Common interest group late fee charges limitations provision, association adoption of policies on fines and collection requirement provision, and disclosures requirements provision

A bill for an act

relating to common interest communities; limiting late fee charges; requiring

associations to adopt policies on fines and collection; requiring disclosures;

amending Minnesota Statutes 2024, sections 515B.1-103; 515B.3-102; 515B.3-115;

515B.3-1151; 515B.4-1021; 515B.4-107.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 515B.1-103, is amended to read:

515B.1-103 DEFINITIONS.

In the declaration and bylaws, unless specifically provided otherwise or the context

otherwise requires, and in this chapter:

(1) "Additional real estate" means real estate that may be added to a flexible common

interest community.

(2) "Affiliate of a declarant" means any person who controls, is controlled by, or is under

common control with a declarant.

(A) A person "controls" a declarant if the person (i) is a general partner, officer, director,

or employer of the declarant, (ii) directly or indirectly or acting in concert with one or more

other persons, or through one or more subsidiaries, owns, controls, holds with power to

vote, or holds proxies representing, more than 20 percent of the voting interest in the

declarant, (iii) controls in any manner the election of a majority of the directors of the

declarant, or (iv) has contributed more than 20 percent of the capital of the declarant.

(B) A person "is controlled by" a declarant if the declarant (i) is a general partner, officer,

director, or employer of the person, (ii) directly or indirectly or acting in concert with one

or more other persons, or through one or more subsidiaries, owns, controls, holds with

power to vote, or holds proxies representing, more than 20 percent of the voting interest in

the person, (iii) controls in any manner the election of a majority of the directors of the

person, or (iv) has contributed more than 20 percent of the capital of the person.

(C) Control does not exist if the powers described in this subsection are held solely as

a security interest and have not been exercised.

(3) "Allocated interests" means the following interests allocated to each unit: (i) in a

condominium, the undivided interest in the common elements, the common expense liability,

and votes in the association; (ii) in a cooperative, the common expense liability and the

ownership interest and votes in the association; and (iii) in a planned community, the common

expense liability and votes in the association.

(4) "Association" means the unit owners' association organized under section
515B.3-101
.

(5) "Board" means the body, regardless of name, designated in the articles of

incorporation, bylaws or declaration to act on behalf of the association, or on behalf of a

master association when so identified.

(6) "CIC plat" means a common interest community plat described in section
515B.2-110
.

(7) "Common elements" means all portions of the common interest community other

than the units.

(8) "Common expenses" means expenditures made or liabilities incurred by or on behalf

of the association, or master association when so identified, together with any allocations

to reserves.

(9) "Common expense liability" means the liability for common expenses allocated to

each unit pursuant to section
515B.2-108
.

(10) "Common interest community" or "CIC" means contiguous or noncontiguous real

estate within Minnesota that is subject to an instrument which obligates persons owning a

separately described parcel of the real estate, or occupying a part of the real estate pursuant

to a proprietary lease, by reason of their ownership or occupancy, to pay for (i) real estate

taxes levied against; (ii) insurance premiums payable with respect to; (iii) maintenance of;

or (iv) construction, maintenance, repair or replacement of improvements located on, one

or more parcels or parts of the real estate other than the parcel or part that the person owns

or occupies. Real estate which satisfies the definition of a common interest community is

a common interest community whether or not it is subject to this chapter. Real estate subject

to a master declaration, regardless of when the master declaration was recorded, shall not

collectively constitute a separate common interest community unless so stated in the master

declaration.

(11) "Condominium" means a common interest community in which (i) portions of the

real estate are designated as units, (ii) the remainder of the real estate is designated for

common ownership solely by the owners of the units, and (iii) undivided interests in the

common elements are vested in the unit owners.

(11a) "Construction defect claim" means a civil action or an arbitration proceeding based

on any legal theory including, but not limited to, claims under chapter
327A
for damages,

indemnity, or contribution brought against a development party to assert a claim,

counterclaim, cross-claim, or third-party claim for damages or loss to, or the loss of use of,

real or personal property caused by a defect in the initial design or construction of an

improvement to real property that is part of a common interest community, including an

improvement that is constructed on additional real estate pursuant to section
515B.2-111
.

"Construction defect claim" does not include claims related to subsequent maintenance,

repairs, alterations, or modifications to, or the addition of, improvements that are part of

the common interest community, and that are contracted for by the association or a unit

owner.

(12) "Conversion property" means real estate on which is located a building that at any

time within two years before creation of the common interest community was occupied, in

whole or in part, for (i) residential use or (ii) for residential rental purposes by persons other

than purchasers and persons who occupy with the consent of purchasers.

(13) "Cooperative" means a common interest community in which the real estate is

owned by an association, each of whose members is entitled to a proprietary lease by virtue

of the member's ownership interest in the association.

(14) "Dealer" means a person in the business of selling units for the person's own account.

(15) "Declarant" means:

(i) if the common interest community has been created, (A) any person who has executed

a declaration, or a supplemental declaration or amendment to a declaration adding additional

real estate, except secured parties, a spouse holding only an inchoate interest, persons whose

interests in the real estate will not be transferred to unit owners, or, in the case of a leasehold

common interest community, a lessor who possesses no special declarant rights and who

is not an affiliate of a declarant who possesses special declarant rights, or (B) any person

who reserves, or succeeds under section
515B.3-104
to any special declarant rights;

(ii) any person or persons acting in concert who have offered prior to creation of the

common interest community to transfer their interest in a unit to be created and not previously

transferred; or

(iii) if (A) a unit has been restricted to nonresidential use and sold to a purchaser who

has agreed to modify or waive, in whole or in part, sections
515B.4-101
to
515B.4-118
, and

(B) the restriction expires or is modified or terminated such that residential use of the unit

is permitted, the unit owner at the time the restriction expires or is so modified or terminated

is a declarant with respect to that unit and any improvements subject to use rights by a

purchaser of the unit.

(16) "Declaration" means any instrument, however denominated, that creates a common

interest community.

(16a) "Development party" means an architect, contractor, construction manager,

subcontractor, developer, declarant, engineer, or private inspector performing or furnishing

the design, supervision, inspection, construction, coordination, or observation of the

construction of any improvement to real property that is part of a common interest

community, or any of the person's affiliates, officers, directors, shareholders, members, or

employees.

(17) "Dispose" or "disposition" means a voluntary transfer to a purchaser of any legal

or equitable interest in the common interest community, but the term does not include the

transfer or release of a security interest.

new text begin

(17a) "First mortgage" means:

new text end

new text begin

(i) if there is only one mortgage encumbering title to a unit, that mortgage; or

new text end

new text begin

(ii) if there are multiple mortgages encumbering title to a unit, the mortgage that is first

in priority, whether by operation of applicable law or by a properly recorded agreement.

new text end

new text begin

(17b) "First mortgagee" means the holder of a first mortgage.

new text end

(18) "Flexible common interest community" means a common interest community to

which additional real estate may be added.

new text begin

(18a) "Governing documents" means the declaration, the articles of incorporation, bylaws

and rules and regulations of an association, as amended from time to time.

new text end

(19) "Leasehold common interest community" means a common interest community in

which all or a portion of the real estate is subject to a lease the expiration or termination of

which will terminate the common interest community or reduce its size.

(20) "Limited common element" means a portion of the common elements allocated by

the declaration or by operation of section
515B.2-109
(c) or (d) for the exclusive use of one

or more but fewer than all of the units.

(21) "Master association" means an entity created on or after June 1, 1994, that directly

or indirectly exercises any of the powers set forth in section
515B.3-102
on behalf of one

or more members described in section
515B.2-121
(b), (i), (ii) or (iii), whether or not it also

exercises those powers on behalf of one or more property owners' associations described

in section
515B.2-121
(b)(iv). A person (i) hired by an association to perform maintenance,

repair, accounting, bookkeeping or management services, or (ii) granted authority under an

instrument recorded primarily for the purpose of creating rights or obligations with respect

to utilities, access, drainage, or recreational amenities, is not, solely by reason of that

relationship, a master association.

(22) "Master declaration" means a written instrument, however named, (i) recorded on

or after June 1, 1994, and (ii) complying with section
515B.2-121
, subsection (e).

(23) "Master developer" means a person who is designated in the master declaration as

a master developer or, in the absence of such a designation, the owner or owners of the real

estate subject to the master declaration at the time the master declaration is recorded, except

(i) secured parties and (ii) a spouse holding only an inchoate interest. A master developer

is not a declarant unless the master declaration states that the real estate subject to the master

declaration collectively is or collectively will be a separate common interest community.

(24) "Period of declarant control" means the time period provided for in section

515B.3-103
(c) during which the declarant may appoint and remove officers and directors

of the association.

(25) "Person" means an individual, corporation, limited liability company, partnership,

trustee under a trust, personal representative, guardian, conservator, government,

governmental subdivision or agency, or other legal or commercial entity capable of holding

title to real estate.

(26) "Planned community" means a common interest community that is not a

condominium or a cooperative. A condominium or cooperative may be a part of a planned

community.

(27) "Proprietary lease" means an agreement with a cooperative association whereby a

member of the association is entitled to exclusive possession of a unit in the cooperative.

(28) "Purchaser" means a person, other than a declarant, who by means of a voluntary

transfer acquires a legal or equitable interest in a unit other than (i) a leasehold interest of

less than 20 years, including renewal options, or (ii) a security interest.

(29) "Real estate" means any fee simple, leasehold or other estate or interest in, over,

or under land, including structures, fixtures, and other improvements and interests that by

custom, usage, or law pass with a conveyance of land though not described in the contract

of sale or instrument of conveyance. "Real estate" may include spaces with or without upper

or lower boundaries, or spaces without physical boundaries.

(30) "Residential use" means use as a dwelling, whether primary, secondary or seasonal,

but not (i) transient use such as hotels or motels, (ii) use for residential rental purposes if

the individual dwellings are not separate units or if the individual dwellings are not located

on separate parcels of real estate. For purposes of this chapter, a unit is restricted to

nonresidential use if the unit is subject to a restriction that prohibits residential use as defined

in this section whether or not the restriction also prohibits the uses described in this paragraph.

(31) "Secured party" means the person owning a security interest as defined in paragraph

(32).

(32) "Security interest" means a perfected interest in real estate or personal property,

created by contract or conveyance, which secures payment or performance of an obligation.

The term includes a mortgagee's interest in a mortgage, a vendor's interest in a contract for

deed, a lessor's interest in a lease intended as security, a holder's interest in a sheriff's

certificate of sale during the period of redemption, an assignee's interest in an assignment

of leases or rents intended as security, in a cooperative, a lender's interest in a member's

ownership interest in the association, a pledgee's interest in the pledge of an ownership

interest, or any other interest intended as security for an obligation under a written agreement.

(33a) This definition of special declarant rights applies only to common interest

communities created before August 1, 2010. "Special declarant rights" means rights reserved

in the declaration for the benefit of a declarant to:

(i) complete improvements indicated on the CIC plat, planned by the declarant consistent

with the disclosure statement or authorized by the municipality in which the CIC is located;

(ii) add additional real estate to a common interest community;

(iii) subdivide or combine units, or convert units into common elements, limited common

elements, or units;

(iv) maintain sales offices, management offices, signs advertising the common interest

community, and models;

(v) use easements through the common elements for the purpose of making improvements

within the common interest community or any additional real estate;

(vi) create a master association and provide for the exercise of authority by the master

association over the common interest community or its unit owners;

(vii) merge or consolidate a common interest community with another common interest

community of the same form of ownership; or

(viii) appoint or remove any officer or director of the association, or the master association

where applicable, during any period of declarant control.

(33b) This definition of special declarant rights applies only to common interest

communities created on or after August 1, 2010. "Special declarant rights" means rights

reserved in the declaration for the benefit of a declarant and expressly identified in the

declaration as special declarant rights. Such special declarant rights may include but are not

limited to the following:

(i) to complete improvements indicated on the CIC plat, planned by the declarant

consistent with the disclosure statement or authorized by the municipality in which the

common interest community is located, and to have and use easements for itself and its

employees, agents, and contractors through the common elements for such purposes;

(ii) to add additional real estate to a common interest community;

(iii) to subdivide or combine units, or convert units into common elements, limited

common elements and/or units, pursuant to section
515B.2-112
;

(iv) to maintain and use sales offices, management offices, signs advertising the common

interest community, and models, and to have and use easements for itself and its employees,

agents, and invitees through the common elements for such purposes;

(v) to appoint or remove any officer or director of the association during any period of

declarant control;

(vi) to utilize an alternate common expense plan as provided in section
515B.3-115
(a)(2);

(vii) to grant common element licenses as provided in section
515B.2-109
(e); or

(viii) to review, and approve or disapprove, the exterior design, materials, size, site

location, and other exterior features of buildings and other structures, landscaping and other

exterior improvements, located within the common interest community, and any

modifications or alterations thereto.

Special declarant rights shall not be reserved or utilized for the purpose of evading any

limitation or obligation imposed on declarants by this chapter.

(34) "Time share" means a right to occupy a unit or any of several units during three or

more separate time periods over a period of at least three years, including renewal options,

whether or not coupled with a fee title interest in the common interest community or a

specified portion thereof.

(35) "Unit" means a portion of a common interest community the boundaries of which

are described in the common interest community's declaration and which is intended for

separate ownership, or separate occupancy pursuant to a proprietary lease.

(36) "Unit identifier" means English letters or Arabic numerals, or a combination thereof,

which identify only one unit in a common interest community and which meet the

requirements of section
515B.2-104
.

(37) "Unit owner" means a declarant or other person who owns a unit, a lessee under a

proprietary lease, or a lessee of a unit in a leasehold common interest community whose

lease expires simultaneously with any lease the expiration or termination of which will

remove the unit from the common interest community, but does not include a secured party.

In a common interest community, the declarant is the unit owner of a unit until that unit has

been conveyed to another person.

Sec. 2.

Minnesota Statutes 2024, section 515B.3-102, is amended to read:

515B.3-102 POWERS OF UNIT OWNERS' ASSOCIATION.

(a) Except as provided in subsections (b), (c), (d), (e), and (f) and subject to the provisions

of the declaration or bylaws, the association shall have the power to:

(1) adopt, amend and revoke rules and regulations not inconsistent with the articles of

incorporation, bylaws and declaration, as follows: (i) regulating the use of the common

elements; (ii) regulating the use of the units, and conduct of unit occupants, which may

jeopardize the health, safety or welfare of other occupants, which involves noise or other

disturbing activity, or which may damage the common elements or other units; (iii) regulating

or prohibiting animals; (iv) regulating changes in the appearance of the common elements

and conduct which may damage the common interest community; (v) regulating the exterior

appearance of the common interest community, including, for example, balconies and patios,

window treatments, and signs and other displays, regardless of whether inside a unit; (vi)

implementing the articles of incorporation, declaration and bylaws, and exercising the

powers granted by this section; and (vii) otherwise facilitating the operation of the common

interest community;

(2) adopt and amend budgets for revenues, expenditures and reserves, and levy and

collect assessments for common expenses from unit owners;

(3) hire and discharge managing agents and other employees, agents, and independent

contractors;

(4) institute, defend, or intervene in litigation or administrative proceedings (i) in its

own name on behalf of itself or two or more unit owners on matters affecting the common

elements or other matters affecting the common interest community or, (ii) with the consent

of the owners of the affected units on matters affecting only those units;

(5) make contracts and incur liabilities;

(6) regulate the use, maintenance, repair, replacement, and modification of the common

elements and the units;

(7) cause improvements to be made as a part of the common elements, and, in the case

of a cooperative, the units;

(8) acquire, hold, encumber, and convey in its own name any right, title, or interest to

real estate or personal property, but (i) common elements in a condominium or planned

community may be conveyed or subjected to a security interest only pursuant to section

515B.3-112
, or (ii) part of a cooperative may be conveyed, or all or part of a cooperative

may be subjected to a security interest, only pursuant to section
515B.3-112
;

(9) grant or amend easements for public utilities, public rights-of-way or other public

purposes, and cable television or other communications, through, over or under the common

elements; grant or amend easements, leases, or licenses to unit owners for purposes authorized

by the declaration; and, subject to approval by a vote of unit owners other than declarant

or its affiliates, grant or amend other easements, leases, and licenses through, over or under

the common elements;

(10) impose and receive any payments, fees, or charges for the use, rental, or operation

of the common elements, other than limited common elements, and for services provided

to unit owners;

(11)
new text begin
(i)
new text end
impose
deleted text begin
interest and
deleted text end
late charges for late payment of assessments
new text begin
, except that an

association may not impose a late fee in excess of 15 percent of the amount of any installment

of assessments, unless otherwise provided for in the declaration;
new text end
and
deleted text begin
,
deleted text end

new text begin

(ii)
new text end
after notice and an opportunity to be heard before the board or a committee appointed

by it, levy reasonable fines for violations of the declaration, bylaws, and rules and regulations

of the association, provided that
new text begin
if a hearing is requested by a unit owner,
new text end
attorney fees and

costs
deleted text begin
must not be charged or collected from a unit owner who disputes a fine or assessment

and, if after the homeowner requests a hearing and a
deleted text end
new text begin
incurred related to the violation may

not be assessed to the responsible unit or charged to an owner until after the
new text end
hearing is held

by the board or a committee of the board,
new text begin
and
new text end
the board
deleted text begin
does not adopt
deleted text end
new text begin
or committee adopts
new text end

a resolution levying the fine or upholding the assessment against the unit owner or owner's

unit;

(12) impose reasonable charges for the review, preparation and recordation of

amendments to the declaration, resale certificates required by section
515B.4-107
, statements

of unpaid assessments, or furnishing copies of association records;

(13) provide for the indemnification of its officers and directors, and maintain directors'

and officers' liability insurance;

(14) provide for reasonable procedures governing the conduct of meetings and election

of directors;

(15) exercise any other powers conferred by law, or by the declaration, articles of

incorporation or bylaws; and

(16) exercise any other powers necessary and proper for the governance and operation

of the association.

(b) Notwithstanding subsection (a) the declaration or bylaws may not impose limitations

on the power of the association to deal with the declarant which are more restrictive than

the limitations imposed on the power of the association to deal with other persons.

(c)
new text begin
An association must adopt and provide to every unit owner a policy regarding fines

that includes a representative list of violations for which a fine may be imposed, a schedule

of fine amounts, and an explanation of the remedies available to the association in the event

of a violation. The association must provide the policy regarding fines to prospective

purchasers in accordance with section 515B.4-107(a)(1).
new text end
An association that levies a fine

pursuant to subsection (a)(11), or an assessment pursuant to section
515B.3-115
(g), or

515B.3-1151
(g), must provide a dated, written notice to a unit owner that:

(1) states the amount and reason for the fine or assessment;

(2) for fines levied under section
515B.3-102
(a)(11), specifies: (i) the violation for which

a fine is being levied and the date of the levy; and (ii) the specific section of the declaration,

bylaws, rules, or regulations allegedly violated;

(3) for assessments levied under section
515B.3-115
(g) or
515B.3-1151
(g), identifies:

(i) the damage caused; and (ii) the act or omission alleged to have caused the damage;

(4) states that all unpaid fines and assessments are liens which, if not satisfied, could

lead to foreclosure of the lien against the owner's unit;

(5) describes the unit owner's right to be heard by the board or a committee appointed

by the board;

(6) states that if the assessment, fine, late fees, and other allowable charges are not paid,

the amount may increase as a result of the imposition of attorney fees and other collection

costs; and

(7) informs the unit owner that homeownership assistance is available from the Minnesota

Homeownership Center.

(d) Notwithstanding subsection (a), powers exercised under this section must comply

with sections
500.215
,
500.216
, and
500.217
.

(e) Notwithstanding subsection (a)(4) or any other provision of this chapter, the

association, before instituting litigation or arbitration involving construction defect claims

against a development party, shall:

(1) mail or deliver written notice of the anticipated commencement of the action to each

unit owner at the addresses, if any, established for notices to owners in the declaration and,

if the declaration does not state how notices are to be given to owners, to the owner's last

known address. The notice shall specify the nature of the construction defect claims to be

alleged, the relief sought, and the manner in which the association proposes to fund the cost

of pursuing the construction defect claims; and

(2) obtain the approval of owners of units to which a majority of the total votes in the

association are allocated. Votes allocated to units owned by the declarant, an affiliate of the

declarant, or a mortgagee who obtained ownership of the unit through a foreclosure sale

are excluded. The association may obtain the required approval by a vote at an annual or

special meeting of the members or, if authorized by the statute under which the association

is created and taken in compliance with that statute, by a vote of the members taken by

electronic means or mailed ballots. If the association holds a meeting and voting by electronic

means or mailed ballots is authorized by that statute, the association shall also provide for

voting by those methods. Section
515B.3-110
(c) applies to votes taken by electronic means

or mailed ballots, except that the votes must be used in combination with the vote taken at

a meeting and are not in lieu of holding a meeting, if a meeting is held, and are considered

for purposes of determining whether a quorum was present. Proxies may not be used for a

vote taken under this paragraph unless the unit owner executes the proxy after receipt of

the notice required under subsection (e)(1) and the proxy expressly references this notice.

(f) The association may intervene in a litigation or arbitration involving a construction

defect claim or assert a construction defect claim as a counterclaim, crossclaim, or third-party

claim before complying with subsections (e)(1) and (e)(2) but the association's complaint

in an intervention, counterclaim, crossclaim, or third-party claim shall be dismissed without

prejudice unless the association has complied with the requirements of subsection (e) within

90 days of the association's commencement of the complaint in an intervention or the

assertion of the counterclaim, crossclaim, or third-party claim.

Sec. 3.

Minnesota Statutes 2024, section 515B.3-115, is amended to read:

515B.3-115 ASSESSMENTS FOR COMMON EXPENSES; CIC CREATED

BEFORE AUGUST 1, 2010.

(a) The obligation of a unit owner to pay common expense assessments shall be as

follows:

(1) If a common expense assessment has not been levied, the declarant shall pay all

operating expenses of the common interest community, and shall fund the replacement

reserve component of the common expenses as required by subsection (b).

(2) If a common expense assessment has been levied, all unit owners, including the

declarant, shall pay the assessments allocated to their units, subject to the following:

(i) If the declaration so provides, a declarant's liability, and the assessment lien, for the

common expense assessments, exclusive of replacement reserves, on any unit owned by

the declarant may be limited to 25 percent or more of any assessment, exclusive of

replacement reserves, until the unit or any building located in the unit is substantially

completed. Substantial completion shall be evidenced by a certificate of occupancy in any

jurisdiction that issues the certificate.

(ii) If the declaration provides for a reduced assessment pursuant to paragraph (2)(i),

the declarant shall be obligated, within 60 days following the termination of the period of

declarant control, to make up any operating deficit incurred by the association during the

period of declarant control. The existence and amount, if any, of the operating deficit shall

be determined using the accrual basis of accounting applied as of the date of termination

of the period of declarant control, regardless of the accounting methodology previously

used by the association to maintain its accounts.

(b) The replacement reserve component of the common expenses shall be funded for

each unit in accordance with the projected annual budget required by section

515B.4-102
(a)(23) provided that the funding of replacement reserves with respect to a unit

shall commence no later than the date that the unit or any building located within the unit

boundaries is substantially completed. Substantial completion shall be evidenced by a

certificate of occupancy in any jurisdiction that issues the certificate.

(c) After an assessment has been levied by the association, assessments shall be levied

at least annually, based upon a budget approved at least annually by the association.

(d) Except as modified by subsections (a)(1) and (2), (e), (f), and (g), all common

expenses shall be assessed against all the units in accordance with the allocations established

by the declaration pursuant to section
515B.2-108
.

(e) Unless otherwise required by the declaration:

(1) any common expense associated with the maintenance, repair, or replacement of a

limited common element shall be assessed against the units to which that limited common

element is assigned, equally, or in any other proportion the declaration provides;

(2) any common expense or portion thereof benefiting fewer than all of the units may

be assessed exclusively against the units benefited, equally, or in any other proportion the

declaration provides;

(3) the costs of insurance may be assessed in proportion to risk or coverage, and the

costs of utilities may be assessed in proportion to usage;

(4) subject to section
515B.3-102
(a)(11), reasonable attorney fees and costs incurred by

the association in connection with (i) the collection of assessments against a unit owner,

and (ii) the enforcement of this chapter, the articles, bylaws, declaration, or rules and

regulations against a unit owner, may be assessed against the unit owner's unit subject to

section
515B.3-116
(h); and

(5) fees, charges, late charges, fines and interest may be assessed as provided in section

515B.3-116
(a).

(f) Assessments levied under section
515B.3-116
to pay a judgment against the association

may be levied only against the units in the common interest community at the time the

judgment was entered, in proportion to their common expense liabilities.

(g) If any damage to the common elements or another unit is caused by the act or omission

of any unit owner, or occupant of a unit, or their invitees, the association may assess the

costs of repairing the damage exclusively against the unit owner's unit to the extent not

covered by insurance.

(h) Subject to any shorter period specified by the declaration or bylaws, if any installment

of an assessment becomes more than 60 days past due, then the association may, upon ten

days' written notice to the unit owner, declare the entire amount of the assessment

immediately due and payable in full, except that any portion of the assessment that represents

installments that are not due and payable without acceleration as of the date of reinstatement

must not be included in the amount that a unit owner must pay to reinstate under section

580.30
or chapter 581.

(i) If common expense liabilities are reallocated for any purpose authorized by this

chapter, common expense assessments and any installment thereof not yet due shall be

recalculated in accordance with the reallocated common expense liabilities.

(j) An assessment against fewer than all of the units must be levied within three years

after the event or circumstances forming the basis for the assessment, or shall be barred.

new text begin

(k) An association must adopt a collection policy and provide a copy to all unit owners

and prospective purchasers as required pursuant to section 515B.4-107(a)(1). A collection

policy must provide at a minimum:

new text end

new text begin

(1) three separate notifications to a unit owner before the account is referred to a law

firm or collection agency for collections, including at least one notification sent by certified

mail to the unit owner's registered address; and

new text end

new text begin

(2) require any law firm engaged to foreclose an association's lien for assessments to

send the preforeclosure notice required to be provided pursuant to section 580.022 by United

States mail and certified mail.

new text end

deleted text begin

(k)
deleted text end
new text begin
(l)
new text end
This section applies only to common interest communities created before August

1, 2010.

Sec. 4.

Minnesota Statutes 2024, section 515B.3-1151, is amended to read:

515B.3-1151 ASSESSMENTS FOR COMMON EXPENSES; CIC CREATED ON

OR AFTER AUGUST 1, 2010.

(a) The association shall approve an annual budget of common expenses at or prior to

the conveyance of the first unit in the common interest community to a purchaser and

annually thereafter. The annual budget shall include all customary and necessary operating

expenses and replacement reserves for the common interest community, consistent with

this section and section
515B.3-114
. For purposes of replacement reserves under subsection

(b), until an annual budget has been approved, the reserves shall be paid based upon the

budget contained in the disclosure statement required by section
515B.4-102
. The obligation

of a unit owner to pay common expenses shall be as follows:

(1) If a common expense assessment has not been levied by the association, the declarant

shall pay all common expenses of the common interest community, including the payment

of the replacement reserve component of the common expenses for all units in compliance

with subsection (b).

(2) If a common expense assessment has been levied by the association, all unit owners,

including the declarant, shall pay the assessments levied against their units, except as follows:

(i) The declaration may provide for an alternate common expense plan whereby the

declarant's common expense liability, and the corresponding assessment lien against the

units owned by the declarant, is limited to: (A) paying when due, in compliance with

subsection (b), an amount equal to the full share of the replacement reserves allocated to

units owned by the declarant, as set forth in the association's annual budget approved as

provided in this subsection; and (B) paying when due all accrued expenses of the common

interest community in excess of the aggregate assessments payable with respect to units

owned by persons other than a declarant; provided, that the alternate common expense plan

shall not affect a declarant's obligation to make up any operating deficit pursuant to item

(iv), and shall terminate upon the termination of any period of declarant control unless

terminated earlier pursuant to item (iii).

(ii) The alternate common expense plan may be authorized only by including in the

declaration and the disclosure statement required by section
515B.4-102
provisions

authorizing and disclosing the alternate common expense plan as described in item (i), and

including in the disclosure statement either (A) a statement that the alternate common

expense plan will have no effect on the level of services or amenities anticipated by the

association's budget contained in the disclosure statement, or (B) a statement describing

how the services or amenities may be affected.

(iii) A declarant shall give notice to the association of its intent to utilize the alternate

common expense plan and a commencement date after the date the notice is given. The

alternate common expense plan shall be valid only for periods after the notice is given. A

declarant may terminate its right to utilize the alternate common expense plan prior to the

termination of the period of declarant control only by giving notice to the association and

the unit owners at least 30 days prior to a selected termination date set forth in the notice.

(iv) If a declarant utilizes an alternate common expense plan, that declarant shall cause

to be prepared and delivered to the association, at the declarant's expense, within 90 days

after the termination of the period of declarant control, an audited balance sheet and profit

and loss statement certified to the association and prepared by an accountant having the

qualifications set forth in section
515B.3-121
(b). The audit shall be binding on the declarant

and the association.

(v) If the audited profit and loss statement shows an accumulated operating deficit, the

declarant shall be obligated to make up the deficit within 15 days after delivery of the audit

to the association, and the association shall have a claim against the declarant for an amount

equal to the deficit until paid. A declarant who does not utilize an alternate common expense

plan is not liable to make up any operating deficit. If more than one declarant utilizes an

alternate common expense plan, all declarants who utilize the plan are jointly and severally

liable to the association for any operating deficit.

(vi) The existence and amount, if any, of the operating deficit shall be determined using

the accrual method of accounting applied as of the date of termination of the period of

declarant control, regardless of the accounting methodology previously used by the

association to maintain its accounts.

(vii) Unless approved by a vote of the unit owners other than the declarant and its

affiliates, the operating deficit shall not be made up, prior to the election by the unit owners

of a board of directors pursuant to section
515B.3-103
(d), through the use of a special

assessment described in subsection (c) or by assessments described in subsections (e), (f),

and (g).

(viii) The use by a declarant of an alternate common expense plan shall not affect the

obligations of the declarant or the association as provided in the declaration, the bylaws, or

this chapter, or as represented in the disclosure statement required by section
515B.4-102
,

except as to matters authorized by this chapter.

(b) The replacement reserves required by section
515B.3-114
shall be paid to the

association by each unit owner for each unit owned by that unit owner in accordance with

the association's annual budget approved pursuant to subsection (a), regardless of whether

an annual assessment has been levied or whether the declarant has utilized an alternate

common expense plan under subsection (a)(2). Replacement reserves shall be paid with

respect to a unit commencing as of the later of (1) the date of creation of the common interest

community or (2) the date that the structure and exterior of the building containing the unit,

or the structure and exterior of any building located within the unit boundaries, but excluding

the interior finishing of the structure itself, are substantially completed. If the association

has not approved an annual budget as of the commencement date for the payment of

replacement reserves, then the reserves shall be paid based upon the budget contained in

the disclosure statement required by section
515B.4-102
.

(c) After an assessment has been levied by the association, assessments shall be levied

at least annually, based upon an annual budget approved by the association. In addition to

and not in lieu of annual assessments, an association may, if so provided in the declaration,

levy special assessments against all units in the common interest community based upon

the same formula required by the declaration for levying annual assessments. Special

assessments may be levied only (1) to cover expenditures of an emergency nature, (2) to

replenish underfunded replacement reserves, (3) to cover unbudgeted capital expenditures

or operating expenses, or (4) to replace certain components of the common interest

community described in section
515B.3-114
(a), if such alternative method of funding is

approved under section
515B.3-114
(a)(5). The association may also levy assessments against

fewer than all units as provided in subsections (e), (f), and (g). An assessment under

subsection (e)(2) for replacement reserves is subject to the requirements of section

515B.3-1141
(a)(5).

(d) Except as modified by subsections (a), clauses (1) and (2), (e), (f), and (g), all common

expenses shall be assessed against all the units in accordance with the allocations established

by the declaration pursuant to section
515B.2-108
.

(e) Unless otherwise required by the declaration:

(1) any common expense associated with the maintenance, repair, or replacement of a

limited common element shall be assessed against the units to which that limited common

element is assigned, equally, or in any other proportion the declaration provides;

(2) any common expense or portion thereof benefiting fewer than all of the units may

be assessed exclusively against the units benefited, equally, or in any other proportion the

declaration provides;

(3) the costs of insurance may be assessed in proportion to risk or coverage, and the

costs of utilities may be assessed in proportion to usage;

(4) subject to section
515B.3-102
(a)(11), reasonable attorney fees and costs incurred by

the association in connection with (i) the collection of assessments, and (ii) the enforcement

of this chapter, the articles, bylaws, declaration, or rules and regulations, against a unit

owner, may be assessed against the unit owner's unit, subject to section
515B.3-116
(h); and

(5) fees, charges, late charges, fines, and interest may be assessed as provided in section

515B.3-116
(a).

(f) Assessments levied under section
515B.3-116
to pay a judgment against the association

may be levied only against the units in the common interest community at the time the

judgment was entered, in proportion to their common expense liabilities.

(g) If any damage to the common elements or another unit is caused by the act or omission

of any unit owner, or occupant of a unit, or their invitees, the association may assess the

costs of repairing the damage exclusively against the unit owner's unit to the extent not

covered by insurance.

(h) Subject to any shorter period specified by the declaration or bylaws, if any installment

of an assessment becomes more than 60 days past due, then the association may, upon ten

days' written notice to the unit owner, declare the entire amount of the assessment

immediately due and payable in full, except that any portion of the assessment that represents

installments that are not due and payable without acceleration as of the date of reinstatement

must not be included in the amount that a unit owner must pay to reinstate under section

580.30
or chapter 581.

(i) If common expense liabilities are reallocated for any purpose authorized by this

chapter, common expense assessments and any installment thereof not yet due shall be

recalculated in accordance with the reallocated common expense liabilities.

(j) An assessment against fewer than all of the units must be levied within three years

after the event or circumstances forming the basis for the assessment, or shall be barred.

new text begin

(k) An association must adopt a collection policy and provide a copy to all unit owners

and prospective purchasers as required pursuant to section 515B.4-107(a)(1). A collection

policy must provide at a minimum:

new text end

new text begin

(1) three separate notifications to a unit owner before the account is referred to a law

firm or collection agency for collections, including at least one notification sent by certified

mail to the unit owner's registered address; and

new text end

new text begin

(2) require any law firm engaged to foreclose an association's lien for assessments to

send the preforeclosure notice required to be provided pursuant to section 580.022 by United

States mail and certified mail.

new text end

deleted text begin

(k)
deleted text end
new text begin
(l)
new text end
This section applies only to common interest communities created on or after

August 1, 2010.

Sec. 5.

Minnesota Statutes 2024, section 515B.4-1021, is amended to read:

515B.4-1021 DISCLOSURE STATEMENT; GENERAL PROVISIONS; CIC

CREATED ON OR AFTER AUGUST 1, 2010.

(a) A disclosure statement shall fully and accurately disclose:

(1) the name and, if available, the number of the common interest community;

(2) the name and principal address of each declarant holding any special declarant rights;

a description of the special declarant rights held by each declarant; a description of the units

or additional real estate to which the respective special declarant rights apply; and a copy

of any recorded transfer of special declarant rights pursuant to section
515B.3-104
(a), or

any instrument recorded pursuant to section
515B.3-104
(b), (g), or (h);

(3) the total number of units which all declarants have the right to include in the common

interest community and a statement that the common interest community is either a

condominium, cooperative, or planned community;

(4) a general description of the common interest community, including, at a minimum,

(i) the number of buildings, (ii) the number of dwellings per building, (iii) the type of

construction, (iv) whether the common interest community involves new construction or

rehabilitation, (v) whether any building was wholly or partially occupied, for any purpose,

before it was added to the common interest community, and the nature of the occupancy,

(vi) a general description of any roads, trails, or utilities that are located on the common

elements and that the association or master association will be required to maintain, (vii) a

description of any declarant licensing rights under section
515B.2-109
(e), and (viii) the

initial maintenance plan, initial maintenance schedule, and maintenance budget under section

515B.3-107
(b). The initial maintenance plan prepared by the declarant must be based on

the best available information listing all building elements to which the plan will apply and

the generally accepted standards of maintenance on which the plan is based. The initial plan

must be dated and signed by the declarant and be fully funded by the initial budget provided

by the declarant;

(5) declarant's schedule of commencement and completion of construction of any

buildings and other improvements that the declarant is obligated to build pursuant to section

515B.4-117
;

(6) any expenses or services, not reflected in the budget, that the declarant pays or

provides, which may become a common expense; the projected common expense attributable

to each of those expenses or services; a description of any alternate common expense plan

under section
515B.3-115
(a)(2)(i); and, if the declaration provides for an alternate common

expense plan, either (i) a statement that the alternate common expense plan will have no

effect on the level of services or amenities anticipated by the association's budget or disclosed

in the disclosure statement, or (ii) a statement describing how the services or amenities may

be affected;

(7) any initial or special fee due from the purchaser to the declarant or the association

at closing, together with a description of the purpose and method of calculating the fee;

(8) identification of any liens, defects, or encumbrances which will continue to affect

the title to a unit or to any real property owned by the association after the contemplated

conveyance;

(9) a description of any financing offered or arranged by the declarant;

(10) a statement as to whether application has been made for any project approvals for

the common interest community from the Federal National Mortgage Association (FNMA),

Federal Home Loan Mortgage Corporation (FHLMC), Department of Housing and Urban

Development (HUD), or Department of Veterans Affairs (VA), and which, if any, such

final approvals have been received;

(11) the terms of any warranties provided by the declarant, including copies of sections

515B.4-112
to
515B.4-115
, and any other applicable statutory warranties, and a statement

of any limitations on the enforcement of the applicable warranties or on damages;

(12) a statement that:

(i) within ten days after the receipt of a disclosure statement, a purchaser may cancel

any contract for the purchase of a unit from a declarant; provided, that the right to cancel

terminates upon the purchaser's voluntary acceptance of a conveyance of the unit from the

declarant or by the purchaser agreeing to modify or waive the right to cancel in the manner

provided by section
515B.4-106
(a);

(ii) if a purchaser receives a disclosure statement more than ten days before signing a

purchase agreement, the purchaser cannot cancel the purchase agreement; and

(iii) if a declarant obligated to deliver a disclosure statement fails to deliver a disclosure

statement which substantially complies with this chapter to a purchaser to whom a unit is

conveyed, the declarant shall be liable to the purchaser as provided in section
515B.4-106
(d);

(13) a statement disclosing to the extent of the declarant's or an affiliate of a declarant's

actual knowledge, after reasonable inquiry, any unsatisfied judgments or lawsuits to which

the association is a party, and the status of those lawsuits which are material to the common

interest community or the unit being purchased;

(14) a statement (i) describing the conditions under which earnest money will be held

in and disbursed from the escrow account, as set forth in section
515B.4-109
, (ii) that the

earnest money will be returned to the purchaser if the purchaser cancels the contract pursuant

to section
515B.4-106
, and (iii) setting forth the name and address of the escrow agent;

(15) a detailed description of the insurance coverage provided by the association for the

benefit of unit owners, including a statement as to which, if any, of the items referred to in

section
515B.3-113
(b), are insured by the association
deleted text begin
;
deleted text end
new text begin
. The description of insurance must

identify the association's deductible amounts for property damage, including wind and hail

claims, that may be assessed to a unit as a loss assessment. All descriptions of insurance

must contain the following statement:
new text end

new text begin

"The unit owner, at the time a loss assessment is due is personally liable for payment of

a loss assessment. The deductible and potential loss assessment amount is subject to change

each year when the association purchases new insurance. It is recommended that each unit

owner personally purchase insurance coverage for loss assessments in the amount of the

association's deductible. IF THE ASSOCIATION ASSESSES A LOSS ASSESSMENT,

THE UNIT OWNER IS PERSONALLY RESPONSIBLE FOR PAYING IT, EVEN IF

THE UNIT OWNER DOES NOT HAVE APPROPRIATE INSURANCE COVERAGE.";

new text end

(16) any current or expected fees or charges, other than assessments for common

expenses, to be paid by unit owners for the use of the common elements or any other

improvements or facilities;

(17) the financial arrangements, including any contingencies, which have been made to

provide for completion of all improvements that the declarant is obligated to build pursuant

to section
515B.4-118
, or a statement that no such arrangements have been made;

(18) in a cooperative:

(i) whether the unit owners will be entitled, for federal and state tax purposes, to deduct

payments made by the association for real estate taxes and interest paid to the holder of a

security interest encumbering the cooperative;

(ii) a statement as to the effect on the unit owners if the association fails to pay real estate

taxes or payments due the holder of a security interest encumbering the cooperative; and

(iii) the principal amount and a general description of the terms of any blanket mortgage,

contract for deed, or other blanket security instrument encumbering the cooperative property;

(19) a statement:

(i) that real estate taxes for the unit or any real property owned by the association are

not delinquent or, if there are delinquent real estate taxes, describing the property for which

the taxes are delinquent, stating the amount of the delinquent taxes, interest, and penalties,

and stating the years for which taxes are delinquent; and

(ii) setting forth the amount of real estate taxes, including the amount of any special

assessment certified for payment with the real estate taxes, due and payable with respect to

the unit in the year in which the disclosure statement is given, if real estate taxes have been

separately assessed against the unit;

(20) if the unit or other parcel of real estate being purchased is or may be subject to a

master declaration at the time of the conveyance from the declarant to the purchaser, a

statement to that effect, and all of the following information with respect to the master

association:

(i) copies of the following documents (which may be in proposed form if the master

declaration has not been recorded): the master declaration, the articles of incorporation,

bylaws, and rules and regulations for the master association, together with any amendments

thereto;

(ii) the name and address of the master developer, and the name, address, and general

description of the master association, including a general description of any other association,

unit owners, or other persons which are or may become members;

(iii) a description of any nonresidential use permitted on any property subject to the

master declaration;

(iv) a statement as to the estimated maximum number of associations, unit owners, or

other persons which may become members of the master association, and a description of

any period of control of the master association and rights to appoint master association

directors by a master developer or other person pursuant to section
515B.2-121
(c);

(v) a description of any facilities intended for the benefit of the members of the master

association and not located on property owned or controlled by a member of the master

association;

(vi) the financial arrangements, including any contingencies, which have been made to

provide for completion of the facilities referred to in subsection (v), or a statement that no

arrangements have been made;

(vii) any current balance sheet of the master association and a projected or current annual

budget, as applicable, which budget shall include with respect to the master association

those items in paragraph (23), clauses (i) through (iii), and the projected monthly or other

periodic common expense assessment payment for each type of unit, lot, or other parcel of

real estate which is or is planned to be subject to assessment;

(viii) a description of any expenses or services not reflected in the budget, paid for or

provided by a master developer or another person executing the master declaration, which

may become an expense of the master association in the future;

(ix) a description of any powers delegated to and accepted by the master association

pursuant to section
515B.2-121
(e)(2);

(x) identification of any liens, defects, or encumbrances that will continue to affect title

to property owned or operated by the master association for the benefit of its members;

(xi) the terms of any warranties provided by any person for construction of facilities in

which the members of the master association have or may have an interest, and any known

defects in the facilities which would violate the standards described in section

515B.4-113
(b)(2);

(xii) a statement disclosing, after inquiry of the master association, any unsatisfied

judgments or lawsuits to which the master association is a party, and the status of those

lawsuits which are material to the master association;

(xiii) a description of any insurance coverage provided for the benefit of its members

by the master association
deleted text begin
; and
deleted text end
new text begin
. The description of insurance must identify the master

association's deductible amounts for property damage, including wind and hail claims, that

may be assessed to a unit as a loss assessment. All descriptions of insurance must contain

the following statement:
new text end

new text begin

"The unit owner, at the time a loss assessment is due is personally liable for payment of

a loss assessment. The deductible and potential loss assessment amount is subject to change

each year when the association purchases new insurance. It is recommended that each unit

owner personally purchase insurance coverage for loss assessments in the amount of the

association's deductible. IF THE ASSOCIATION ASSESSES A LOSS ASSESSMENT,

THE UNIT OWNER IS PERSONALLY RESPONSIBLE FOR PAYING IT, EVEN IF

THE UNIT OWNER DOES NOT HAVE APPROPRIATE INSURANCE COVERAGE.";

and

new text end

(xiv) any current or expected fees or charges, other than assessments by the master

association, to be paid by members of the master association for the use of any facilities

intended for the benefit of the members;

(21) a statement as to whether the unit will be substantially completed at the time of

conveyance to a purchaser, and, if not substantially completed, who is responsible to complete

and pay for the construction of the unit;

(22) copies of the following documents (which may be in proposed form if the declaration

has not been recorded): the declaration and any supplemental declaration, and any

amendments thereto (exclusive of the CIC plat); any other recorded covenants, conditions,

restrictions, and reservations affecting the common interest community; the articles of

incorporation, bylaws, and any rules or regulations of the association; the names of the

current members of the association's board of directors; any agreement excluding or

modifying any implied warranties; any agreement reducing the statute of limitations for the

enforcement of warranties; any contracts or leases to be signed by the purchaser at closing;

and a description of any material contracts, leases, or other agreements affecting the common

interest community;
deleted text begin
and
deleted text end

(23) a balance sheet for the association, following the creation of the association, current

within 90 days; a projected annual budget for the association; and a statement identifying

the party responsible for the preparation of the budget. The budget shall assume that all

units intended to be included in the common interest community, based upon the declarant's

good faith estimate, have been subjected to the declaration; provided, that additional budget

portrayals based upon a lesser number of units are permitted. The budget shall include,

without limitation:

(i) a statement of the amount included in the budget as a reserve for replacement, the

components of the common interest community for which the reserves are budgeted, and

the amounts of the reserves, if any, that are allocated for the replacement of each of those

components;

(ii) a statement of any other reserves;

(iii) the projected common expense for each category of expenditures for the association;

(iv) the projected monthly common expense assessment for each type of unit;

(v) a statement as to the components of the common interest community whose

replacement will be funded by assessments under section
515B.3-115
(c) or (e), rather than

by replacement reserves as approved pursuant to section
515B.3-114
(a). If, based upon the

association's then-current budget, the monthly common expense assessment for the unit at

the time of conveyance to the purchaser is anticipated to exceed the monthly assessment

stated in the budget, a statement to such effect shall be included
deleted text begin
.
deleted text end
new text begin
; and
new text end

new text begin

(vi) a copy of any reserve study or any other reports or estimates utilized by the declarant

in providing the information required by section 515B.4-102(a)(23);

new text end

new text begin

(24) the schedules of fines and allowable remedies required under section 515B.3-102

and the collection policy adopted by the association under section 515B.3-115(k) or

515B.3-1151(k); and

new text end

new text begin

(25) the following statement and acknowledgment for execution by a unit purchaser or

potential unit purchaser:

new text end

new text begin

"By purchasing a unit within a common interest community the undersigned

acknowledges that they understand the legal documents they have been provided in this

disclosure will impact property rights related to the subject property and may impose certain

obligations on them as a unit owner. Governing documents for a common interest community

dictate how decisions will be made related to the property, including financial decisions,

maintenance decisions, and restrictions on the use of the property, which may include, but

not be limited to, restrictions on parking, appearance, noise, smoking, pets, and rentals.

Governing documents may also be modified or changed at any time with the appropriate

approval and any modifications or amendments will apply to existing unit owners. If the

undersigned has questions about the impact on property rights from the governing documents

provided with this disclosure, it is advisable to consult with an attorney."

new text end

(b) A declarant shall promptly amend the disclosure statement to reflect any material

change in the information required by this chapter.

(c) The master association, within ten days after a request by a declarant, a holder of

declarant rights, or a buyer referred to in section
515B.4-101
(e), or the authorized

representative of any of them, shall furnish the information required to be provided by

subsection (a)(20). A declarant or other person who provides information pursuant to

subsection (a)(20), is not liable to the buyer for any erroneous information if the declarant

or other person: (i) is not an affiliate of or related in any way to a person authorized to

appoint the master association board pursuant to section
515B.2-121
(c)(3), and (ii) has no

actual knowledge that the information is incorrect.

(d) This section applies only to common interest communities created on or after August

1, 2010.

Sec. 6.

Minnesota Statutes 2024, section 515B.4-107, is amended to read:

515B.4-107 RESALE OF UNITS.

(a) In the event of a resale of a unit by a unit owner other than a declarant, unless exempt

under section
515B.4-101
(c), the unit owner shall furnish to a purchaser, before execution

of any purchase agreement for a unit or otherwise before conveyance, the following

documents relating to the association or to the master association, if applicable:

(1) copies of the declaration (other than any CIC plat), the articles of incorporation and

bylaws, any rules and regulations, and any amendments or supplemental declarations
new text begin
,

including the schedules of fines and allowable remedies required under section 515B.3-102

and the collection policy adopted by the association under section 515B.3-115(k) or

515B.3-1151(k)
new text end
;

(2) copies of the master declaration, articles of incorporation, bylaws, and rules and

regulations, if the common interest community is subject to a master declaration;
deleted text begin
and
deleted text end

new text begin

(3) a copy of any reserve study obtained by the association within the past three years,

for the purposes of evaluating the adequacy of replacement reserve contributions and

compliance with section 515B.3-1141; and

new text end

deleted text begin

(3)
deleted text end
new text begin
(4)
new text end
a resale disclosure certificate from the association dated not more than 90 days

prior to the date of the purchase agreement or the date of conveyance, whichever is earlier,

containing the information set forth in subsection (b).

(b) The resale disclosure certificate must be in substantially the following form:

COMMON INTEREST COMMUNITY

RESALE DISCLOSURE CERTIFICATE

Name of Common Interest Community:

.

Name of Association:

.

Address of Association:

.

Unit Number(s) (include principal unit and any garage, storage, or other auxiliary units):

Common elements licensed under Minnesota Statutes, section
515B.2-109
(e):

.

.

The following information is furnished by the association named above according to

Minnesota Statutes, section
515B.4-107
.

1. There is no right of first refusal or other restraint on the free alienability of the above

unit(s) contained in the declaration, bylaws, rules and regulations, or any amendment to

them, except as follows:

.

.

.

.

2. The following periodic installments of common expense assessments and special

assessments are payable with respect to the above unit(s):

a.

Annual assessment installments:

$

.

Due:

.

b.

Special assessment installments:

$

.

Due:

.

c.

Unpaid assessments, fines, or other charges:

(1)

Annual

$

.

(2)

Special

$

.

(3)

Fines

$

.

(4)

Other Charges

$

.

d.

The association has/has not (strike one) approved a plan for levying certain

common expense assessments against fewer than all the units according to

Minnesota Statutes, section
515B.3-115
, subsection (e). If a plan is approved, a

description of the plan is attached to this certificate.

3. In addition to the amounts due under paragraph 2, the following additional fees or

charges other than assessments are payable by unit owners (include late payment charges,

user fees, etc.):

.

.

.

4. There are no extraordinary expenditures approved by the association, and not yet

assessed, for the current and two succeeding fiscal years, except as follows:

.

.

.

5. The association is obligated to replace the following components of the common

interest community:

.

.

.

The association has the following amounts in its reserves for replacement of those

components:

.

.

The replacement of the following components is funded by assessments levied only against

the unit or units served by the component, pursuant to Minnesota Statutes, section

515B.3-115

(e)(1) or (2).

.

.

.

6. The following documents are furnished with this certificate according to statute:

a.

The most recent regularly prepared balance sheet and income and expense

statement of the association.

b.

The current budget of the association.

7. There are no unsatisfied judgments against the association, except as follows (identify

creditor and amount):

.

.

.

8. There are no pending lawsuits to which the association is a party, except as follows

(identify and summarize status):

.

.

.

9. Description of insurance coverages:

a. The association provides the following insurance coverage for the benefit of unit

owners: (Reference may be made to applicable sections of the declaration or bylaws;

however, any additional coverages should be described in this space)

.

.

.

.

b. The following described fixtures, decorating items, or construction items within the

unit referred to in Minnesota Statutes, section
515B.3-113
, subsection (b), are insured by

the association (check as applicable):

..... Ceiling or wall finishing materials

..... Finished flooring

..... Cabinetry

..... Finished millwork

..... Electrical, heating, ventilating, and air conditioning equipment, or plumbing fixtures

serving a single unit

..... Built-in appliances

..... Improvements and betterments as originally constructed

..... Additional improvements and betterments installed by unit owners

new text begin

c. The association's master insurance has deductible amounts for property damage,

including wind or hail claims, that may be assessed to a unit as a loss assessment. The unit

owner, at the time a loss assessment is due, is personally liable for payment of a loss

assessment. The deductible and potential loss assessment amount is subject to change each

year when the association purchases new insurance. It is recommended that each unit owner

personally purchase insurance coverage for loss assessments in the amount of the association's

deductible. IF THE ASSOCIATION ASSESSES A LOSS ASSESSMENT, THE UNIT

OWNER IS PERSONALLY RESPONSIBLE FOR PAYING IT, EVEN IF THE UNIT

OWNER DOES NOT HAVE APPROPRIATE INSURANCE COVERAGE.

new text end

10. The board of directors of the association has not notified the unit owner (i) that any

alterations or improvements to the unit or to the limited common elements assigned to it

violate any provision of the declaration; or (ii) that the unit is in violation of any governmental

statute, ordinance, code, or regulation, except as follows:

.

.

11. The remaining term of any leasehold estate affecting the common interest community

and the premises governing any extension or renewal of it are as follows:

.

.

.

12. This Resale Disclosure Certificate is given in connection with the resale of a unit

by a unit owner who is not a declarant and who, therefore, is not liable for express warranties

under Minnesota Statutes, section
515B.4-112
, or implied warranties under Minnesota

Statutes, section
515B.4-113
. The conveyance of this unit may, however, result in a transfer

of preexisting warranties made by a declarant under the referenced statutes, subject to the

terms of Minnesota Statutes, sections
515B.4-114
and
515B.4-115
.

13. In addition to the above, the following matters affecting the occupancy or use of the

unit, or the unit owner's obligations with respect to the unit, are deemed material:

.

.

I hereby certify that the foregoing information and statements are true and correct as

of

.

.

(Date)

By:

.

Title:

.

(Association representative)

Address:

.

Phone Number:

.

RECEIPT

In addition to the foregoing information furnished by the association, the unit owner is

obligated to furnish to the purchaser before execution of any purchase agreement for a unit

or otherwise before conveyance, copies of the following documents relating to the association

or to the master association (as applicable): the declaration (other than any common interest

community plat), articles of incorporation, bylaws, rules and regulations (if any), and any

amendments to these documents. Receipt of the foregoing documents, and the resale

disclosure certificate, is acknowledged by the undersigned buyer(s).

new text begin

Buyer also acknowledges that they understand the legal documents they have been provided

in this disclosure will impact property rights related to the subject property and may impose

certain obligations as a unit owner. Governing documents for a common interest community

dictate how decisions will be made related to the property, including financial decisions,

maintenance decisions, and restrictions on the use of the property, which may include, but

not be limited to, restrictions on parking, appearance, noise, smoking, pets, and rentals.

Governing documents may also be modified or changed at any time with the appropriate

approval and any modifications or amendments will apply to existing unit owners. If the

undersigned has questions about the impact on property rights from the governing documents

provided with this disclosure, it is advisable to consult with an attorney.

new text end

Dated:

.

.

(Buyer)

.

(Buyer)

(c) If the common interest community is subject to a master declaration and governed

by a master association to which has been delegated any of the association's powers under

section
515B.3-102
(a)(2), then the financial information required to be disclosed under

subsection (b) may be disclosed on a consolidated basis.

(d) The association, within ten days after a request by a unit owner, or the unit owner's

authorized representative, shall furnish the certificate required in subsection (a). The

association may charge a reasonable fee for furnishing the certificate and any association

documents related thereto. A unit owner providing a certificate pursuant to subsection (a)

is not liable to the purchaser for any erroneous information provided by the association and

included in the certificate. A unit owner who has acquired title to a unit pursuant to section

515B.3-104
including, but not limited to, a unit owner who has acquired title through

foreclosure or a deed in lieu of foreclosure, must indicate to the association in connection

with a request for a resale disclosure certificate whether the requesting unit owner is or is

not a declarant. The unit owner, not the association, is liable for any damage, loss, or other

consequence arising out of the incorrect representation of its declarant status.

(e) A purchaser is not liable for any unpaid common expense assessments, including

special assessments, if any, not set forth in the certificate required in subsection (a). A

purchaser is not liable for the amount by which the annual or special assessments exceed

the amount of annual or special assessments stated in the certificate for assessments payable

in the year in which the certificate was given, except to the extent of any increases

subsequently approved in accordance with the declaration or bylaws. A unit owner is not

liable to a purchaser for the failure of the association to provide the certificate, or a delay

by the association in providing the certificate in a timely manner.