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S.F. No. 1455 - Minnesota Common Interest Ownership Act – Construction Defect Claims
Author: Senator Kari Dziedzic
Prepared By: Kathleen Pontius, Senate Counsel (651/296-4394)
Date: March 16, 2017


Section 1 adds a definition of “construction defect claim” to the Minnesota Common Interest Ownership Act.  It would include various actions and claims involving a defect in the design or construction of an improvement to real property that is part of a common interest community.  “Development party” is also defined.

Section 2 amends the powers of the unit owner’s association, requiring notice to unit owners and approval before proceeding with construction defect litigation.  The association may intervene as a third party or assert a claim as long as the unit owners are notified within 75 days.

Section 3 amends the statute governing upkeep of the common interest community to make damages to common elements the responsibility of the unit owner or association who caused the damage.  It also requires the board of directors to have a maintenance plan and schedule and gives existing common interest communities until January 1, 2019, to comply with these requirements.

Section 4 contains an exception to attorney fee awards in actions against a declarant related to construction defect claims brought by the association or a unit owner.

Section 5 requires a disclosure statement to include the initial maintenance plan and schedule required under section 3.

Section 6 amends the implied warranty statute to provide that a development party is not liable for losses and damages caused by the association’s failure to follow a maintenance plan or schedule.

Section 7 contains an exception to attorney fee awards for construction defect litigation and requires defect claims to go to mediation before pursuing the claim, except when the parties have completed home warranty dispute resolution.

Section 8 contains the effective date.  The act would be effective August 1, 2017, and apply to construction defect claims commenced on or after that date.

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