1.1Senator Lucero moved to amend
S.F. No. 1750 as follows (...):
1.2Delete everything after the enacting clause and insert:
1.3 "Section 1. Minnesota Statutes 2024, section 515B.1-102, is amended to read:
1.4515B.1-102 APPLICABILITY.
1.5(a) Except as provided in this section, this chapter, and not chapters
515 and
515A,
1.6applies to all common interest communities created within this state on and after
June 1,
1.71994.
1.8(b) The applicability of this chapter to common interest communities created prior
to
1.9June 1, 1994, shall be as follows:
1.10(1) This chapter shall apply to condominiums created under chapter
515A with respect
1.11to events and circumstances occurring on and after June 1, 1994; provided (i) that
this
1.12chapter shall not invalidate the declarations, bylaws or condominium plats of those
1.13condominiums, and (ii) that chapter
515A, and not this chapter, shall govern all rights and
1.14obligations of a declarant of a condominium created under chapter
515A, and the rights and
1.15claims of unit owners against that declarant.
1.16(2) The following sections in this chapter apply to condominiums created under chapter
1.17515:
515B.1-104 (Variation by Agreement);
515B.1-105 (Separate Titles and Taxation);
1.18515B.1-106 (Applicability of Local Requirements);
515B.1-107 (Eminent Domain);
1.19515B.1-108 (This Chapter Prevails; Supplemental Law);
515B.1-109 (Construction Against
1.20Implicit Repeal);
515B.1-112 (Unconscionable Agreement or Term of Contract);
515B.1-113
1.21(Obligation of Good Faith);
515B.1-114 (Remedies to be Liberally Administered);
1.22515B.1-115 (Notice);
515B.1-116 (Recording);
515B.2-103 (Construction and Validity of
1.23Declaration and Bylaws);
515B.2-104 (Description of Units);
515B.2-108(d) (Allocation
1.24of Interests);
515B.2-109(f) (Common Elements and Limited Common Elements);
1.25515B.2-112 (Subdivision, Combination, or Conversion of Units);
515B.2-113 (Alteration
1.26of Units);
515B.2-114 (Relocation of Boundaries Between Adjoining Units);
515B.2-115
1.27(Minor Variations in Boundaries);
515B.2-118 (Amendment of Declaration);
515B.2-119
1.28(Termination of Common Interest Community);
515B.3-102 (Powers of Unit Owners'
1.29Association);
515B.3-103(a), (b), and (g) (Board of Directors, Officers, and Declarant
1.30Control);
515B.3-107 (Upkeep of Common Interest Community);
515B.3-108 (Meetings);
1.31515B.3-109 (Quorums);
515B.3-110 (Voting; Proxies);
515B.3-111 (Tort and Contract
1.32Liability);
515B.3-112 (Conveyance of, or Creation of Security Interests in, Common
1.33Elements);
515B.3-113 (Insurance);
515B.3-114 (Replacement Reserves);
515B.3-115(c),
2.1(e), (f), (g), (h), and (i) (Assessments for Common Expenses);
515B.3-116 (Lien for
2.2Assessments);
515B.3-117 (Other Liens);
515B.3-118 (Association Records);
515B.3-119
2.3(Association as Trustee);
515B.3-121 (Accounting Controls);
515B.4-107 (Resale of Units);
2.4515B.4-108 (Purchaser's Right to Cancel Resale); and
515B.4-116 (Rights of Action;
2.5Attorney's Fees). Section
515B.1-103 (Definitions) shall apply to the extent necessary in
2.6construing any of the sections referenced in this section. Sections
515B.1-105,
515B.1-106,
2.7515B.1-107,
515B.1-116,
515B.2-103,
515B.2-104,
515B.2-118,
515B.3-102,
515B.3-110,
2.8515B.3-111,
515B.3-113,
515B.3-116,
515B.3-117,
515B.3-118,
515B.3-121,
515B.4-107,
2.9515B.4-108, and
515B.4-116 apply only with respect to events and circumstances occurring
2.10on and after June 1, 1994. All other sections referenced in this section apply only
with
2.11respect to events and circumstances occurring after July 31, 1999. A section referenced
in
2.12this section does not invalidate the declarations, bylaws or condominium plats of
2.13condominiums created before August 1, 1999. But all sections referenced in this section
2.14prevail over the declarations, bylaws, CIC plats, rules and regulations under them,
of
2.15condominiums created before August 1, 1999, except to the extent that this chapter
defers
2.16to the declarations, bylaws, CIC plats, or rules and regulations issued under them.
2.17(3) This chapter shall not apply to cooperatives
and created or converted prior to June
2.181, 1994, to planned communities created prior to June 1, 1994, or to planned communities
2.19that were created on or after June 1, 1994, and before August 1, 2006, and that consist
of
2.20more than two but fewer than 13 units; except by election pursuant to subsection (d),
and
2.21except that
the following sections apply to all planned communities, including townhome
2.22associations, regardless of when created, unless they are exempt under subsection
(e):
2.23sections
515B.1-116, subsections (a), (c), (d), and (e)
,; 515B.3-102, subsections (a),
2.24paragraphs (1), (3), (10), (11), and (12), (c), and (g); 515B.3-103, subsections (a),
(e),
2.25paragraph (4), (g), (h), and (i); 515B.3-107, subsections (a), (d), (e), (f), and
(g); 515B.3-115,
2.26subsections (e), paragraphs (4) and (5), (g), and (k); 515B.3-1151, subsections (e),
paragraphs
2.27(4) and (5), (g), and (k); 515B.3-116, subsections (a) and (h); 515B.3-122;
515B.4-107,;
2.28and
515B.4-108, apply to all planned communities and cooperatives regardless of when
2.29they are created, unless they are exempt under subsection (e).
2.30(c) This chapter shall not invalidate any amendment to the declaration, bylaws or
2.31condominium plat of any condominium created under chapter
515 or
515A if the amendment
2.32was recorded before June 1, 1994. Any amendment recorded on or after June 1, 1994,
shall
2.33be adopted in conformity with the procedures and requirements specified by those instruments
2.34and by this chapter. If the amendment grants to any person any rights, powers or privileges
3.1permitted by this chapter, all correlative obligations, liabilities and restrictions
contained
3.2in this chapter shall also apply to that person.
3.3(d) Any condominium created under chapter
515, any planned community or cooperative
3.4which would be exempt from this chapter under subsection (e), or any planned community
3.5or cooperative created prior to June 1, 1994, or any planned community that was created
3.6on or after June 1, 1994, and prior to August 1, 2006, and that consists of more than
two
3.7but fewer than 13 units, may elect to be subject to this chapter, as follows:
3.8(1) The election shall be accomplished by recording a declaration or amended declaration,
3.9and a new or amended CIC plat where required, and by approving bylaws or amended
3.10bylaws, which conform to the requirements of this chapter, and which, in the case
of
3.11amendments, are adopted in conformity with the procedures and requirements specified
by
3.12the existing declaration and bylaws of the common interest community, and by any applicable
3.13statutes.
3.14(2) In a condominium, the preexisting condominium plat shall be the CIC plat and an
3.15amended CIC plat shall be required only if the amended declaration or bylaws contain
3.16provisions inconsistent with the preexisting condominium plat. The condominium's CIC
3.17number shall be the apartment ownership number or condominium number originally
3.18assigned to it by the recording officer. In a cooperative in which the unit owners'
interests
3.19are characterized as real estate, a CIC plat shall be required. In a planned community,
the
3.20preexisting plat or registered land survey recorded pursuant to chapter
505,
508, or
508A,
3.21or the part of the plat or registered land survey upon which the common interest community
3.22is located, shall be the CIC plat.
3.23(3) The amendment shall comply with section
515B.2-118(a)(3) and (c); except that the
3.24unanimous consent of the unit owners shall not be required for (i) a clarification
of the unit
3.25boundary description if the clarified boundary description is substantially consistent
with
3.26the preexisting CIC plat, or (ii) changes from common elements to limited common elements
3.27that occur by operation of section
515B.2-109(c) and (d).
3.28(4) Except as permitted by paragraph (3), no declarant, affiliate of declarant, association,
3.29master association nor unit owner may acquire, increase, waive, reduce or revoke any
3.30previously existing warranty rights or causes of action that one of said persons has
against
3.31any other of said persons by reason of exercising the right of election under this
subsection.
3.32(5) A common interest community which elects to be subject to this chapter may, as
a
3.33part of the election process, change its form of ownership by complying with section
3.34515B.2-123.
4.1(e) Except as otherwise provided in this subsection, this chapter shall not apply,
except
4.2by election pursuant to subsection (d), to the following:
4.3(1) a planned community which consists of two units, which utilizes a CIC plat complying
4.4with section
515B.2-110(d)(1) and (2), or section
515B.2-1101(d)(1) and (2), which is not
4.5subject to any rights to subdivide or convert units or to add additional real estate,
and which
4.6is not subject to a master association;
4.7(2) a common interest community that consists solely of platted lots or other separate
4.8parcels of real estate designed or utilized for detached single family dwellings or
agricultural
4.9purposes, with or without common property, where no association or master association
4.10has an obligation to maintain any building containing a dwelling or any agricultural
building
4.11located or to be located on such platted lots or parcels; except that section
515B.4-101(e)
4.12shall apply to the sale of such platted lots or parcels of real estate if the common
interest
4.13community is or will be subject to a master declaration;
4.14(3) a cooperative where, at the time of creation of the cooperative, the unit owners'
4.15interests in the dwellings as described in the declaration consist solely of proprietary
leases
4.16having an unexpired term of fewer than 20 years, including renewal options;
4.17(4) planned communities utilizing a CIC plat complying with section
515B.2-110(d)(1)
4.18and (2), or section
515B.2-1101(d)(1) and (2), and cooperatives, which are limited by the
4.19declaration to nonresidential uses; or
4.20(5) real estate subject only to an instrument or instruments filed primarily for the
purpose
4.21of creating or modifying rights with respect to access, utilities, parking, ditches,
drainage,
4.22or irrigation.
4.23(f) Section
515B.4-101(e) applies to any platted lot or other parcel of real estate that is
4.24subject to a master declaration and is not subject to or is exempt from this chapter.
4.25(g) Section
515B.1-106 and section
515B.2-118, subsections (a)(5), (a)(7), and (d), shall
4.26apply to all common interest communities.
4.27(h) Sections
515B.1-103(33a),
515B.2-110,
515B.3-105,
515B.3-115,
515B.4-102, and
4.28515B.4-115 apply only to common interest communities created before August 1, 2010.
4.29Sections
515B.1-103(33b),
515B.2-1101,
515B.3-1051,
515B.3-1151,
515B.4-1021, and
4.30515B.4-1151 apply only to common interest communities created on or after August 1,
4.312010.
4.32(i) Section
515B.3-114 applies to common interest communities only for the association's
4.33fiscal years commencing before January 1, 2012. Section
515B.3-1141 applies to common
5.1interest communities only for the association's fiscal years commencing on or after
January
5.21, 2012.
5.3(j) Section
515B.3-104 applies only to transfers of special declarant rights that are
5.4effective before August 1, 2010. Section
515B.3-1041, subsections (a) through (i), apply
5.5only to transfers of special declarant rights that are effective on or after August
1, 2010.
5.6Section
515B.3-1041, subsections (j) and (k), apply only to special declarant rights reserved
5.7in a declaration that is first recorded on or after August 1, 2010.
5.8EFFECTIVE DATE.This section is effective January 1, 2026.
5.9 Sec. 2. Minnesota Statutes 2024, section 515B.1-103, is amended to read:
5.10515B.1-103 DEFINITIONS.
5.11In the declaration and bylaws, unless specifically provided otherwise or the context
5.12otherwise requires, and in this chapter:
5.13(1) "Additional real estate" means real estate that may be added to a flexible common
5.14interest community.
5.15(2) "Affiliate of a declarant" means any person who controls, is controlled by, or
is under
5.16common control with a declarant.
5.17(A) A person "controls" a declarant if the person (i) is a general partner, officer,
director,
5.18or employer of the declarant, (ii) directly or indirectly or acting in concert with
one or more
5.19other persons, or through one or more subsidiaries, owns, controls, holds with power
to
5.20vote, or holds proxies representing, more than 20 percent of the voting interest in
the
5.21declarant, (iii) controls in any manner the election of a majority of the directors
of the
5.22declarant, or (iv) has contributed more than 20 percent of the capital of the declarant.
5.23(B) A person "is controlled by" a declarant if the declarant (i) is a general partner,
officer,
5.24director, or employer of the person, (ii) directly or indirectly or acting in concert
with one
5.25or more other persons, or through one or more subsidiaries, owns, controls, holds
with
5.26power to vote, or holds proxies representing, more than 20 percent of the voting interest
in
5.27the person, (iii) controls in any manner the election of a majority of the directors
of the
5.28person, or (iv) has contributed more than 20 percent of the capital of the person.
5.29(C) Control does not exist if the powers described in this subsection are held solely
as
5.30a security interest and have not been exercised.
5.31(3) "Allocated interests" means the following interests allocated to each unit: (i)
in a
5.32condominium, the undivided interest in the common elements, the common expense liability,
6.1and votes in the association; (ii) in a cooperative, the common expense liability
and the
6.2ownership interest and votes in the association; and (iii) in a planned community,
the common
6.3expense liability and votes in the association.
6.4(4) "Association" means the unit owners' association organized under section
515B.3-101.
6.5(5) "Board" means the body, regardless of name, designated in the articles of
6.6incorporation, bylaws or declaration to act on behalf of the association, or on behalf
of a
6.7master association when so identified.
6.8(6) "CIC plat" means a common interest community plat described in section
515B.2-110.
6.9(7) "Common elements" means all portions of the common interest community other
6.10than the units.
6.11(8) "Common expenses" means expenditures made or liabilities incurred by or on behalf
6.12of the association, or master association when so identified, together with any allocations
6.13to reserves.
6.14(9) "Common expense liability" means the liability for common expenses allocated to
6.15each unit pursuant to section
515B.2-108.
6.16(10) "Common interest community" or "CIC" means contiguous or noncontiguous real
6.17estate within Minnesota that is subject to an instrument which obligates persons owning
a
6.18separately described parcel of the real estate, or occupying a part of the real estate
pursuant
6.19to a proprietary lease, by reason of their ownership or occupancy, to pay for (i)
real estate
6.20taxes levied against; (ii) insurance premiums payable with respect to; (iii) maintenance
of;
6.21or (iv) construction, maintenance, repair or replacement of improvements located on,
one
6.22or more parcels or parts of the real estate other than the parcel or part that the
person owns
6.23or occupies. Real estate which satisfies the definition of a common interest community
is
6.24a common interest community whether or not it is subject to this chapter. Real estate
subject
6.25to a master declaration, regardless of when the master declaration was recorded, shall
not
6.26collectively constitute a separate common interest community unless so stated in the
master
6.27declaration.
6.28(11) "Condominium" means a common interest community in which (i) portions of the
6.29real estate are designated as units, (ii) the remainder of the real estate is designated
for
6.30common ownership solely by the owners of the units, and (iii) undivided interests
in the
6.31common elements are vested in the unit owners.
6.32(11a) "Construction defect claim" means a civil action or an arbitration proceeding
based
6.33on any legal theory including, but not limited to, claims under chapter
327A for damages,
7.1indemnity, or contribution brought against a development party to assert a claim,
7.2counterclaim, cross-claim, or third-party claim for damages or loss to, or the loss
of use of,
7.3real or personal property caused by a defect in the initial design or construction
of an
7.4improvement to real property that is part of a common interest community, including
an
7.5improvement that is constructed on additional real estate pursuant to section
515B.2-111.
7.6"Construction defect claim" does not include claims related to subsequent maintenance,
7.7repairs, alterations, or modifications to, or the addition of, improvements that are
part of
7.8the common interest community, and that are contracted for by the association or a
unit
7.9owner.
7.10(12) "Conversion property" means real estate on which is located a building that at
any
7.11time within two years before creation of the common interest community was occupied,
in
7.12whole or in part, for (i) residential use or (ii) for residential rental purposes
by persons other
7.13than purchasers and persons who occupy with the consent of purchasers.
7.14(13) "Cooperative" means a common interest community in which the real estate is
7.15owned by an association, each of whose members is entitled to a proprietary lease
by virtue
7.16of the member's ownership interest in the association.
7.17(14) "Dealer" means a person in the business of selling units for the person's own
account.
7.18(15) "Declarant" means:
7.19(i) if the common interest community has been created, (A) any person who has executed
7.20a declaration, or a supplemental declaration or amendment to a declaration adding
additional
7.21real estate, except secured parties, a spouse holding only an inchoate interest, persons
whose
7.22interests in the real estate will not be transferred to unit owners, or, in the case
of a leasehold
7.23common interest community, a lessor who possesses no special declarant rights and
who
7.24is not an affiliate of a declarant who possesses special declarant rights, or (B)
any person
7.25who reserves, or succeeds under section
515B.3-104 to any special declarant rights;
7.26(ii) any person or persons acting in concert who have offered prior to creation of
the
7.27common interest community to transfer their interest in a unit to be created and not
previously
7.28transferred; or
7.29(iii) if (A) a unit has been restricted to nonresidential use and sold to a purchaser
who
7.30has agreed to modify or waive, in whole or in part, sections
515B.4-101 to
515B.4-118, and
7.31(B) the restriction expires or is modified or terminated such that residential use
of the unit
7.32is permitted, the unit owner at the time the restriction expires or is so modified
or terminated
7.33is a declarant with respect to that unit and any improvements subject to use rights
by a
7.34purchaser of the unit.
8.1(16) "Declaration" means any instrument, however denominated, that creates a common
8.2interest community.
8.3(16a) "Development party" means an architect, contractor, construction manager,
8.4subcontractor, developer, declarant, engineer, or private inspector performing or
furnishing
8.5the design, supervision, inspection, construction, coordination, or observation of
the
8.6construction of any improvement to real property that is part of a common interest
8.7community, or any of the person's affiliates, officers, directors, shareholders, members,
or
8.8employees.
8.9(17) "Dispose" or "disposition" means a voluntary transfer to a purchaser of any legal
8.10or equitable interest in the common interest community, but the term does not include
the
8.11transfer or release of a security interest.
8.12(17a) "First mortgage" means either (i) if there is only one mortgage encumbering
title
8.13to a unit, that mortgage, or (ii) if there are multiple mortgages encumbering title
to a unit,
8.14the mortgage that is first in priority, whether by operation of applicable law or
by a properly
8.15recorded agreement.
8.16(17b) "First mortgagee" means the holder of a first mortgage.
8.17(18) "Flexible common interest community" means a common interest community to
8.18which additional real estate may be added.
8.19(19) "Leasehold common interest community" means a common interest community in
8.20which all or a portion of the real estate is subject to a lease the expiration or
termination of
8.21which will terminate the common interest community or reduce its size.
8.22(20) "Limited common element" means a portion of the common elements allocated by
8.23the declaration or by operation of section
515B.2-109(c) or (d) for the exclusive use of one
8.24or more but fewer than all of the units.
8.25(21) "Master association" means an entity created on or after June 1, 1994, that directly
8.26or indirectly exercises any of the powers set forth in section
515B.3-102 on behalf of one
8.27or more members described in section
515B.2-121(b), (i), (ii) or (iii), whether or not it also
8.28exercises those powers on behalf of one or more property owners' associations described
8.29in section
515B.2-121(b)(iv). A person (i) hired by an association to perform maintenance,
8.30repair, accounting, bookkeeping or management services, or (ii) granted authority
under an
8.31instrument recorded primarily for the purpose of creating rights or obligations with
respect
8.32to utilities, access, drainage, or recreational amenities, is not, solely by reason
of that
8.33relationship, a master association.
9.1(22) "Master declaration" means a written instrument, however named, (i) recorded
on
9.2or after June 1, 1994, and (ii) complying with section
515B.2-121, subsection (e).
9.3(23) "Master developer" means a person who is designated in the master declaration
as
9.4a master developer or, in the absence of such a designation, the owner or owners of
the real
9.5estate subject to the master declaration at the time the master declaration is recorded,
except
9.6(i) secured parties and (ii) a spouse holding only an inchoate interest. A master
developer
9.7is not a declarant unless the master declaration states that the real estate subject
to the master
9.8declaration collectively is or collectively will be a separate common interest community.
9.9(24) "Period of declarant control" means the time period provided for in section
9.10515B.3-103(c) during which the declarant may appoint and remove officers and directors
9.11of the association.
9.12(25) "Person" means an individual, corporation, limited liability company, partnership,
9.13trustee under a trust, personal representative, guardian, conservator, government,
9.14governmental subdivision or agency, or other legal or commercial entity capable of
holding
9.15title to real estate.
9.16(26) "Planned community" means a common interest community that is not a
9.17condominium or a cooperative. A condominium or cooperative may be a part of a planned
9.18community.
9.19(27) "Proprietary lease" means an agreement with a cooperative association whereby
a
9.20member of the association is entitled to exclusive possession of a unit in the cooperative.
9.21(28) "Purchaser" means a person, other than a declarant, who by means of a voluntary
9.22transfer acquires a legal or equitable interest in a unit other than (i) a leasehold
interest of
9.23less than 20 years, including renewal options, or (ii) a security interest.
9.24(29) "Real estate" means any fee simple, leasehold or other estate or interest in,
over,
9.25or under land, including structures, fixtures, and other improvements and interests
that by
9.26custom, usage, or law pass with a conveyance of land though not described in the contract
9.27of sale or instrument of conveyance. "Real estate" may include spaces with or without
upper
9.28or lower boundaries, or spaces without physical boundaries.
9.29(30) "Residential use" means use as a dwelling, whether primary, secondary or seasonal,
9.30but not (i) transient use such as hotels or motels, (ii) use for residential rental
purposes if
9.31the individual dwellings are not separate units or if the individual dwellings are
not located
9.32on separate parcels of real estate. For purposes of this chapter, a unit is restricted
to
10.1nonresidential use if the unit is subject to a restriction that prohibits residential
use as defined
10.2in this section whether or not the restriction also prohibits the uses described in
this paragraph.
10.3(31) "Secured party" means the person owning a security interest as defined in paragraph
10.4(32).
10.5(32) "Security interest" means a perfected interest in real estate or personal property,
10.6created by contract or conveyance, which secures payment or performance of an obligation.
10.7The term includes a mortgagee's interest in a mortgage, a vendor's interest in a contract
for
10.8deed, a lessor's interest in a lease intended as security, a holder's interest in
a sheriff's
10.9certificate of sale during the period of redemption, an assignee's interest in an
assignment
10.10of leases or rents intended as security, in a cooperative, a lender's interest in
a member's
10.11ownership interest in the association, a pledgee's interest in the pledge of an ownership
10.12interest, or any other interest intended as security for an obligation under a written
agreement.
10.13(33a) This definition of special declarant rights applies only to common interest
10.14communities created before August 1, 2010. "Special declarant rights" means rights
reserved
10.15in the declaration for the benefit of a declarant to:
10.16(i) complete improvements indicated on the CIC plat, planned by the declarant consistent
10.17with the disclosure statement or authorized by the municipality in which the CIC is
located;
10.18(ii) add additional real estate to a common interest community;
10.19(iii) subdivide or combine units, or convert units into common elements, limited common
10.20elements, or units;
10.21(iv) maintain sales offices, management offices, signs advertising the common interest
10.22community, and models;
10.23(v) use easements through the common elements for the purpose of making improvements
10.24within the common interest community or any additional real estate;
10.25(vi) create a master association and provide for the exercise of authority by the
master
10.26association over the common interest community or its unit owners;
10.27(vii) merge or consolidate a common interest community with another common interest
10.28community of the same form of ownership; or
10.29(viii) appoint or remove any officer or director of the association, or the master
association
10.30where applicable, during any period of declarant control.
10.31(33b) This definition of special declarant rights applies only to common interest
10.32communities created on or after August 1, 2010. "Special declarant rights" means rights
11.1reserved in the declaration for the benefit of a declarant and expressly identified
in the
11.2declaration as special declarant rights. Such special declarant rights may include
but are not
11.3limited to the following:
11.4(i) to complete improvements indicated on the CIC plat, planned by the declarant
11.5consistent with the disclosure statement or authorized by the municipality in which
the
11.6common interest community is located, and to have and use easements for itself and
its
11.7employees, agents, and contractors through the common elements for such purposes;
11.8(ii) to add additional real estate to a common interest community;
11.9(iii) to subdivide or combine units, or convert units into common elements, limited
11.10common elements and/or units, pursuant to section
515B.2-112;
11.11(iv) to maintain and use sales offices, management offices, signs advertising the
common
11.12interest community, and models, and to have and use easements for itself and its employees,
11.13agents, and invitees through the common elements for such purposes;
11.14(v) to appoint or remove any officer or director of the association during any period
of
11.15declarant control;
11.16(vi) to utilize an alternate common expense plan as provided in section
515B.3-115(a)(2);
11.17(vii) to grant common element licenses as provided in section
515B.2-109(e); or
11.18(viii) to review, and approve or disapprove, the exterior design, materials, size,
site
11.19location, and other exterior features of buildings and other structures, landscaping
and other
11.20exterior improvements, located within the common interest community, and any
11.21modifications or alterations thereto.
11.22Special declarant rights shall not be reserved or utilized for the purpose of evading
any
11.23limitation or obligation imposed on declarants by this chapter.
11.24(34) "Time share" means a right to occupy a unit or any of several units during three
or
11.25more separate time periods over a period of at least three years, including renewal
options,
11.26whether or not coupled with a fee title interest in the common interest community
or a
11.27specified portion thereof.
11.28(35) "Unit" means a portion of a common interest community the boundaries of which
11.29are described in the common interest community's declaration and which is intended
for
11.30separate ownership, or separate occupancy pursuant to a proprietary lease.
12.1(36) "Unit identifier" means English letters or Arabic numerals, or a combination
thereof,
12.2which identify only one unit in a common interest community and which meet the
12.3requirements of section
515B.2-104.
12.4(37) "Unit owner" means a declarant or other person who owns a unit, a lessee under
a
12.5proprietary lease, or a lessee of a unit in a leasehold common interest community
whose
12.6lease expires simultaneously with any lease the expiration or termination of which
will
12.7remove the unit from the common interest community, but does not include a secured
party.
12.8In a common interest community, the declarant is the unit owner of a unit until that
unit has
12.9been conveyed to another person.
12.10 Sec. 3. Minnesota Statutes 2024, section 515B.2-103, is amended to read:
12.11515B.2-103 CONSTRUCTION AND VALIDITY OF DECLARATION AND
12.12BYLAWS.
12.13(a) All provisions of the declaration and bylaws are severable.
12.14(b) The rule against perpetuities may not be applied to defeat any provision of the
12.15declaration or this chapter, or any instrument executed pursuant to the declaration
or this
12.16chapter.
12.17(c) In the event of a conflict between the provisions of the declaration and the bylaws,
12.18the declaration prevails except to the extent that the declaration is inconsistent
with this
12.19chapter.
In the event of a conflict between the provisions of the declaration or the bylaws
12.20and this chapter, this chapter prevails.
12.21(d) The declaration and bylaws must comply with sections
500.215,
500.216, and
500.217.
12.22EFFECTIVE DATE.This section is effective January 1, 2026.
12.23 Sec. 4. Minnesota Statutes 2024, section 515B.2-119, is amended to read:
12.24515B.2-119 TERMINATION OF COMMON INTEREST COMMUNITY.
12.25(a) Except as otherwise provided in this chapter, a common interest community may
be
12.26terminated
as follows:
12.27(1) if a common interest community consisting entirely of detached, single-family
12.28dwellings does not include any common elements and the association has no maintenance
12.29obligations for any building that contains a dwelling, the common interest community
may
12.30be terminated only by agreement of unit owners of units to which at least 60 percent
of the
13.1votes in the association are allocated, provided that the association must honor the
terms of
13.2any preexisting contract; or
13.3(2) if the common interest community includes common elements, the common interest
13.4community may be terminated only by agreement of unit owners of units to which at least
13.580 percent of the votes in the association are allocated, and 80 percent of the first
mortgagees
13.6of units (each mortgagee having one vote per unit financed), or any larger percentage
the
13.7declaration specifies. The declaration may specify a smaller percentage
only if all of the
13.8units are detached single-family dwellings or if all of the units are restricted to nonresidential
13.9use.
13.10(b) An agreement to terminate shall be evidenced by a written agreement, executed
in
13.11the same manner as a deed by the number of unit owners and first mortgagees of units
13.12required by subsection (a).
The affirmative consent of a first mortgagee to termination of a
13.13common interest community shall be deemed to be granted if the first mortgagee's written
13.14refusal to consent is not received by the association within 60 days after the first
mortgagee
13.15receives from the association a notice and copy of the proposed termination agreement
by
13.16certified mail, postage prepaid, return receipt requested. If the first mortgagee
has not
13.17otherwise provided to the association an address for notice, the association must
send the
13.18notice to the address, if any, set forth in the recorded instrument that evidences
the security
13.19interest. The agreement shall specify a date after which the agreement shall be void unless
13.20recorded before that date. The agreement shall also specify a date by which the termination
13.21of the common interest community and the winding up of its affairs must be accomplished.
13.22A certificate of termination executed by the association evidencing the termination
shall be
13.23recorded on or before the termination date, or the agreement to terminate shall be
revoked.
13.24The agreement to terminate, or a memorandum thereof, and the certificate of termination
13.25shall be recorded in every county in which a portion of the common interest community
is
13.26situated and is effective only upon recording.
13.27(c) In the case of a condominium or planned community containing only units having
13.28upper and lower boundaries, a termination agreement may provide that all of the common
13.29elements and units of the common interest community must be sold following termination.
13.30If, pursuant to the agreement, any real estate in the common interest community is
to be
13.31sold following termination, the termination agreement shall set forth the minimum
terms
13.32of sale acceptable to the association.
13.33(d) In the case of a condominium or planned community containing any units not having
13.34upper and lower boundaries, a termination agreement may provide for sale of the common
13.35elements, but it may not require that the units be sold following termination, unless
the
14.1original declaration provided otherwise or all unit owners whose units are to be sold
consent
14.2to the sale.
If, pursuant to the agreement, any real estate in the common interest community
14.3is to be sold following termination, the termination agreement shall set forth the
minimum
14.4terms of sale acceptable to the association.
14.5(e) The association, on behalf of the unit owners, shall have authority to contract
for the
14.6sale of real estate in a common interest community pursuant to this section, subject
to the
14.7required approval. The agreement to terminate shall be deemed to grant to the association
14.8a power of attorney coupled with an interest to effect the conveyance of the real
estate on
14.9behalf of the holders of all interests in the units, including without limitation
the power to
14.10execute all instruments of conveyance and related instruments. Until the sale has
been
14.11completed, all instruments in connection with the sale have been executed and the
sale
14.12proceeds distributed, the association shall continue in existence with all powers
it had before
14.13termination.
14.14(1) The instrument conveying or creating the interest in the common interest community
14.15shall include as exhibits (i) an affidavit of the secretary of the association certifying
that the
14.16approval required by this section has been obtained and (ii) a schedule of the names
of all
14.17unit owners in the common interest community as of the date of the approval.
14.18(2) Proceeds of the sale shall be distributed to unit owners and secured parties as
their
14.19interests may appear, in accordance with subsections (h), (i), (j), and (k).
14.20(3) Unless otherwise specified in the agreement of termination, until the association
has
14.21conveyed title to the real estate, each unit owner and the unit owner's successors
in interest
14.22have an exclusive right to occupancy of the portion of the real estate that formerly
constituted
14.23the unit. During the period of that occupancy, each unit owner and the unit owner's
successors
14.24in interest remain liable for all assessments and other obligations imposed on unit
owners
14.25by this chapter, the declaration or the bylaws.
14.26(f) The legal description of the real estate constituting the common interest community
14.27shall, upon the date of recording of the certificate of termination referred to in
subsection
14.28(b), be as follows:
14.29(1) In a planned community utilizing a CIC plat complying with section
515B.2-110(d)(1)
14.30and (2), the lot and block description contained in the CIC plat, and any amendments
thereto,
14.31subject to any subsequent conveyance or taking of a fee interest in any part of the
property.
14.32(2) In a condominium or cooperative, or a planned community utilizing a CIC plat
14.33complying with section
515B.2-110(c), the underlying legal description of the real estate
14.34as set forth in the declaration creating the common interest community, and any amendments
15.1thereto, subject to any subsequent conveyance or taking of a fee interest in any part
of the
15.2property.
15.3(3) The legal description referred to in this subsection shall apply upon the recording
of
15.4the certificate of termination. The recording officer for each county in which the
common
15.5interest community is located shall index the property located in that county in its
records
15.6under the legal description required by this subsection from and after the date of
recording
15.7of the certificate of termination. In the case of registered property, the registrar
of titles shall
15.8cancel the existing certificates of title with respect to the property and issue one
or more
15.9certificates of title for the property utilizing the legal description required by
this subsection.
15.10(g) In a condominium or planned community, if the agreement to terminate provides
15.11that the real estate constituting the common interest community is not to be sold
following
15.12termination, title to the common elements and, in a common interest community containing
15.13only units having upper and lower boundaries described in the declaration, title to
all the
15.14real estate in the common interest community, vests in the unit owners upon termination
as
15.15tenants in common in proportion to their respective interest as provided in subsection
(k),
15.16and liens on the units shift accordingly. While the tenancy in common exists, each
unit
15.17owner and the unit owner's successors in interest have an exclusive right to occupancy
of
15.18the portion of the real estate that formerly constituted the unit.
15.19(h) The proceeds of any sale of real estate pursuant to subsection (e), together with
the
15.20assets of the association, shall be held by the association as trustee for unit owners,
secured
15.21parties and other holders of liens on the units as their interests may appear. Before
distributing
15.22any proceeds, the association shall have authority to deduct from the proceeds of
sale due
15.23with respect to the unit (i) unpaid assessments levied by the association with respect
to the
15.24unit, (ii) unpaid real estate taxes or special assessments due with respect to the
unit, and
15.25(iii) the share of expenses of sale and winding up of the association's affairs with
respect to
15.26the unit.
15.27(i) Following termination of a condominium or planned community, creditors of the
15.28association holding liens on the units perfected before termination may enforce those
liens
15.29in the same manner as any lienholder, in order of priority based upon their times
of perfection.
15.30All other creditors of the association are to be treated as if they had perfected
liens on the
15.31units immediately before termination.
15.32(j) In a cooperative, the declaration may provide that all creditors of the association
have
15.33priority over any interests of unit owners and creditors of unit owners. In that event,
following
15.34termination, creditors of the association holding liens on the cooperative which were
perfected
16.1before termination may enforce their liens in the same manner as any lienholder, in
order
16.2of priority based upon their times of perfection. All other creditors of the association
shall
16.3be treated as if they had perfected a lien against the cooperative immediately before
16.4termination. Unless the declaration provides that all creditors of the association
have that
16.5priority:
16.6(1) the lien of each creditor of the association which was perfected against the association
16.7before termination becomes, upon termination, a lien against each unit owner's interest
in
16.8the unit as of the date the lien was perfected;
16.9(2) any other creditor of the association is to be treated upon termination as if
the creditor
16.10had perfected a lien against each unit owner's interest immediately before termination;
16.11(3) the amount of the lien of an association's creditor described in paragraphs (1)
and
16.12(2) against each of the unit owners' interest shall be proportionate to the ratio
which each
16.13unit's common expense liability bears to the common expense liability of all of the
units;
16.14(4) the lien of each creditor of each unit owner which was perfected before termination
16.15continues as a lien against that unit owner's interest in the unit as of the date
the lien was
16.16perfected; and
16.17(5) the assets of the association shall be distributed to all unit owners and all
lienholders
16.18as their interests may appear in the order described in this section. Creditors of
the association
16.19are not entitled to payment from any unit owner in excess of the amount of the creditor's
16.20lien against that unit owner's interest.
16.21(k) The respective interest of unit owners referred to in subsections (e), (f), (g),
(h) and
16.22(i) are as follows:
16.23(1) Except as provided in paragraph (2), the respective interests of unit owners are
the
16.24fair market values of their units, allocated interests, and any limited common elements
16.25immediately before the termination, as determined by one or more independent appraisers
16.26selected by the association. The decision of the independent appraisers must be distributed
16.27to the unit owners and becomes final unless disapproved within 30 days after distribution
16.28by unit owners of units to which 25 percent of the votes in the association are allocated.
16.29The proportion of any unit's interest to that of all units is determined by dividing
the fair
16.30market value of that unit by the total fair market values of all the units.
16.31(2) If any unit or any limited common element is destroyed to the extent that an appraisal
16.32of the fair market value thereof before destruction cannot be made, the interests
of all unit
16.33owners shall be measured by: (i) in a condominium, their allocations of common element
17.1interests immediately before the termination, (ii) in a cooperative, their respective
ownership
17.2interests immediately before the termination, and (iii) in a planned community, their
17.3respective allocations of common expenses immediately before the termination.
17.4(l) In a condominium or planned community, except as provided in subsection (m),
17.5foreclosure or enforcement of a lien or encumbrance against the entire common interest
17.6community does not terminate, of itself, the common interest community, and foreclosure
17.7or enforcement of a lien or encumbrance against a portion of the common interest community
17.8does not withdraw that portion from the common interest community.
17.9(m) In a condominium or planned community, if a lien or encumbrance against a portion
17.10of the real estate comprising the common interest community has priority over the
declaration
17.11and the lien or encumbrance has not been partially released, the parties foreclosing
the lien
17.12or encumbrance, upon foreclosure, may record an instrument excluding the real estate
subject
17.13to that lien or encumbrance from the common interest community.
17.14(n) Following the termination of a common interest community in accordance with this
17.15section, the association shall be dissolved in accordance with law.
17.16EFFECTIVE DATE.This section is effective January 1, 2026.
17.17 Sec. 5. Minnesota Statutes 2024, section 515B.3-102, is amended to read:
17.18515B.3-102 POWERS AND DUTIES OF UNIT OWNERS' ASSOCIATION.
17.19(a) Except as provided in subsections (b), (c), (d), (e), and (f) and subject to the
provisions
17.20of the declaration or bylaws, the association shall have the power to:
17.21(1) adopt, amend and revoke rules and regulations not inconsistent with the articles
of
17.22incorporation, bylaws and declaration,
and consistent with the requirements of subsection
17.23(g) as follows: (i) regulating the use of the common elements; (ii) regulating the use
of the
17.24units, and conduct of unit occupants, which may jeopardize the health, safety or welfare
of
17.25other occupants, which involves noise or other disturbing activity, or which may damage
17.26the common elements or other units; (iii) regulating or prohibiting animals; (iv)
regulating
17.27changes in the appearance of the common elements and conduct which may damage the
17.28common interest community; (v) regulating the exterior appearance of the common interest
17.29community, including, for example, balconies and patios, window treatments, and signs
17.30and other displays, regardless of whether inside a unit; (vi) implementing the articles
of
17.31incorporation, declaration and bylaws, and exercising the powers granted by this section;
17.32and (vii) otherwise facilitating the operation of the common interest community;
18.1(2) adopt and amend budgets for revenues, expenditures and reserves, and levy and
18.2collect assessments for common expenses from unit owners;
18.3(3) hire and discharge managing agents and other employees, agents, and independent
18.4contractors;
18.5(4) institute, defend, or intervene in litigation or administrative proceedings (i)
in its
18.6own name on behalf of itself or two or more unit owners on matters affecting the common
18.7elements or other matters affecting the common interest community or, (ii) with the
consent
18.8of the owners of the affected units on matters affecting only those units;
18.9(5) make contracts and incur liabilities;
18.10(6) regulate the use, maintenance, repair, replacement, and modification of the common
18.11elements and the units;
18.12(7) cause improvements to be made as a part of the common elements, and, in the case
18.13of a cooperative, the units;
18.14(8) acquire, hold, encumber, and convey in its own name any right, title, or interest
to
18.15real estate or personal property, but (i) common elements in a condominium or planned
18.16community may be conveyed or subjected to a security interest only pursuant to section
18.17515B.3-112, or (ii) part of a cooperative may be conveyed, or all or part of a cooperative
18.18may be subjected to a security interest, only pursuant to section
515B.3-112;
18.19(9) grant or amend easements for public utilities, public rights-of-way or other public
18.20purposes, and cable television or other communications, through, over or under the
common
18.21elements; grant or amend easements, leases, or licenses to unit owners for purposes
authorized
18.22by the declaration; and, subject to approval by a vote of unit owners other than declarant
18.23or its affiliates, grant or amend other easements, leases, and licenses through, over
or under
18.24the common elements;
18.25(10) impose and receive any payments, fees, or charges for the use, rental, or operation
18.26of the common elements, other than limited common elements, and for services provided
18.27to unit owners
. The association must compile and provide to every unit owner a schedule
18.28of the fees and charges that may be imposed;
18.29(11) impose
interest and (i) a late
charges fee for late payment of assessments
, provided
18.30that an association may not impose a late fee, including a late fee for a special
assessment,
18.31in excess of $15 or five percent of the amount owed, whichever is greater; and
, after notice
18.32and an opportunity to be heard before the board or a committee appointed by it, levy
18.33reasonable (ii) fines for violations of the declaration, bylaws, and rules and regulations of
19.1the association
after notice and an opportunity to be heard before the board or a committee
19.2appointed by the board and consistent with the requirements of section (c), provided that
19.3attorney fees and costs must not be charged or collected from a unit owner who
disputes
19.4asks a question about a fine or assessment
and, if after the homeowner or disputes a fine or
19.5assessment and the association removes the fine or assessment without a hearing or
the unit
19.6owner requests a hearing and a hearing is held by the board or a committee of the board,
19.7and the board does not adopt a resolution levying the fine or upholding the assessment
19.8against the unit owner or owner's unit;
19.9(12) impose reasonable charges for the review, preparation and recordation of
19.10amendments to the declaration
, or resale certificates required by section
515B.4-107,
19.11statements of unpaid assessments, or furnishing copies of association records provided that
19.12the association may not impose any charges, including attorney fees, to respond to
a question
19.13about any governing document or any aspect of the operation or management of the common
19.14interest community posed by a unit owner to the association;
19.15(13) provide for the indemnification of its officers and directors, and maintain directors'
19.16and officers' liability insurance;
19.17(14) provide for reasonable procedures governing the conduct of meetings and election
19.18of directors;
19.19(15) exercise any other powers conferred by law, or by the declaration, articles of
19.20incorporation or bylaws; and
19.21(16) exercise any other powers necessary and proper for the governance and operation
19.22of the association
consistent with this chapter and the governing documents of the association.
19.23(b) Notwithstanding subsection (a) the declaration or bylaws may not impose limitations
19.24on the power of the association to deal with the declarant which are more restrictive
than
19.25the limitations imposed on the power of the association to deal with other persons.
19.26(c)
An association must adopt and provide to every unit owner a policy regarding fines
19.27that includes a list of the violations for which a fine may be imposed and a schedule
of fines
19.28for those violations. When a violation can be cured without causing damage to property
or
19.29to another, the association must provide the unit owner with a reasonable time to
correct
19.30the violation before a fine may be imposed. A fine levied pursuant to subsection (a)(11)
19.31must be commensurate with the violation and must not exceed $100 for a single violation,
19.32except the association may impose a fine greater than $100 for a subsequent violation
for
19.33the same conduct if the owner was notified that a subsequent violation may result
in greater
19.34fines and the violation:
20.1(1) has a serious and immediate impact on a resident's health or safety;
20.2(2) causes physical damage to another unit or a common element; or
20.3(3) involves using the property for financial enrichment, including renting or offering
20.4for rent a unit in violation of a rule prohibiting short-term or long-term rentals.
20.5An association that levies a fine pursuant to subsection (a)(11), or an assessment
pursuant
20.6to section
515B.3-115(g), or
515B.3-1151(g), must provide a dated, written notice to a unit
20.7owner that:
20.8(1) states the amount and reason for the fine or assessment;
20.9(2) for fines levied under section
515B.3-102(a)(11), specifies: (i) the violation for which
20.10a fine is being levied and the date of the levy; and (ii) the specific section of
the declaration,
20.11bylaws, rules, or regulations allegedly violated;
20.12(3) for assessments levied under section
515B.3-115(g) or
515B.3-1151(g), identifies:
20.13(i) the damage caused; and (ii) the act or omission alleged to have caused the damage;
20.14(4) states that
all unpaid fines
for certain violations subject to section 515B.3-116,
20.15subsection (h), and
all assessments are liens which, if not satisfied, could lead to foreclosure
20.16of the lien against the owner's unit;
20.17(5) describes the unit owner's right to be heard by the board or a committee appointed
20.18by the board
and the procedures for disputing the fine;
20.19(6) states that if the assessment, fine, late fees, and other allowable charges are
not paid,
20.20the amount may increase as a result of the imposition of attorney fees and other collection
20.21costs; and
20.22(7) informs the unit owner that homeownership assistance is available from the Minnesota
20.23Homeownership Center.
20.24(d) Notwithstanding subsection (a), powers exercised under this section must comply
20.25with sections
500.215,
500.216, and
500.217.
20.26(e) Notwithstanding subsection (a)(4) or any other provision of this chapter, the
20.27association, before instituting litigation or arbitration involving construction defect
claims
20.28against a development party, shall:
20.29(1) mail or deliver written notice of the anticipated commencement of the action to
each
20.30unit owner at the addresses, if any, established for notices to owners in the declaration
and,
20.31if the declaration does not state how notices are to be given to owners, to the owner's
last
20.32known address. The notice shall specify the nature of the construction defect claims
to be
21.1alleged, the relief sought, and the manner in which the association proposes to fund
the cost
21.2of pursuing the construction defect claims; and
21.3(2) obtain the approval of owners of units to which a majority of the total votes
in the
21.4association are allocated. Votes allocated to units owned by the declarant, an affiliate
of the
21.5declarant, or a mortgagee who obtained ownership of the unit through a foreclosure
sale
21.6are excluded. The association may obtain the required approval by a vote at an annual
or
21.7special meeting of the members or, if authorized by the statute under which the association
21.8is created and taken in compliance with that statute, by a vote of the members taken
by
21.9electronic means or mailed ballots. If the association holds a meeting and voting
by electronic
21.10means or mailed ballots is authorized by that statute, the association shall also
provide for
21.11voting by those methods. Section
515B.3-110(c) applies to votes taken by electronic means
21.12or mailed ballots, except that the votes must be used in combination with the vote
taken at
21.13a meeting and are not in lieu of holding a meeting, if a meeting is held, and are
considered
21.14for purposes of determining whether a quorum was present. Proxies may not be used
for a
21.15vote taken under this paragraph unless the unit owner executes the proxy after receipt
of
21.16the notice required under subsection (e)(1) and the proxy expressly references this
notice.
21.17(f) The association may intervene in a litigation or arbitration involving a construction
21.18defect claim or assert a construction defect claim as a counterclaim, crossclaim,
or third-party
21.19claim before complying with subsections (e)(1) and (e)(2) but the association's complaint
21.20in an intervention, counterclaim, crossclaim, or third-party claim shall be dismissed
without
21.21prejudice unless the association has complied with the requirements of subsection
(e) within
21.2290 days of the association's commencement of the complaint in an intervention or the
21.23assertion of the counterclaim, crossclaim, or third-party claim.
21.24(g) Rules and regulations adopted must be reasonable. An association must give unit
21.25owners 60 days' advance notice of a board's proposed adoption, amendment, or revocation
21.26of a rule. A rule change must be approved at a board meeting, and an association must
give
21.27unit owners the opportunity to comment on the proposed rule change at the meeting
at which
21.28the change is considered. Upon receipt of a petition to revoke a rule signed by at
least 20
21.29percent of the total votes in the association that are allocated, the board must notify
the unit
21.30owners of the meeting at which revocation of the rule will be considered. The rule
may be
21.31revoked if approved by the majority vote of the total votes in the association that
are
21.32allocated. If the rule proposed to be revoked is required by the declaration of bylaws,
the
21.33declaration or bylaws may be amended to avoid conflict according to the procedures
required
21.34under section 515B.2-118 or 515B.3-106, respectively.
22.1(h) Each association must adopt a dispute resolution process as provided under section
22.2515B.3-122.
22.3(i) Associations must not sell or assign any personal debt for fines or fees owed
by a
22.4unit owner to the association.
22.5(j) A payment made by a unit owner must be applied to regular assessments first before
22.6any other fines, fees, or assessments owed by the unit owner.
22.7EFFECTIVE DATE.This section is effective January 1, 2026.
22.8 Sec. 6. Minnesota Statutes 2024, section 515B.3-103, is amended to read:
22.9515B.3-103 BOARD OF DIRECTORS, OFFICERS AND DECLARANT
22.10CONTROL.
22.11(a) An association shall be governed by a board of directors whose appointment or
22.12election shall occur no later than the date of creation of the common interest community
22.13and shall be reflected in the association's records. Except as expressly prohibited
by the
22.14declaration, the articles of incorporation, bylaws, subsection (b), or other provisions
of this
22.15chapter, the board may act in all instances on behalf of the association. In the performance
22.16of their duties, the officers and directors are required to exercise (i) if appointed
by the
22.17declarant, the care required of fiduciaries of the unit owners and (ii) if elected
by the unit
22.18owners, the care required of a director by section
302A.251,
308B.455,
308C.455, or
22.19317A.251, as applicable. The officers and directors appointed by the declarant shall have
22.20a duty to fulfill, and to cause the association to fulfill, their respective obligations
under the
22.21declaration, bylaws, articles of incorporation, and this chapter and to enforce the
provisions
22.22of the declaration, bylaws, articles of incorporation, and this chapter against all
unit owners,
22.23including the declarant and its affiliates, in a uniform and fair manner. The standards
of
22.24conduct for officers and directors set forth in this subsection shall also apply to
the officers
22.25and directors of master associations in the exercise of their duties on behalf of
the master
22.26association.
22.27(b) The board may not act unilaterally to amend the declaration, to terminate the
common
22.28interest community, to elect directors to the board, or to determine the qualifications,
powers
22.29and duties, or terms of office of directors, but the board may fill vacancies in its
membership
22.30created other than by removal by the vote of the association members for the unexpired
22.31portion of any term.
22.32(c) The declaration may provide for a period of declarant control of the association,
22.33during which a declarant, or persons designated by the declarant, may appoint and
remove
23.1the officers and directors of the association. The period of declarant control begins
on the
23.2date of creation of the common interest community and terminates upon the earliest
of the
23.3following events: (i) five years after the date of the first conveyance of a unit
to a unit owner
23.4other than a declarant in the case of a flexible common interest community or three
years
23.5in the case of any other common interest community, (ii) the declarant's voluntary
surrender
23.6of control by giving written notice to the unit owners pursuant to section
515B.1-115, or
23.7(iii) the conveyance of 75 percent of the units to unit owners other than a declarant.
23.8(d) The board shall cause a meeting of the unit owners to be called, as follows:
23.9(1) If the period of declarant control has terminated pursuant to subsection (c),
a meeting
23.10of the unit owners shall be called and held within 60 days after said termination,
at which
23.11the board shall be appointed or elected by all unit owners, including declarant, subject
to
23.12the requirements of subsection (e).
23.13(2) If 50 percent of the units that a declarant is authorized by the declaration to
create
23.14have been conveyed prior to the termination of the declarant control period, a meeting
of
23.15the unit owners shall be called and held within 60 days thereafter, at which not less
than
23.1633-1/3 percent of the members of the board shall be elected by unit owners other than
a
23.17declarant or an affiliate of a declarant.
23.18(3) If the board fails or refuses to cause a meeting of the unit owners required to
be called
23.19pursuant to subsection (d), then the unit owners other than a declarant and its affiliates
may
23.20cause the meeting to be called pursuant to the applicable provisions of the law under
which
23.21the association was created. The declarant and its affiliates shall be deemed to be
present
23.22at the meeting for purposes of establishing a quorum regardless of their failure to
attend the
23.23meeting.
23.24(e) Following the termination of any period of declarant control, the unit owners
shall
23.25appoint or elect the board. All unit owners, including the declarant and its affiliates,
may
23.26cast the votes allocated to any units owned by them. The board shall thereafter be
subject
23.27to the following:
23.28(1) Unless otherwise approved by a vote of unit owners other than the declarant or
an
23.29affiliate of the declarant, a majority of the directors shall be unit owners or a
natural person
23.30designated by a unit owner that is not a natural person, other than a declarant or
an affiliate
23.31of a declarant. The remaining directors need not be unit owners unless required by
the
23.32articles of incorporation or bylaws.
23.33(2) Subject to the requirements of subsection (e)(1), the articles of incorporation
or
23.34bylaws may authorize the declarant or a person designated by the declarant to appoint
one
24.1director, who need not be a member. The articles of incorporation or bylaws shall
not be
24.2amended to change or terminate the authorization to appoint one director without the
written
24.3consent of the declarant or other person possessing the power to appoint.
24.4(3) Subject to the requirements of subsection (e)(1), the articles of incorporation
or
24.5bylaws may authorize special classes of directors and director voting rights, as follows:
(i)
24.6classes of directors, (ii) the appointment or election of directors in certain classes
by certain
24.7classes of members, or (iii) class voting by classes of directors on issues affecting
only a
24.8certain class or classes of members, units, or other parcels of real estate, or to
otherwise
24.9protect the legitimate interest of such class or classes. No person may utilize such
special
24.10classes or class voting for the purpose of evading any limitation imposed on declarants
by
24.11this chapter.
Elections for directors must occur regularly and in accordance with the governing
24.12documents of the association, and each term of a director must not exceed three years.
24.13(4) The board shall elect the officers. The directors and officers shall take office
upon
24.14election.
24.15(f) In determining whether the period of declarant control has terminated under subsection
24.16(c), or whether unit owners other than a declarant are entitled to elect members of
the board
24.17of directors under subsection (d), the percentage of the units conveyed shall be calculated
24.18using as a numerator the number of units conveyed and as a denominator the number
of
24.19units subject to the declaration plus the number of units which the declarant is authorized
24.20by the declaration to create on any additional real estate. The percentages referred
to in
24.21subsections (c) and (d) shall be calculated without reference to units that are auxiliary
to
24.22other units, such as garage units or storage units. A person shall not use a master
association
24.23or other device to evade the requirements of this section.
24.24(g) Except as otherwise provided in this subsection,
all meetings of the board of directors
24.25must be open to the unit owners.
To the extent practicable, The board shall give reasonable
24.26notice to the unit owners of the date, time,
and place
, and agenda of a board meeting. If the
24.27date, time, and place of meetings are provided for in the declaration, articles, or
bylaws,
24.28announced at a previous meeting of the board, posted in a location accessible to the
unit
24.29owners and designated by the board from time to time, or if an emergency requires
immediate
24.30consideration of a matter by the board, notice is not required. "Notice" has the meaning
24.31given in section
317A.011, subdivision 14.
Prior to the board taking action on an agenda
24.32item that requires the vote of the board, and at a time during the meeting designated
by the
24.33board, any unit owner or any person designated in writing by a member as the member's
24.34representative must be permitted to attend and speak on the item. A time must be designated
24.35by the board at each open meeting for any unit owner, or the unit owner's designee,
to raise
25.1any issue that is a nonvoting item on the meeting agenda or any other issue that is
related
25.2to the association or the common interest community. The board may place a reasonable
25.3limit on the time a member is allowed to speak. Meetings may be closed to discuss the
25.4following:
25.5(1) personnel matters;
25.6(2) pending or potential litigation, arbitration or other potentially adversarial
proceedings,
25.7between unit owners, between the board or association and unit owners, or other matters
in
25.8which any unit owner may have an adversarial interest, if the board determines that
closing
25.9the meeting is necessary to discuss strategy or to otherwise protect the position
of the board
25.10or association or the privacy of a unit owner or occupant of a unit; or
25.11(3) criminal activity arising within the common interest community if the board
25.12determines that closing the meeting is necessary to protect the privacy of the victim
or that
25.13opening the meeting would jeopardize investigation of the activity.
25.14Nothing in this subsection imposes a duty on the board to provide special facilities
for
25.15meetings. The failure to give notice as required by this subsection shall not invalidate
the
25.16board meeting or any action taken at the meeting. The minutes of any part of a meeting
that
25.17is closed under this subsection may be kept confidential at the discretion of the
board.
A
25.18board of directors of an association that has fewer than 25 units and does not contract
with
25.19a property management company is not required to comply with this subsection's
25.20requirements for the notice for meetings between board members, nor the requirements
to
25.21keep minutes, if the subject of the meeting is solely to discuss issues related to
property
25.22management, including preliminary budget discussions provided no budget decisions
are
25.23finalized.
25.24(h) The conflict of interest standards set forth in section 317A.255 are required
of officers
25.25and directors and apply to an actual or potential conflict of interest that arises
concerning
25.26an officer or director, regardless of whether appointed or elected, and in addition
to those
25.27requirements:
25.28(1) a board member must not participate in deliberations or vote on the approval of
a
25.29contract where the board member or a member of the family of a board member, has a
25.30material financial interest which is likely to result in financial gains. For the
purposes of
25.31this section, "member of the family" has the meaning given in section 317A.255, subdivision
25.324;
25.33(2) a board member or management company, must not solicit or accept any money or
25.34other compensation from any person as an inducement for the board member, or the
26.1management company, to contract with the person for property maintenance, construction,
26.2repair, or reconstruction services. A gift of nominal value is not a violation of
this section;
26.3or
26.4(3) prior to entering into any contract for property maintenance, construction, repair,
or
26.5reconstruction services with an estimated cost exceeding $50,000, the board or management
26.6company must solicit a minimum of three written competitive bids. All bids from a
person
26.7affiliated with a board member, a member of the family of a board member, a management
26.8company or any of its employees, or a member of the family of an employee, must be
26.9disclosed prior to consideration or a vote on the bids.
26.10(i) The board must review all bids and select a vendor based on reasonable business
26.11criteria including but not limited to the cost of the project, the contractor's qualifications,
26.12available warranties, the extent to which the bidder has met the bid solicitation
requirements,
26.13and the length of time estimated to complete the project.
26.14(j) The competitive bid requirement outlined in this section may be waived if:
26.15(1) multiple bids cannot be obtained despite reasonable efforts;
26.16(2) emergency repairs are required to protect the health or safety of the unit owners;
26.17(3) there has been significant damage to the property that must be addressed without
26.18delay to prevent further damage to the property;
26.19(4) the work is covered by a warranty; or
26.20(5) the vendor is the only available vendor capable of providing the required goods
or
26.21services.
26.22(k) The association must maintain a record of the bid selection process and the contracts
26.23awarded. The records must be made available for inspection for a period of six years.
26.24(l) Upon request of a unit owner, a report must be prepared by the board of directors
26.25listing all contracts for goods or services for the previous budget year, including
the purpose
26.26of the contract, the amount of the contract, and the identity of the recipient of
the contract
26.27award. The requestor may be charged a reasonable amount for preparation of the report.
26.28(m) A property management company that is hired by a declarant or board of directors
26.29on behalf of an association may not enter into an automatically renewing contract
for goods
26.30or services unless the contract allows for termination of the contract at any time
with no
26.31less than 90 days' notice.
26.32EFFECTIVE DATE.This section is effective January 1, 2026.
27.1 Sec. 7. Minnesota Statutes 2024, section 515B.3-106, is amended to read:
27.2515B.3-106 BYLAWS; ANNUAL REPORT.
27.3(a) A common interest community shall have bylaws which comply with this chapter
27.4and the statute under which the association is incorporated. The bylaws and any amendments
27.5may be recorded, but need not be recorded to be effective unless so provided in the
bylaws.
27.6Any amendment, addition, or repeal of the bylaws must be approved at the annual or
special
27.7meeting, or by mail or electronic mail, and an association must give unit owners adequate
27.8notice and the opportunity to comment on the proposed change at a meeting at which
the
27.9change is considered. Upon receipt of a petition to revoke a bylaw signed by at least
20
27.10percent of the total votes in the association that are allocated, the board must notify
the unit
27.11owners of the meeting at which revocation of the bylaw will be considered. The bylaw
may
27.12be revoked if approved by the majority vote of the total votes in the association
that are
27.13allocated.
27.14(b) The bylaws shall provide that, in addition to any statutory requirements:
27.15(1) A meeting of the members shall be held at least once each year, and a specified
27.16officer of the association shall give notice of the meeting as provided in section
515B.3-108.
27.17(2) An annual report shall be prepared by the association and a copy of the report
shall
27.18be provided to each unit owner at or prior to the annual meeting.
27.19(c) The annual report shall contain at a minimum:
27.20(1) a statement of any capital expenditures in excess of two percent of the current
budget
27.21or $5,000, whichever is greater, approved by the association for the current fiscal
year or
27.22succeeding two fiscal years;
27.23(2) a statement of the association's total replacement reserves, the components of
the
27.24common interest community for which the reserves are set aside, and the amounts of
the
27.25reserves, if any, that the board has allocated for the replacement of each of those
components;
27.26(3) a copy of the statement of revenues and expenses for the association's last fiscal
year,
27.27and a balance sheet as of the end of said fiscal year;
27.28(4) a statement of the status of any pending litigation or judgments to which the
27.29association is a party;
27.30(5) a detailed description of the insurance coverage provided by the association including
27.31a statement as to which, if any, of the items referred to in section
515B.3-113, subsection
27.32(b), are insured by the association; and
28.1(6) a statement of the total past due assessments on all units, current as of not
more than
28.260 days prior to the date of the meeting.
28.3EFFECTIVE DATE.This section is effective January 1, 2026.
28.4 Sec. 8. Minnesota Statutes 2024, section 515B.3-107, is amended to read:
28.5515B.3-107 UPKEEP OF COMMON INTEREST COMMUNITY.
28.6(a) Except to the extent provided by the declaration, this subsection or section
28.7515B.3-113, the association is responsible for the maintenance, repair and replacement of
28.8the common elements, and each unit owner is responsible for the maintenance, repair
and
28.9replacement of the unit owner's unit.
A management company may not require an association
28.10to work with a particular vendor. Damage to the common elements or any unit as a result
28.11of the acts or omissions of a unit owner or the association, including damage resulting
from
28.12the unit owner's or association's lack of maintenance or failure to perform necessary
repairs
28.13or replacement, is the responsibility of the unit owner or association responsible
for causing
28.14the damage, or whose agents or
, subject to section 515B.3-115, subsection (g), and section
28.15515B.3-1151, subsection (g), invitees caused the damage.
28.16(b) The association's board of directors shall prepare and approve a written preventative
28.17maintenance plan, maintenance schedule, and maintenance budget for the common elements.
28.18The association shall follow the approved preventative maintenance plan. The association's
28.19board may amend, modify, or replace an approved preventative maintenance plan or an
28.20approved maintenance schedule from time to time. The association must provide all
unit
28.21owners with a paper copy, electronic copy, or electronic access to the preventative
28.22maintenance plan, the maintenance schedule, and any amendments or modifications to
or
28.23replacements of the preventative maintenance plan and the maintenance schedule. If
a
28.24common interest community was created on or before August 1, 2017, the association's
28.25board of directors shall have until January 1, 2019, to comply with the requirements
of this
28.26subsection.
28.27(c) The association shall have access through and into each unit for purposes of
28.28performing maintenance, repair or replacement for which the association may be responsible.
28.29The association and any public safety personnel shall also have access for purposes
of
28.30abating or correcting any condition in the unit which violates any governmental law,
28.31ordinance or regulation, which may cause material damage to or jeopardize the safety
of
28.32the common interest community, or which may constitute a health or safety hazard for
28.33occupants of units.
29.1(d) Neither the association, nor any unit owner other than the declarant or its affiliates,
29.2is subject to a claim for payment of expenses incurred in connection with any additional
29.3real estate.
29.4(e) In exercising any authority granted to it under the declaration to approve or
disapprove
29.5proposed changes to a unit or limited common element, the association's board shall
provide
29.6a fair, reasonable, and expeditious procedure for making any decision. The procedure
shall
29.7be set forth in the association's governing documents which may include rules and
29.8regulations. The procedures shall state the maximum time for issuance of any decision
on
29.9a proposal or a request for consideration. At a minimum, the association's board must
make
29.10a decision within 90 days after the initial submission of the proposal or submission
of any
29.11additional information or changes to the proposal requested by the association's board
in
29.12response to the initial submission. A decision must be in writing, must be made in
good
29.13faith, and must be reasonable.
29.14(f) Unless expressly provided for in the declaration, the association must not enforce
29.15any restriction on parking of a personal vehicle on a public street or public road
for which
29.16the state or local government has assumed responsibility for maintenance and repairs,
unless
29.17the authority to regulate such parking has been expressly delegated to the association
by
29.18the state or local government under terms prescribing the manner in which the association
29.19may exercise that authority. Any such delegation is valid for a period not to exceed
five
29.20years, at which time the association must reapply to the delegating entity. As used
in this
29.21subsection, "personal vehicle" means an automobile with a gross vehicle weight of
less than
29.2226,001 pounds that is used for personal pleasure, travel, or commuting to and from
a place
29.23of work, including but not limited to a van, pickup truck, small truck, ambulance,
law
29.24enforcement vehicle, emergency response vehicle, or utility company vehicle. A personal
29.25vehicle does not include a motor home, self-propelled recreational vehicle, or a commercial
29.26vehicle used primarily for commercial business unless otherwise stated in this section.
A
29.27unit owner or resident must be permitted to park a personal or work vehicle on the
unit
29.28owner's property, the limited common elements allocated to the unit owner, or a common
29.29element driveway that serves only the owner's unit, provided the vehicle's length
does not
29.30encroach on another unit owner's property or interfere with the association's ability
to
29.31maintain roads or common elements. An association must not prohibit or restrict parking
29.32with the exception of the exclusions listed in this section.
29.33EFFECTIVE DATE.This section is effective January 1, 2026.
30.1 Sec. 9. Minnesota Statutes 2024, section 515B.3-108, is amended to read:
30.2515B.3-108 MEETINGS.
30.3(a) A meeting of the association shall be held at least once each year. At each annual
30.4meeting, there shall be, at a minimum, (i) an election of successor directors for
those directors
30.5whose terms have expired, (ii) a report on the activities and financial condition
of the
30.6association, and (iii) consideration of and action on any other matters included in
the notice
30.7of meeting. Unless the bylaws provide otherwise, special meetings of the association
may
30.8be called by the president and shall be called by the president or secretary upon
the written
30.9petition of a majority of the board or unit owners entitled to cast at least 20 percent
of the
30.10votes in the association.
30.11(b) Not less than 21 nor more than 30 days in advance of any annual meeting, and not
30.12less than seven nor more than 30 days in advance of any special meeting, the secretary
or
30.13other officer specified in the bylaws shall cause notice to be hand delivered or sent
postage
30.14prepaid by United States mail to the mailing address of each unit, or to any other
address
30.15designated in writing by the unit owner to the association as provided in the bylaws
or by
30.16statute.
30.17(c) The notice of any meeting shall state the date, time and place of the meeting,
the
30.18purposes of the meeting, and, if proxies are permitted, the procedures for appointing
proxies.
30.19The notice must include copies or a link to electronic copies of any documents that
are
30.20subject to discussion or approval at the meeting, including the budget.
30.21(d) The board may provide for reasonable procedures governing the conduct of meetings
30.22and elections.
30.23EFFECTIVE DATE.This section is effective January 1, 2026.
30.24 Sec. 10. Minnesota Statutes 2024, section 515B.3-115, is amended to read:
30.25515B.3-115 ASSESSMENTS FOR COMMON EXPENSES; CIC CREATED
30.26BEFORE AUGUST 1, 2010.
30.27(a) The obligation of a unit owner to pay common expense assessments shall be as
30.28follows:
30.29(1) If a common expense assessment has not been levied, the declarant shall pay all
30.30operating expenses of the common interest community, and shall fund the replacement
30.31reserve component of the common expenses as required by subsection (b).
31.1(2) If a common expense assessment has been levied, all unit owners, including the
31.2declarant, shall pay the assessments allocated to their units, subject to the following:
31.3(i) If the declaration so provides, a declarant's liability, and the assessment lien,
for the
31.4common expense assessments, exclusive of replacement reserves, on any unit owned by
31.5the declarant may be limited to 25 percent or more of any assessment, exclusive of
31.6replacement reserves, until the unit or any building located in the unit is substantially
31.7completed. Substantial completion shall be evidenced by a certificate of occupancy
in any
31.8jurisdiction that issues the certificate.
31.9(ii) If the declaration provides for a reduced assessment pursuant to paragraph (2)(i),
31.10the declarant shall be obligated, within 60 days following the termination of the
period of
31.11declarant control, to make up any operating deficit incurred by the association during
the
31.12period of declarant control. The existence and amount, if any, of the operating deficit
shall
31.13be determined using the accrual basis of accounting applied as of the date of termination
31.14of the period of declarant control, regardless of the accounting methodology previously
31.15used by the association to maintain its accounts.
31.16(b) The replacement reserve component of the common expenses shall be funded for
31.17each unit in accordance with the projected annual budget required by section
31.18515B.4-102(a)(23) provided that the funding of replacement reserves with respect to a unit
31.19shall commence no later than the date that the unit or any building located within
the unit
31.20boundaries is substantially completed. Substantial completion shall be evidenced by
a
31.21certificate of occupancy in any jurisdiction that issues the certificate.
31.22(c) After an assessment has been levied by the association, assessments shall be levied
31.23at least annually, based upon a budget approved at least annually by the association.
The
31.24association shall provide each unit owner with a copy of the proposed annual budget
prior
31.25to the annual meeting at which the budget is to be approved and allow unit owners
to provide
31.26input on the budget prior to or during the meeting.
31.27(d) Except as modified by subsections (a)(1) and (2), (e), (f), and (g), all common
31.28expenses shall be assessed against all the units in accordance with the allocations
established
31.29by the declaration pursuant to section
515B.2-108.
31.30(e) Unless otherwise required by the declaration:
31.31(1) any common expense associated with the maintenance, repair, or replacement of
a
31.32limited common element shall be assessed against the units to which that limited common
31.33element is assigned, equally, or in any other proportion the declaration provides;
32.1(2) any common expense or portion thereof benefiting fewer than all of the units may
32.2be assessed exclusively against the units benefited, equally, or in any other proportion
the
32.3declaration provides;
32.4(3) the costs of insurance may be assessed in proportion to risk or coverage, and
the
32.5costs of utilities may be assessed in proportion to usage;
32.6(4) subject to
subsection (k) and section
515B.3-102(a)(11), reasonable attorney fees
32.7and costs incurred by the association in connection with (i) the collection of assessments
32.8against a unit owner, and (ii) the enforcement of this chapter, the articles, bylaws,
declaration,
32.9or rules and regulations against a unit owner, may be assessed against the unit owner's
unit
32.10subject to section
515B.3-116(h)
, provided that no fees or costs may be assessed if the
32.11association uses a collection agency as defined in section 332.31 if the fees of the
collection
32.12agency are contingent on the amount collected; and
32.13(5)
subject to subsection (k), fees, charges, late charges,
and fines
and interest may be
32.14assessed as provided in section
515B.3-116(a).
32.15(f) Assessments levied under section
515B.3-116 to pay a judgment against the association
32.16may be levied only against the units in the common interest community at the time
the
32.17judgment was entered, in proportion to their common expense liabilities.
32.18(g) If any damage to the common elements or another unit is caused by the act or omission
32.19of any unit owner, or occupant of a unit, or their invitees, the association may assess
the
32.20costs of repairing the damage exclusively against the unit owner's unit to the extent
not
32.21covered by insurance.
32.22(h) Subject to any shorter period specified by the declaration or bylaws, if any installment
32.23of an assessment becomes more than 60 days past due, then the association may, upon
ten
32.24days' written notice to the unit owner, declare the entire amount of the assessment
32.25immediately due and payable in full, except that any portion of the assessment that
represents
32.26installments that are not due and payable without acceleration as of the date of reinstatement
32.27must not be included in the amount that a unit owner must pay to reinstate under section
32.28580.30 or chapter 581.
32.29(i) If common expense liabilities are reallocated for any purpose authorized by this
32.30chapter, common expense assessments and any installment thereof not yet due shall
be
32.31recalculated in accordance with the reallocated common expense liabilities.
32.32(j) An assessment against fewer than all of the units must be levied within three
years
32.33after the event or circumstances forming the basis for the assessment, or shall be
barred.
33.1(k) An association may offer a unit owner a reasonable payment agreement and take
33.2into consideration the financial circumstances of the unit owner.
33.3(k) (l) This section applies only to common interest communities created before August
33.41, 2010.
33.5EFFECTIVE DATE.This section is effective January 1, 2026.
33.6 Sec. 11. Minnesota Statutes 2024, section 515B.3-1151, is amended to read:
33.7515B.3-1151 ASSESSMENTS FOR COMMON EXPENSES; CIC CREATED ON
33.8OR AFTER AUGUST 1, 2010.
33.9(a) The association shall approve an annual budget of common expenses at or prior
to
33.10the conveyance of the first unit in the common interest community to a purchaser and
33.11annually thereafter.
The association shall provide each unit owner with a copy of the proposed
33.12annual budget prior to the annual meeting at which the budget is to be approved and
allow
33.13unit owners to provide input on the budget prior to or during the meeting. The annual budget
33.14shall include all customary and necessary operating expenses and replacement reserves
for
33.15the common interest community, consistent with this section and section
515B.3-114. For
33.16purposes of replacement reserves under subsection (b), until an annual budget has
been
33.17approved, the reserves shall be paid based upon the budget contained in the disclosure
33.18statement required by section
515B.4-102. The obligation of a unit owner to pay common
33.19expenses shall be as follows:
33.20(1) If a common expense assessment has not been levied by the association, the declarant
33.21shall pay all common expenses of the common interest community, including the payment
33.22of the replacement reserve component of the common expenses for all units in compliance
33.23with subsection (b).
33.24(2) If a common expense assessment has been levied by the association, all unit owners,
33.25including the declarant, shall pay the assessments levied against their units, except
as follows:
33.26(i) The declaration may provide for an alternate common expense plan whereby the
33.27declarant's common expense liability, and the corresponding assessment lien against
the
33.28units owned by the declarant, is limited to: (A) paying when due, in compliance with
33.29subsection (b), an amount equal to the full share of the replacement reserves allocated
to
33.30units owned by the declarant, as set forth in the association's annual budget approved
as
33.31provided in this subsection; and (B) paying when due all accrued expenses of the common
33.32interest community in excess of the aggregate assessments payable with respect to
units
33.33owned by persons other than a declarant; provided, that the alternate common expense
plan
34.1shall not affect a declarant's obligation to make up any operating deficit pursuant
to item
34.2(iv), and shall terminate upon the termination of any period of declarant control
unless
34.3terminated earlier pursuant to item (iii).
34.4(ii) The alternate common expense plan may be authorized only by including in the
34.5declaration and the disclosure statement required by section
515B.4-102 provisions
34.6authorizing and disclosing the alternate common expense plan as described in item
(i), and
34.7including in the disclosure statement either (A) a statement that the alternate common
34.8expense plan will have no effect on the level of services or amenities anticipated
by the
34.9association's budget contained in the disclosure statement, or (B) a statement describing
34.10how the services or amenities may be affected.
34.11(iii) A declarant shall give notice to the association of its intent to utilize the
alternate
34.12common expense plan and a commencement date after the date the notice is given. The
34.13alternate common expense plan shall be valid only for periods after the notice is
given. A
34.14declarant may terminate its right to utilize the alternate common expense plan prior
to the
34.15termination of the period of declarant control only by giving notice to the association
and
34.16the unit owners at least 30 days prior to a selected termination date set forth in
the notice.
34.17(iv) If a declarant utilizes an alternate common expense plan, that declarant shall
cause
34.18to be prepared and delivered to the association, at the declarant's expense, within
90 days
34.19after the termination of the period of declarant control, an audited balance sheet
and profit
34.20and loss statement certified to the association and prepared by an accountant having
the
34.21qualifications set forth in section
515B.3-121(b). The audit shall be binding on the declarant
34.22and the association.
34.23(v) If the audited profit and loss statement shows an accumulated operating deficit,
the
34.24declarant shall be obligated to make up the deficit within 15 days after delivery
of the audit
34.25to the association, and the association shall have a claim against the declarant for
an amount
34.26equal to the deficit until paid. A declarant who does not utilize an alternate common
expense
34.27plan is not liable to make up any operating deficit. If more than one declarant utilizes
an
34.28alternate common expense plan, all declarants who utilize the plan are jointly and
severally
34.29liable to the association for any operating deficit.
34.30(vi) The existence and amount, if any, of the operating deficit shall be determined
using
34.31the accrual method of accounting applied as of the date of termination of the period
of
34.32declarant control, regardless of the accounting methodology previously used by the
34.33association to maintain its accounts.
35.1(vii) Unless approved by a vote of the unit owners other than the declarant and its
35.2affiliates, the operating deficit shall not be made up, prior to the election by the
unit owners
35.3of a board of directors pursuant to section
515B.3-103(d), through the use of a special
35.4assessment described in subsection (c) or by assessments described in subsections
(e), (f),
35.5and (g).
35.6(viii) The use by a declarant of an alternate common expense plan shall not affect
the
35.7obligations of the declarant or the association as provided in the declaration, the
bylaws, or
35.8this chapter, or as represented in the disclosure statement required by section
515B.4-102,
35.9except as to matters authorized by this chapter.
35.10(b) The replacement reserves required by section
515B.3-114 shall be paid to the
35.11association by each unit owner for each unit owned by that unit owner in accordance
with
35.12the association's annual budget approved pursuant to subsection (a), regardless of
whether
35.13an annual assessment has been levied or whether the declarant has utilized an alternate
35.14common expense plan under subsection (a)(2). Replacement reserves shall be paid with
35.15respect to a unit commencing as of the later of (1) the date of creation of the common
interest
35.16community or (2) the date that the structure and exterior of the building containing
the unit,
35.17or the structure and exterior of any building located within the unit boundaries,
but excluding
35.18the interior finishing of the structure itself, are substantially completed. If the
association
35.19has not approved an annual budget as of the commencement date for the payment of
35.20replacement reserves, then the reserves shall be paid based upon the budget contained
in
35.21the disclosure statement required by section
515B.4-102.
35.22(c) After an assessment has been levied by the association, assessments shall be levied
35.23at least annually, based upon an annual budget approved by the association. In addition
to
35.24and not in lieu of annual assessments, an association may, if so provided in the declaration,
35.25levy special assessments against all units in the common interest community based
upon
35.26the same formula required by the declaration for levying annual assessments. Special
35.27assessments may be levied only (1) to cover expenditures of an emergency nature, (2)
to
35.28replenish underfunded replacement reserves, (3) to cover unbudgeted capital expenditures
35.29or operating expenses, or (4) to replace certain components of the common interest
35.30community described in section
515B.3-114(a), if such alternative method of funding is
35.31approved under section
515B.3-114(a)(5). The association may also levy assessments against
35.32fewer than all units as provided in subsections (e), (f), and (g). An assessment under
35.33subsection (e)(2) for replacement reserves is subject to the requirements of section
35.34515B.3-1141(a)(5).
36.1(d) Except as modified by subsections (a),
clauses paragraphs (1) and (2), (e), (f), and
36.2(g), all common expenses shall be assessed against all the units in accordance with
the
36.3allocations established by the declaration pursuant to section
515B.2-108.
36.4(e) Unless otherwise required by the declaration:
36.5(1) any common expense associated with the maintenance, repair, or replacement of
a
36.6limited common element shall be assessed against the units to which that limited common
36.7element is assigned, equally, or in any other proportion the declaration provides;
36.8(2) any common expense or portion thereof benefiting fewer than all of the units may
36.9be assessed exclusively against the units benefited, equally, or in any other proportion
the
36.10declaration provides;
36.11(3) the costs of insurance may be assessed in proportion to risk or coverage, and
the
36.12costs of utilities may be assessed in proportion to usage;
36.13(4) subject to
subsection (k) and section
515B.3-102(a)(11), reasonable attorney fees
36.14and costs incurred by the association in connection with (i) the collection of assessments,
36.15and (ii) the enforcement of this chapter, the articles, bylaws, declaration, or rules
and
36.16regulations, against a unit owner, may be assessed against the unit owner's unit,
subject to
36.17section
515B.3-116(h)
, provided that no fees or costs may be assessed if the association
36.18uses a collection agency as defined in section 332.31 if the fees of the collection
agency are
36.19contingent on the amount collected; and
36.20(5)
subject to subsection (k), fees, charges, late charges,
and fines
, and interest may be
36.21assessed as provided in section
515B.3-116(a).
36.22(f) Assessments levied under section
515B.3-116 to pay a judgment against the association
36.23may be levied only against the units in the common interest community at the time
the
36.24judgment was entered, in proportion to their common expense liabilities.
36.25(g) If any damage to the common elements or another unit is caused by the act or omission
36.26of any unit owner, or occupant of a unit, or their invitees, the association may assess
the
36.27costs of repairing the damage exclusively against the unit owner's unit to the extent
not
36.28covered by insurance.
36.29(h) Subject to any shorter period specified by the declaration or bylaws, if any installment
36.30of an assessment becomes more than 60 days past due, then the association may, upon
ten
36.31days' written notice to the unit owner, declare the entire amount of the assessment
36.32immediately due and payable in full, except that any portion of the assessment that
represents
36.33installments that are not due and payable without acceleration as of the date of reinstatement
37.1must not be included in the amount that a unit owner must pay to reinstate under section
37.2580.30 or chapter 581.
37.3(i) If common expense liabilities are reallocated for any purpose authorized by this
37.4chapter, common expense assessments and any installment thereof not yet due shall
be
37.5recalculated in accordance with the reallocated common expense liabilities.
37.6(j) An assessment against fewer than all of the units must be levied within three
years
37.7after the event or circumstances forming the basis for the assessment, or shall be
barred.
37.8(k) An association may offer a unit owner a reasonable payment agreement and take
37.9into consideration the financial circumstances of the unit owner.
37.10(k) (l) This section applies only to common interest communities created on or after
37.11August 1, 2010.
37.12EFFECTIVE DATE.This section is effective January 1, 2026.
37.13 Sec. 12. Minnesota Statutes 2024, section 515B.3-116, is amended to read:
37.14515B.3-116 LIEN FOR ASSESSMENTS.
37.15(a) The association has a lien on a unit for any assessment levied against that unit
from
37.16the time the assessment becomes due. If an assessment is payable in installments,
the full
37.17amount of the assessment is a lien from the time the first installment thereof becomes
due.
37.18Unless the declaration otherwise provides, fees, charges,
fines as specified in subsection
37.19(h), and late charges
, fines and interest charges pursuant to section
515B.3-102(a)(10), (11)
37.20and (12) are liens, and are enforceable as assessments, under this section. Recording of the
37.21declaration constitutes record notice and perfection of any assessment lien under
this section,
37.22and no further recording of any notice of or claim for the lien is required.
37.23(b) Subject to subsection (c), a lien under this section is prior to all other liens
and
37.24encumbrances on a unit except (i) liens and encumbrances recorded before the declaration
37.25and, in a cooperative, liens and encumbrances which the association creates, assumes,
or
37.26takes subject to, (ii) any first mortgage encumbering the fee simple interest in the
unit, or,
37.27in a cooperative, any first security interest encumbering only the unit owner's interest
in the
37.28unit, (iii) liens for real estate taxes and other governmental assessments or charges
against
37.29the unit, and (iv) a master association lien under section
515B.2-121(h). This subsection
37.30shall not affect the priority of mechanic's liens.
37.31(c) If a first mortgage on a unit is foreclosed, the first mortgage was recorded after
June
37.321, 1994, and no owner or person who acquires the owner's interest in the unit redeems
38.1pursuant to chapter
580,
581, or
582, the holder of the sheriff's certificate of sale from the
38.2foreclosure of the first mortgage or any person who acquires title to the unit by
redemption
38.3as a junior creditor shall take title to the unit subject to a lien in favor of the
association for
38.4unpaid assessments for common expenses levied pursuant to section
515B.3-115(a), (e)(1)
38.5to (3), (f), and (i) which became due, without acceleration, during the six months
immediately
38.6preceding the end of the owner's period of redemption. The common expenses shall be
38.7based upon the association's then current annual budget, notwithstanding the use of
an
38.8alternate common expense plan under section
515B.3-115(a)(2). If a first security interest
38.9encumbering a unit owner's interest in a cooperative unit which is personal property
is
38.10foreclosed, the secured party or the purchaser at the sale shall take title to the
unit subject
38.11to unpaid assessments for common expenses levied pursuant to section
515B.3-115(a),
38.12(e)(1) to (3), (f), and (i) which became due, without acceleration, during the six
months
38.13immediately preceding the first day following either the disposition date pursuant
to section
38.14336.9-610 or the date on which the obligation of the unit owner is discharged pursuant to
38.15section
336.9-622.
38.16(d) Proceedings to enforce an assessment lien shall be instituted within three years
after
38.17the last installment of the assessment becomes payable, or shall be barred.
38.18(e) The unit owner of a unit at the time an assessment is due shall be personally
liable
38.19to the association for payment of the assessment levied against the unit. If there
are multiple
38.20owners of the unit, they shall be jointly and severally liable.
38.21(f) This section does not prohibit actions to recover sums for which subsection (a)
creates
38.22a lien nor prohibit an association from taking a deed in lieu of foreclosure.
38.23(g) The association shall furnish to a unit owner or the owner's authorized agent
upon
38.24written request of the unit owner or the authorized agent a statement setting forth
the amount
38.25of unpaid assessments currently levied against the owner's unit. If the unit owner's
interest
38.26is real estate, the statement shall be in recordable form. The statement shall be
furnished
38.27within ten business days after receipt of the request and is binding on the association
and
38.28every unit owner.
38.29(h) The association's lien may be foreclosed as provided in this subsection.
An
38.30association's lien may not be foreclosed for unpaid fines unless the fine is for a
violation
38.31that meets the conditions for exception to the limit specified in section 515B.3-102,
38.32subsection (c). If a unit owner is delinquent in the payment of assessments properly
imposed
38.33under this chapter, an association may not commence foreclosure for the fees or charges
38.34unless the total amount of the association's lien for unpaid assessments of all types,
other
39.1than assessments for attorney fees, exceeds $1,500 or the total amount of unpaid assessments
39.2has been outstanding for 120 days or more, for a unit with a monthly assessment for
common
39.3expenses of $500 or less; or exceeds $2,500 or the total amount of unpaid assessments
has
39.4been outstanding for 120 days or more, for a unit with a monthly assessment for common
39.5expenses of more than $500.
39.6(1) In a condominium or planned community, the association's lien may be foreclosed
39.7in a like manner as a mortgage containing a power of sale pursuant to chapter
580, or by
39.8action pursuant to chapter
581. The association shall have a power of sale to foreclose the
39.9lien pursuant to chapter 580, except that any portion of the assessment that represents
39.10attorney fees or costs shall not be included in the amount a unit owner must pay to
reinstate
39.11under section 580.30 or chapter 581.
39.12(2) In a cooperative whose unit owners' interests are real estate, the association's
lien
39.13shall be foreclosed in a like manner as a mortgage on real estate as provided in paragraph
39.14(1).
39.15(3) In a cooperative whose unit owners' interests in the units are personal property,
the
39.16association's lien shall be foreclosed in a like manner as a security interest under
article 9
39.17of chapter
336. In any disposition pursuant to section
336.9-610 or retention pursuant to
39.18sections
336.9-620 to
336.9-622, the rights of the parties shall be the same as those provided
39.19by law, except (i) notice of sale, disposition, or retention shall be served on the
unit owner
39.2090 days prior to sale, disposition, or retention, (ii) the association shall be entitled
to its
39.21reasonable costs and attorney fees not exceeding the amount provided by section
582.01,
39.22subdivision 1a, (iii) the amount of the association's lien shall be deemed to be adequate
39.23consideration for the unit subject to disposition or retention, notwithstanding the
value of
39.24the unit, and (iv) the notice of sale, disposition, or retention shall contain the
following
39.25statement in capital letters with the name of the association or secured party filled
in:
39.26"THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of association or
39.27secured party) HAS BEGUN PROCEEDINGS UNDER MINNESOTA STATUTES,
39.28CHAPTER
515B, TO FORECLOSE ON YOUR INTEREST IN YOUR UNIT FOR THE
39.29REASON SPECIFIED IN THIS NOTICE. YOUR INTEREST IN YOUR UNIT WILL
39.30TERMINATE 90 DAYS AFTER SERVICE OF THIS NOTICE ON YOU UNLESS
39.31BEFORE THEN:
39.32(a) THE PERSON AUTHORIZED BY (fill in the name of association or secured party)
39.33AND DESCRIBED IN THIS NOTICE TO RECEIVE PAYMENTS RECEIVES FROM
39.34YOU:
40.1(1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS
40.2(2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS
40.3(3) $500 TO APPLY TO ATTORNEY FEES ACTUALLY EXPENDED OR
40.4INCURRED; PLUS
40.5(4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO (fill
40.6in name of association or secured party) AFTER THE DATE OF THIS NOTICE; OR
40.7(b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
40.8FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL YOUR
40.9CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR
40.10SETTLEMENT. YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND
40.11GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.
40.12IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS WITHIN
40.13THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP RIGHTS IN
40.14YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU WILL LOSE
40.15ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL LOSE YOUR
40.16RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR RIGHT TO
40.17ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND YOU WILL
40.18BE EVICTED. IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT
40.19AN ATTORNEY IMMEDIATELY."
40.20(4) In any foreclosure pursuant to chapter
580,
581, or
582, the rights of the parties shall
40.21be the same as those provided by law, except (i) the period of redemption for unit
owners
40.22shall be six months from the date of sale or a lesser period authorized by law, (ii)
in a
40.23foreclosure by advertisement under chapter 580, the foreclosing party shall be entitled to
40.24costs and disbursements of foreclosure and attorney fees
authorized by the declaration or
40.25bylaws, notwithstanding the provisions of section
582.01, subdivisions 1 and 1a, up to a
40.26maximum of $3,500 for a foreclosure under chapter 580, (iii) in a foreclosure by action
40.27under chapter 581, the foreclosing party shall be entitled to costs and disbursements of
40.28foreclosure and attorney fees as the court shall determine, and (iv) the amount of
the
40.29association's lien shall be deemed to be adequate consideration for the unit subject
to
40.30foreclosure, notwithstanding the value of the unit.
40.31(i) If a holder of a sheriff's certificate of sale, prior to the expiration of the
period of
40.32redemption, pays any past due or current assessments, or any other charges lienable
as
40.33assessments, with respect to the unit described in the sheriff's certificate, then
the amount
40.34paid shall be a part of the sum required to be paid to redeem under section
582.03.
41.1(j) In a cooperative, if the unit owner fails to redeem before the expiration of the
41.2redemption period in a foreclosure of the association's assessment lien, the association
may
41.3bring an action for eviction against the unit owner and any persons in possession
of the unit,
41.4and in that case section
504B.291 shall not apply.
41.5(k) An association may assign its lien rights in the same manner as any other secured
41.6party.
41.7EFFECTIVE DATE.This section is effective January 1, 2026.
41.8 Sec. 13.
[515B.3-122] DISPUTE RESOLUTION.
41.9(a) If a dispute arises between a unit owner and an association, the unit owner may
make
41.10a written request that the parties engage in an informal, good faith process to resolve
the
41.11dispute. If the unit owner requests the association engage in the dispute resolution
process,
41.12the association must participate.
41.13(b) If the dispute involves the imposition of a fine, the unit owner may choose to
either
41.14request the parties engage in the informal process or instead request a hearing before
the
41.15board or a committee appointed by the board, as provided in section 515B.3-102, subsection
41.16(a), clause (11). The dispute resolution process must take place prior to the association
or
41.17management company, or an attorney or another person on their behalf, taking any collection
41.18action. If the informal dispute resolution process does not result in a resolution
of the dispute,
41.19the association may proceed with collection actions. The unit owner is not required
to engage
41.20in the informal dispute resolution process.
41.21(c) An association may make a written request to a unit owner that the owner engage
in
41.22an informal, good faith process to resolve a dispute. If the unit owner agrees to
an informal,
41.23good faith process and the dispute involves the imposition of a fine, the association
may
41.24not proceed with collection actions until the parties have met and no agreement has
been
41.25reached.
41.26(d) The dispute resolution process may take place in person, by phone, or virtually
at a
41.27mutually convenient time. Another person may appear for the association. A unit owner
41.28must not be charged any fees, including attorney fees, to participate in the dispute
resolution
41.29process.
41.30EFFECTIVE DATE.This section is effective January 1, 2026.
42.1 Sec. 14.
[515B.3-125] LEGAL FEES; NOTICE REQUIRED.
42.2(a) Prior to referring a unit owner's inquiry to an attorney for a response for which
the
42.3association may be assessed attorney fees, the board must provide a notice to the
unit owner
42.4with the following information:
42.5(1) a statement that the board plans to refer the matter at issue to an attorney;
42.6(2) the name of the person responsible for payment of any resulting legal fees; and
42.7(3) the hourly rate the attorney charges.
42.8(b) The board must provide the notification under subsection (a) at no cost to the
unit
42.9owner.
42.10(c) The board must provide to a unit owner an itemized invoice for any legal fees
charged
42.11to the unit owner detailing the attorney's rate, the time the attorney spent on the
matter, the
42.12specific services the attorney provided, and the date or dates of service.
42.13EFFECTIVE DATE.This section is effective January 1, 2026.
42.14 Sec. 15. Minnesota Statutes 2024, section 515B.4-102, is amended to read:
42.15515B.4-102 DISCLOSURE STATEMENT; GENERAL PROVISIONS; CIC
42.16CREATED BEFORE AUGUST 1, 2010.
42.17(a) A disclosure statement shall fully and accurately disclose:
42.18(1) the name and, if available, the number of the common interest community;
42.19(2) the name and principal address of the declarant;
42.20(3) the number of units which the declarant has the right to include in the common
42.21interest community and a statement that the common interest community is either a
42.22condominium, cooperative, or planned community;
42.23(4) a general description of the common interest community, including, at a minimum,
42.24(i) the number of buildings, (ii) the number of dwellings per building, (iii) the
type of
42.25construction, (iv) whether the common interest community involves new construction
or
42.26rehabilitation, (v) whether any building was wholly or partially occupied, for any
purpose,
42.27before it was added to the common interest community and the nature of the occupancy,
42.28and (vi) a general description of any roads, trails, or utilities that are located
on the common
42.29elements and that the association or a master association will be required to maintain;
43.1(5) declarant's schedule of commencement and completion of construction of any
43.2buildings and other improvements that the declarant is obligated to build pursuant
to section
43.3515B.4-117;
43.4(6) any expenses or services, not reflected in the budget, that a declarant pays or
provides,
43.5which may become a common expense; the projected common expense attributable to each
43.6of those expenses or services; and an explanation of declarant's limited assessment
liability
43.7under section
515B.3-115(b);
43.8(7) any initial or special fee due from the purchaser to the declarant or the association
43.9at closing, together with a description of the purpose and method of calculating the
fee;
43.10(8) identification of any liens, defects, or encumbrances which will continue to affect
43.11the title to a unit or to any real property owned by the association after the contemplated
43.12conveyance;
43.13(9) a description of any financing offered or arranged by the declarant;
43.14(10) a statement as to whether application has been made for any project approvals
for
43.15the common interest community from the Federal National Mortgage Association (FNMA),
43.16Federal Home Loan Mortgage Corporation (FHLMC), Department of Housing and Urban
43.17Development (HUD) or Department of Veterans Affairs (VA), and which, if any, such
final
43.18approvals have been received;
43.19(11) the terms of any warranties provided by the declarant, including copies of sections
43.20515B.4-112 through
515B.4-115, and any other applicable statutory warranties, and a
43.21statement of any limitations on the enforcement of the applicable warranties or on
damages;
43.22(12) a statement that: (i) within ten days after the receipt of a disclosure statement,
a
43.23purchaser may cancel any contract for the purchase of a unit from a declarant; provided,
43.24that the right to cancel terminates upon the purchaser's voluntary acceptance of a
conveyance
43.25of the unit from the declarant or by the purchaser agreeing to modify or waive the
right to
43.26cancel in the manner provided by section
515B.4-106(a); (ii) if a purchaser receives a
43.27disclosure statement more than ten days before signing a purchase agreement, the purchaser
43.28cannot cancel the purchase agreement; and (iii) if a declarant obligated to deliver
a disclosure
43.29statement fails to deliver a disclosure statement which substantially complies with
this
43.30chapter to a purchaser to whom a unit is conveyed, the declarant shall be liable to
the
43.31purchaser as provided in section
515B.4-106(d);
43.32(13) a statement disclosing to the extent of the declarant's or an affiliate of a
declarant's
43.33actual knowledge, after reasonable inquiry, any unsatisfied judgments or lawsuits
to which
44.1the association is a party, and the status of those lawsuits which are material to
the common
44.2interest community or the unit being purchased;
44.3(14) a statement (i) describing the conditions under which earnest money will be held
44.4in and disbursed from the escrow account, as set forth in section
515B.4-109, (ii) that the
44.5earnest money will be returned to the purchaser if the purchaser cancels the contract
pursuant
44.6to section
515B.4-106, and (iii) setting forth the name and address of the escrow agent;
44.7(15) a detailed description of the insurance coverage provided by the association
for the
44.8benefit of unit owners, including a statement as to which, if any, of the items referred
to in
44.9section
515B.3-113, subsection (b), are insured by the association;
44.10(16) any current or expected fees or charges, other than assessments for common
44.11expenses, to be paid by unit owners for the use of the common elements or any other
44.12improvements or facilities;
44.13(17) the financial arrangements, including any contingencies, which have been made
to
44.14provide for completion of all improvements that the declarant is obligated to build
pursuant
44.15to section
515B.4-118, or a statement that no such arrangements have been made;
44.16(18) in a cooperative: (i) whether the unit owners will be entitled for federal and
state
44.17tax purposes, to deduct payments made by the association for real estate taxes and
interest
44.18paid to the holder of a security interest encumbering the cooperative; (ii) a statement
as to
44.19the effect on the unit owners if the association fails to pay real estate taxes or
payments due
44.20the holder of a security interest encumbering the cooperative; and (iii) the principal
amount
44.21and a general description of the terms of any blanket mortgage, contract for deed,
or other
44.22blanket security instrument encumbering the cooperative property;
44.23(19) a statement: (i) that real estate taxes for the unit or any real property owned
by the
44.24association are not delinquent or, if there are delinquent real estate taxes, describing
the
44.25property for which the taxes are delinquent, stating the amount of the delinquent
taxes,
44.26interest and penalties, and stating the years for which taxes are delinquent, and
(ii) setting
44.27forth the amount of real estate taxes, including the amount of any special assessment
certified
44.28for payment with the real estate taxes, due and payable with respect to the unit in
the year
44.29in which the disclosure statement is given, if real estate taxes have been separately
assessed
44.30against the unit;
44.31(20) if the association or the purchaser of the unit will be a member of a master
44.32association, a statement to that effect, and all of the following information with
respect to
44.33the master association: (i) a copy of the master declaration, the articles of incorporation,
44.34bylaws, and rules and regulations for the master association, together with any amendments
45.1thereto; (ii) the name, address and general description of the master association,
including
45.2a general description of any other association, unit owners, or other persons which
are or
45.3may become members; (iii) a description of any nonresidential use permitted on any
property
45.4subject to the master association; (iv) a statement as to the estimated maximum number
of
45.5associations, unit owners or other persons which may become members of the master
45.6association, and the degree and period of control of the master association by a declarant
45.7or other person; (v) a description of any facilities intended for the benefit of the
members
45.8of the master association and not located on property owned or controlled by a member
or
45.9the master association; (vi) the financial arrangements, including any contingencies,
which
45.10have been made to provide for completion of the facilities referred to in subsection
(v), or
45.11a statement that no arrangements have been made; (vii) any current balance sheet of
the
45.12master association and a projected or current annual budget, as applicable, which
budget
45.13shall include with respect to the master association those items in paragraph (23),
clauses
45.14(i) through (iii), and the projected monthly common expense assessment for each type
of
45.15unit, lot, or other parcel of real estate which is or is planned to be subject to
assessment;
45.16(viii) a description of any expenses or services not reflected in the budget, paid
for or
45.17provided by a declarant or a person executing the master declaration, which may become
45.18an expense of the master association in the future; (ix) a description of any powers
delegated
45.19to and accepted by the master association pursuant to section
515B.2-121(f)(2); (x)
45.20identification of any liens, defects or encumbrances that will continue to affect
title to
45.21property owned or operated by the master association for the benefit of its members;
(xi)
45.22the terms of any warranties provided by any person for construction of facilities
in which
45.23the members of the master association have or may have an interest, and any known
defects
45.24in the facilities which would violate the standards described in section
515B.4-112(b); (xii)
45.25a statement disclosing, after inquiry of the master association, any unsatisfied judgments
45.26or lawsuits to which the master association is a party, and the status of those lawsuits
which
45.27are material to the master association; (xiii) a description of any insurance coverage
provided
45.28for the benefit of its members by the master association; and (xiv) any current or
expected
45.29fees or charges, other than assessments by the master association, to be paid by members
45.30of the master association for the use of any facilities intended for the benefit of
the members;
45.31(21) a statement as to whether the unit will be substantially completed at the time
of
45.32conveyance to a purchaser, and if not substantially completed, who is responsible
to complete
45.33and pay for the construction of the unit;
45.34(22) a copy of the declaration and any amendments thereto (exclusive of the CIC plat);
45.35any other recorded covenants, conditions, restrictions, or reservations affecting
the common
46.1interest community; the articles of incorporation, bylaws and any rules or regulations
of the
46.2association; any agreement excluding or modifying any implied warranties; any agreement
46.3reducing the statute of limitations for the enforcement of warranties; any contracts
or leases
46.4to be signed by purchaser at closing; and a brief narrative description of any (i)
contracts
46.5or leases that are or may be subject to cancellation by the association under section
46.6515B.3-105 and (ii) any material agreements entered into between the declarant and a
46.7governmental entity that affect the common interest community;
and
46.8(23) a balance sheet for the association, current within 90 days; a projected annual
budget
46.9for the association; and a statement identifying the party responsible for the preparation
of
46.10the budget. The budget shall assume that all units intended to be included in the
common
46.11interest community, based upon the declarant's good faith estimate, have been subjected
to
46.12the declaration; provided, that additional budget portrayals based upon a lesser number
of
46.13units are permitted. The budget shall include, without limitation: (i) a statement
of the
46.14amount included in the budget as a reserve for replacement; (ii) a statement of any
other
46.15reserves; (iii) the projected common expense for each category of expenditures for
the
46.16association; (iv) the projected monthly common expense assessment for each type of
unit;
46.17and (v) a footnote or other reference to those components of the common interest community
46.18the maintenance, repair, or replacement of which the budget assumes will be funded
by
46.19assessments under section
515B.3-115(e), rather than by assessments included in the
46.20association's annual budget, and a statement referencing section
515B.3-115(e)(1) or (2),
46.21as the source of funding. If, based upon the association's then current budget, the
monthly
46.22common expense assessment for the unit at the time of conveyance to the purchaser
is
46.23anticipated to exceed the monthly assessment stated in the budget, a statement to
such effect
46.24shall be included
;
46.25(24) a copy of any fact sheet or other publication by the attorney general that describes,
46.26in plain language, common interest communities and homeowner associations and explains
46.27the rights and responsibilities of unit owners and associations; and
46.28(25) the schedules of fines required under section 515B.3-102, subsections (a), paragraph
46.29(10), and (c).
46.30(b) A declarant shall promptly amend the disclosure statement to reflect any material
46.31change in the information required by this chapter.
46.32(c) The master association, within ten days after a request by a declarant, a holder
of
46.33declarant rights, or a buyer referred to in section
515B.4-101(e), or the authorized
46.34representative of any of them, shall furnish the information required to be provided
by
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 before August
1,
47.72010.
47.8EFFECTIVE DATE.This section is effective January 1, 2026.
47.9 Sec. 16. Minnesota Statutes 2024, section 515B.4-1021, is amended to read:
47.10515B.4-1021 DISCLOSURE STATEMENT; GENERAL PROVISIONS; CIC
47.11CREATED ON OR AFTER AUGUST 1, 2010.
47.12(a) A disclosure statement shall fully and accurately disclose:
47.13(1) the name and, if available, the number of the common interest community;
47.14(2) the name and principal address of each declarant holding any special declarant
rights;
47.15a description of the special declarant rights held by each declarant; a description
of the units
47.16or additional real estate to which the respective special declarant rights apply;
and a copy
47.17of any recorded transfer of special declarant rights pursuant to section
515B.3-104(a), or
47.18any instrument recorded pursuant to section
515B.3-104(b), (g), or (h);
47.19(3) the total number of units which all declarants have the right to include in the
common
47.20interest community and a statement that the common interest community is either a
47.21condominium, cooperative, or planned community;
47.22(4) a general description of the common interest community, including, at a minimum,
47.23(i) the number of buildings, (ii) the number of dwellings per building, (iii) the
type of
47.24construction, (iv) whether the common interest community involves new construction
or
47.25rehabilitation, (v) whether any building was wholly or partially occupied, for any
purpose,
47.26before it was added to the common interest community, and the nature of the occupancy,
47.27(vi) a general description of any roads, trails, or utilities that are located on
the common
47.28elements and that the association or master association will be required to maintain,
(vii) a
47.29description of any declarant licensing rights under section
515B.2-109(e), and (viii) the
47.30initial maintenance plan, initial maintenance schedule, and maintenance budget under
section
47.31515B.3-107(b). The initial maintenance plan prepared by the declarant must be based on
47.32the best available information listing all building elements to which the plan will
apply and
47.33the generally accepted standards of maintenance on which the plan is based. The initial
plan
48.1must be dated and signed by the declarant and be fully funded by the initial budget
provided
48.2by the declarant;
48.3(5) declarant's schedule of commencement and completion of construction of any
48.4buildings and other improvements that the declarant is obligated to build pursuant
to section
48.5515B.4-117;
48.6(6) any expenses or services, not reflected in the budget, that the declarant pays
or
48.7provides, which may become a common expense; the projected common expense attributable
48.8to each of those expenses or services; a description of any alternate common expense
plan
48.9under section
515B.3-115(a)(2)(i); and, if the declaration provides for an alternate common
48.10expense plan, either (i) a statement that the alternate common expense plan will have
no
48.11effect on the level of services or amenities anticipated by the association's budget
or disclosed
48.12in the disclosure statement, or (ii) a statement describing how the services or amenities
may
48.13be affected;
48.14(7) any initial or special fee due from the purchaser to the declarant or the association
48.15at closing, together with a description of the purpose and method of calculating the
fee;
48.16(8) identification of any liens, defects, or encumbrances which will continue to affect
48.17the title to a unit or to any real property owned by the association after the contemplated
48.18conveyance;
48.19(9) a description of any financing offered or arranged by the declarant;
48.20(10) a statement as to whether application has been made for any project approvals
for
48.21the common interest community from the Federal National Mortgage Association (FNMA),
48.22Federal Home Loan Mortgage Corporation (FHLMC), Department of Housing and Urban
48.23Development (HUD), or Department of Veterans Affairs (VA), and which, if any, such
48.24final approvals have been received;
48.25(11) the terms of any warranties provided by the declarant, including copies of sections
48.26515B.4-112 to
515B.4-115, and any other applicable statutory warranties, and a statement
48.27of any limitations on the enforcement of the applicable warranties or on damages;
48.28(12) a statement that:
48.29(i) within ten days after the receipt of a disclosure statement, a purchaser may cancel
48.30any contract for the purchase of a unit from a declarant; provided, that the right
to cancel
48.31terminates upon the purchaser's voluntary acceptance of a conveyance of the unit from
the
48.32declarant or by the purchaser agreeing to modify or waive the right to cancel in the
manner
48.33provided by section
515B.4-106(a);
49.1(ii) if a purchaser receives a disclosure statement more than ten days before signing
a
49.2purchase agreement, the purchaser cannot cancel the purchase agreement; and
49.3(iii) if a declarant obligated to deliver a disclosure statement fails to deliver
a disclosure
49.4statement which substantially complies with this chapter to a purchaser to whom a
unit is
49.5conveyed, the declarant shall be liable to the purchaser as provided in section
515B.4-106(d);
49.6(13) a statement disclosing to the extent of the declarant's or an affiliate of a
declarant's
49.7actual knowledge, after reasonable inquiry, any unsatisfied judgments or lawsuits
to which
49.8the association is a party, and the status of those lawsuits which are material to
the common
49.9interest community or the unit being purchased;
49.10(14) a statement (i) describing the conditions under which earnest money will be held
49.11in and disbursed from the escrow account, as set forth in section
515B.4-109, (ii) that the
49.12earnest money will be returned to the purchaser if the purchaser cancels the contract
pursuant
49.13to section
515B.4-106, and (iii) setting forth the name and address of the escrow agent;
49.14(15) a detailed description of the insurance coverage provided by the association
for the
49.15benefit of unit owners, including a statement as to which, if any, of the items referred
to in
49.16section
515B.3-113(b), are insured by the association;
49.17(16) any current or expected fees or charges, other than assessments for common
49.18expenses, to be paid by unit owners for the use of the common elements or any other
49.19improvements or facilities;
49.20(17) the financial arrangements, including any contingencies, which have been made
to
49.21provide for completion of all improvements that the declarant is obligated to build
pursuant
49.22to section
515B.4-118, or a statement that no such arrangements have been made;
49.23(18) in a cooperative:
49.24(i) whether the unit owners will be entitled, for federal and state tax purposes,
to deduct
49.25payments made by the association for real estate taxes and interest paid to the holder
of a
49.26security interest encumbering the cooperative;
49.27(ii) a statement as to the effect on the unit owners if the association fails to pay
real estate
49.28taxes or payments due the holder of a security interest encumbering the cooperative;
and
49.29(iii) the principal amount and a general description of the terms of any blanket mortgage,
49.30contract for deed, or other blanket security instrument encumbering the cooperative
property;
49.31(19) a statement:
50.1(i) that real estate taxes for the unit or any real property owned by the association
are
50.2not delinquent or, if there are delinquent real estate taxes, describing the property
for which
50.3the taxes are delinquent, stating the amount of the delinquent taxes, interest, and
penalties,
50.4and stating the years for which taxes are delinquent; and
50.5(ii) setting forth the amount of real estate taxes, including the amount of any special
50.6assessment certified for payment with the real estate taxes, due and payable with
respect to
50.7the unit in the year in which the disclosure statement is given, if real estate taxes
have been
50.8separately assessed against the unit;
50.9(20) if the unit or other parcel of real estate being purchased is or may be subject
to a
50.10master declaration at the time of the conveyance from the declarant to the purchaser,
a
50.11statement to that effect, and all of the following information with respect to the
master
50.12association:
50.13(i) copies of the following documents (which may be in proposed form if the master
50.14declaration has not been recorded): the master declaration, the articles of incorporation,
50.15bylaws, and rules and regulations for the master association, together with any amendments
50.16thereto;
50.17(ii) the name and address of the master developer, and the name, address, and general
50.18description of the master association, including a general description of any other
association,
50.19unit owners, or other persons which are or may become members;
50.20(iii) a description of any nonresidential use permitted on any property subject to
the
50.21master declaration;
50.22(iv) a statement as to the estimated maximum number of associations, unit owners,
or
50.23other persons which may become members of the master association, and a description
of
50.24any period of control of the master association and rights to appoint master association
50.25directors by a master developer or other person pursuant to section
515B.2-121(c);
50.26(v) a description of any facilities intended for the benefit of the members of the
master
50.27association and not located on property owned or controlled by a member of the master
50.28association;
50.29(vi) the financial arrangements, including any contingencies, which have been made
to
50.30provide for completion of the facilities referred to in subsection (v), or a statement
that no
50.31arrangements have been made;
50.32(vii) any current balance sheet of the master association and a projected or current
annual
50.33budget, as applicable, which budget shall include with respect to the master association
51.1those items in paragraph (23), clauses (i) through (iii), and the projected monthly
or other
51.2periodic common expense assessment payment for each type of unit, lot, or other parcel
of
51.3real estate which is or is planned to be subject to assessment;
51.4(viii) a description of any expenses or services not reflected in the budget, paid
for or
51.5provided by a master developer or another person executing the master declaration,
which
51.6may become an expense of the master association in the future;
51.7(ix) a description of any powers delegated to and accepted by the master association
51.8pursuant to section
515B.2-121(e)(2);
51.9(x) identification of any liens, defects, or encumbrances that will continue to affect
title
51.10to property owned or operated by the master association for the benefit of its members;
51.11(xi) the terms of any warranties provided by any person for construction of facilities
in
51.12which the members of the master association have or may have an interest, and any
known
51.13defects in the facilities which would violate the standards described in section
51.14515B.4-113(b)(2);
51.15(xii) a statement disclosing, after inquiry of the master association, any unsatisfied
51.16judgments or lawsuits to which the master association is a party, and the status of
those
51.17lawsuits which are material to the master association;
51.18(xiii) a description of any insurance coverage provided for the benefit of its members
51.19by the master association; and
51.20(xiv) any current or expected fees or charges, other than assessments by the master
51.21association, to be paid by members of the master association for the use of any facilities
51.22intended for the benefit of the members;
51.23(21) a statement as to whether the unit will be substantially completed at the time
of
51.24conveyance to a purchaser, and, if not substantially completed, who is responsible
to complete
51.25and pay for the construction of the unit;
51.26(22) copies of the following documents (which may be in proposed form if the declaration
51.27has not been recorded): the declaration and any supplemental declaration, and any
51.28amendments thereto (exclusive of the CIC plat); any other recorded covenants, conditions,
51.29restrictions, and reservations affecting the common interest community; the articles
of
51.30incorporation, bylaws, and any rules or regulations of the association; the names
of the
51.31current members of the association's board of directors; any agreement excluding or
51.32modifying any implied warranties; any agreement reducing the statute of limitations
for the
51.33enforcement of warranties; any contracts or leases to be signed by the purchaser at
closing;
52.1and a description of any material contracts, leases, or other agreements affecting
the common
52.2interest community;
and
52.3(23) a balance sheet for the association, following the creation of the association,
current
52.4within 90 days; a projected annual budget for the association; and a statement identifying
52.5the party responsible for the preparation of the budget. The budget shall assume that
all
52.6units intended to be included in the common interest community, based upon the declarant's
52.7good faith estimate, have been subjected to the declaration; provided, that additional
budget
52.8portrayals based upon a lesser number of units are permitted. The budget shall include,
52.9without limitation:
52.10(i) a statement of the amount included in the budget as a reserve for replacement,
the
52.11components of the common interest community for which the reserves are budgeted, and
52.12the amounts of the reserves, if any, that are allocated for the replacement of each
of those
52.13components;
52.14(ii) a statement of any other reserves;
52.15(iii) the projected common expense for each category of expenditures for the association;
52.16(iv) the projected monthly common expense assessment for each type of unit;
52.17(v) a statement as to the components of the common interest community whose
52.18replacement will be funded by assessments under section
515B.3-115(c) or (e), rather than
52.19by replacement reserves as approved pursuant to section
515B.3-114(a). If, based upon the
52.20association's then-current budget, the monthly common expense assessment for the unit
at
52.21the time of conveyance to the purchaser is anticipated to exceed the monthly assessment
52.22stated in the budget, a statement to such effect shall be included
;
52.23(24) a copy of any fact sheet or other publication by the attorney general that describes,
52.24in plain language, common interest communities and homeowner associations and explains
52.25the rights and responsibilities of unit owners and associations; and
52.26(25) the schedules of fines required under section 515B.3-102, subsections (a), paragraph
52.27(10), and (c).
52.28(b) A declarant shall promptly amend the disclosure statement to reflect any material
52.29change in the information required by this chapter.
52.30(c) The master association, within ten days after a request by a declarant, a holder
of
52.31declarant rights, or a buyer referred to in section
515B.4-101(e), or the authorized
52.32representative of any of them, shall furnish the information required to be provided
by
52.33subsection (a)(20). A declarant or other person who provides information pursuant
to
53.1subsection (a)(20), is not liable to the buyer for any erroneous information if the
declarant
53.2or other person: (i) is not an affiliate of or related in any way to a person authorized
to
53.3appoint the master association board pursuant to section
515B.2-121(c)(3), and (ii) has no
53.4actual knowledge that the information is incorrect.
53.5(d) This section applies only to common interest communities created on or after August
53.61, 2010.
53.7EFFECTIVE DATE.This section is effective January 1, 2026.
53.8 Sec. 17. Minnesota Statutes 2024, section 515B.4-116, is amended to read:
53.9515B.4-116 RIGHTS OF ACTION; RETALIATION PROHIBITED; ATTORNEY'S
53.10FEES.
53.11(a) In addition to any other rights to recover damages, attorney's fees, costs or
expenses,
53.12whether authorized by this chapter or otherwise, if a declarant, an association, or
any other
53.13person violates any provision of this chapter, or any provision of the declaration,
bylaws,
53.14or rules and regulations any person or class of persons adversely affected by the
failure to
53.15comply has a claim for appropriate relief. Subject to the requirements of section
515B.3-102,
53.16the association shall have standing to pursue claims on behalf of the unit owners
of two or
53.17more units.
53.18(b) The court may award reasonable attorney's fees and costs of litigation to the
prevailing
53.19party. Punitive damages may be awarded for a willful failure to comply.
53.20(c) As a condition precedent to any construction defect claim, the parties to the
claim
53.21must submit the matter to mediation before a mutually agreeable neutral third party.
For
53.22the purposes of this section, mediation has the meaning given under the General Rules
of
53.23Practice, rule 114.02 (7). If the parties are not able to agree on a neutral third-party mediator
53.24from the roster maintained by the Minnesota Supreme Court, the parties may petition
the
53.25district court in the jurisdiction in which the common interest community is located
to
53.26appoint a mediator. The applicable statute of limitations and statute of repose for
an action
53.27based on breach of a warranty imposed by this section, or any other action in contract,
tort,
53.28or other law for any injury to real or personal property or bodily injury or wrongful
death
53.29arising out of the alleged construction defect, is tolled from the date that any party
makes
53.30a written demand for mediation under this section until the latest of the following:
53.31(1) five business days after mediation is completed; or
53.32(2) 180 days.
54.1Notwithstanding the foregoing, mediation shall not be required prior to commencement
54.2of a construction defect claim if the parties have completed home warranty dispute
resolution
54.3under section
327A.051.
54.4(d) The remedies provided for under this chapter are not exclusive and do not abrogate
54.5any remedies under other statutes or the common law, notwithstanding whether those
54.6remedies are referred to in this chapter.
54.7(e) An association may not retaliate against a unit owner for asserting any right
the unit
54.8owner has under this chapter or other law.
54.9EFFECTIVE DATE.This section is effective January 1, 2026.
54.10 Sec. 18. Laws 2024, chapter 96, article 2, section 13, is amended to read:
54.11 Sec. 13.
EFFECTIVE DATE.
54.12This article is effective August 1,
2025 2026."
54.13Amend the title accordingly
54.14The motion prevailed. #did not prevail. So the amendment was #not adopted.