the
45.32enforcement of warranties; any contracts or leases to be signed by the purchaser at closing;
45Article 1 Sec. 16.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 46.1and a description of any material contracts, leases, or other agreements affecting the common
46.2interest community; and
46.3 (23) a balance sheet for the association, following the creation of the association, current
46.4within 90 days; a projected annual budget for the association; and a statement identifying
46.5the party responsible for the preparation of the budget. The budget shall assume that all
46.6units intended to be included in the common interest community, based upon the declarant's
46.7good faith estimate, have been subjected to the declaration; provided, that additional budget
46.8portrayals based upon a lesser number of units are permitted. The budget shall include,
46.9without limitation:
46.10 (i) a statement of the amount included in the budget as a reserve for replacement, the
46.11components of the common interest community for which the reserves are budgeted, and
46.12the amounts of the reserves, if any, that are allocated for the replacement of each of those
46.13components;
46.14 (ii) a statement of any other reserves;
46.15 (iii) the projected common expense for each category of expenditures for the association;
46.16 (iv) the projected monthly common expense assessment for each type of unit;
46.17 (v) a statement as to the components of the common interest community whose
46.18replacement will be funded by assessments under section 515B.3-115(c) or (e), rather than
46.19by replacement reserves as approved pursuant to section 515B.3-114(a). If, based upon the
46.20association's then-current budget, the monthly common expense assessment for the unit at
46.21the time of conveyance to the purchaser is anticipated to exceed the monthly assessment
46.22stated in the budget, a statement to such effect shall be included;
46.23 (24) a copy of any fact sheet or other publication by the attorney general and the
46.24Community Association Institute that describes, in plain language, common interest
46.25communities and homeowner associations and explains the rights and responsibilities of
46.26unit owners and associations; and
46.27 (25) the schedules of fines required under section 515B.3-102, subsections (a), paragraph
46.28(10), and (c).
46.29 (b) A declarant shall promptly amend the disclosure statement to reflect any material
46.30change in the information required by this chapter.
46.31 (c) The master association, within ten days after a request by a declarant, a holder of
46.32declarant rights, or a buyer referred to in section 515B.4-101(e), or the authorized
46.33representative of any of them, shall furnish the information required to be provided by
46Article 1 Sec. 16.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 47.1subsection (a)(20). A declarant or other person who provides information pursuant to
47.2subsection (a)(20), is not liable to the buyer for any erroneous information if the declarant
47.3or other person: (i) is not an affiliate of or related in any way to a person authorized to
47.4appoint the master association board pursuant to section 515B.2-121(c)(3), and (ii) has no
47.5actual knowledge that the information is incorrect.
47.6 (d) This section applies only to common interest communities created on or after August
47.71, 2010.
47.8 EFFECTIVE DATE.This section is effective January 1, 2026.
47.9 Sec. 17. Minnesota Statutes 2024, section 515B.4-116, is amended to read:
47.10 515B.4-116 RIGHTS OF ACTION; RETALIATION PROHIBITED; ATTORNEY'S
47.11FEES.
47.12 (a) In addition to any other rights to recover damages, attorney's fees, costs or expenses,
47.13whether authorized by this chapter or otherwise, if a declarant, an association, or any other
47.14person violates any provision of this chapter, or any provision of the declaration, bylaws,
47.15or rules and regulations any person or class of persons adversely affected by the failure to
47.16comply has a claim for appropriate relief. Subject to the requirements of section 515B.3-102,
47.17the association shall have standing to pursue claims on behalf of the unit owners of two or
47.18more units. An association is liable to a unit owner for actual damages and shall pay to the
47.19unit owner a civil penalty in an amount up to $1,000.
47.20 (b) The court may award reasonable attorney's fees and costs of litigation to the prevailing
47.21party. Punitive damages may be awarded for a willful failure to comply.
47.22 (c) As a condition precedent to any construction defect claim, the parties to the claim
47.23must submit the matter to mediation before a mutually agreeable neutral third party. For
47.24the purposes of this section, mediation has the meaning given under the General Rules of
47.25Practice, rule 114.02 (7). If the parties are not able to agree on a neutral third-party mediator
47.26from the roster maintained by the Minnesota Supreme Court, the parties may petition the
47.27district court in the jurisdiction in which the common interest community is located to
47.28appoint a mediator. The applicable statute of limitations and statute of repose for an action
47.29based on breach of a warranty imposed by this section, or any other action in contract, tort,
47.30or other law for any injury to real or personal property or bodily injury or wrongful death
47.31arising out of the alleged construction defect, is tolled from the date that any party makes
47.32a written demand for mediation under this section until the latest of the following:
47.33 (1) five business days after mediation is completed; or
47Article 1 Sec. 17.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 48.1 (2) 180 days.
48.2 Notwithstanding the foregoing, mediation shall not be required prior to commencement
48.3of a construction defect claim if the parties have completed home warranty dispute resolution
48.4under section 327A.051.
48.5 (d) The remedies provided for under this chapter are not exclusive and do not abrogate
48.6any remedies under other statutes or the common law, notwithstanding whether those
48.7remedies are referred to in this chapter.
48.8 (e) An association may not retaliate against a unit owner for asserting any right the unit
48.9owner has under this chapter or other law. For purposes of this subsection, "asserting any
48.10rights" includes but is not limited to filing an action in district court to enforce a right or
48.11remedy provided by this chapter, other law, or the declaration, bylaws, rules, or regulations
48.12of the association; or by filing a complaint with local authorities regarding a violation of a
48.13health, safety, housing, or building code or ordinance. An association may not decrease
48.14services or impose a fine or other penalty or charge legal fees to a unit owner, nor may the
48.15association make the resumption of services or removal of the fine, penalty, or legal fees
48.16contingent on a unit owner withdrawing an action in district court or complaint with local
48.17authorities.
48.18 EFFECTIVE DATE.This section is effective January 1, 2026.
48.19 ARTICLE 2
48.20 LOCAL GOVERNMENT PREEMPTION
48.21Section 1. Minnesota Statutes 2024, section 394.25, is amended by adding a subdivision
48.22to read:
48.23 Subd. 11.Homeowners associations.(a) A county must not condition approval of a
48.24residential building permit or conditional use permit; residential subdivision development
48.25or residential planned unit development; or any other permit related to residential
48.26development on the:
48.27 (1) creation of a homeowners association;
48.28 (2) inclusion of any service, feature, or common property necessitating a homeowners
48.29association;
48.30 (3) inclusion of any terms in a homeowners association declaration, bylaws, articles of
48.31incorporation, or any other governing document that is not required under state law; or
48Article 2 Section 1.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 49.1 (4) adoption or revocation of, or amendment to, a rule or regulation governing the
49.2homeowners association or its members.
49.3 (b) A county must not take any action that requires a residential property to be part of
49.4a homeowners association or provide an incentive for such membership. A county must not
49.5require or incentivize a homeowners association to adopt, revoke, or amend a term in any
49.6governing document or a rule or regulation not required under state law.
49.7 (c) Nothing in this section prohibits a county from ensuring private common areas or
49.8facilities within a development comply with maintenance, insurance, and other requirements
49.9under applicable state law, including under chapter 515, 515A, or 515B.
49.10Sec. 2. [462.3577] MUNICIPALITIES; HOMEOWNERS ASSOCIATIONS.
49.11 (a) A municipality, joint planning board, or public corporation must not condition
49.12approval of a residential building permit or conditional use permit; residential subdivision
49.13development or residential planned unit development; or any other permit related to
49.14residential development on the:
49.15 (1) creation of a homeowners association;
49.16 (2) inclusion of any service, feature, or common property necessitating a homeowners
49.17association;
49.18 (3) inclusion of any terms in a homeowners association declaration, bylaws, articles of
49.19incorporation, or any other governing document that is not required under state law; or
49.20 (4) adoption or revocation of, or amendment to, a rule or regulation governing the
49.21homeowners association or its members.
49.22 (b) A municipality, joint planning board, public corporation, or the Metropolitan Council
49.23must not take any action that requires a residential property to be part of a homeowners
49.24association or provide an incentive for such membership. A municipality, joint planning
49.25board, public corporation, or the Metropolitan Council must not require or incentivize a
49.26homeowners association to adopt, revoke, or amend a term in any governing document or
49.27a rule or regulation not required under state law.
49.28 (c) Nothing in this section prohibits a municipality from ensuring private common areas
49.29or facilities within a development comply with maintenance, insurance, and other
49.30requirements under applicable state law, including under chapter 515, 515A, or 515B.
49Article 2 Sec. 2.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT 50.1 Sec. 3. Laws 2024, chapter 96, article 2, section 13, is amended to read:
50.2 Sec. 13. EFFECTIVE DATE.
50.3 This article is effective August 1, 2025 2026.
50.4 Sec. 4. REPEALER.
50.5 Minnesota Statutes 2024, section 308C.003, subdivision 3, is repealed.
50Article 2 Sec. 4.
REVISOR MS H1268-1HF1268 FIRST ENGROSSMENT Page.Ln 1.14COMMON INTEREST COMMUNITIES.............................................ARTICLE 1
Page.Ln 48.19LOCAL GOVERNMENT PREEMPTION............................................ARTICLE 2
1
APPENDIX
Article locations for H1268-1 308C.003 APPLICATION OF OTHER STATUTES.
Subd. 3.Chapter 515B prevails.In the event of a conflict between this chapter and chapter
515B, chapter 515B shall control.
1R
APPENDIX
Repealed Minnesota Statutes: H1268-1