A bill for an act
relating to homeowner associations; prohibiting certain practices relating to property
management companies; prohibiting certain conduct by associations; amending
Minnesota Statutes 2022, sections 515B.3-107; 515B.4-116; Minnesota Statutes
2023 Supplement, sections 515B.3-102; 515B.3-116; proposing coding for new
law in Minnesota Statutes, chapter 325E.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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(a) The definitions in this subdivision apply to this section.
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(b) "Person" means an individual, firm, partnership, limited liability company,
corporation, or association.
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(c) "Property manager" or "property management company" means a person who engages
in the business of managing real property that is owned by another person.
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(d) "Owner" means a person who has any legal or equitable interest in the real property.
An owner of a common interest community, as defined in chapter 515B, means the unit
owners' association organized under section 515B.3-101.
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No property
manager or property management company having an interest directly or indirectly in a
construction firm, salvage firm, or appraisal firm may hire the directly or indirectly owned
construction firm, salvage firm, or appraisal firm to perform work on a managed property
unless the interest has been disclosed in writing to the owner or owners at least three days
prior to the execution of a contract for the work. "Firm" includes a corporation, partnership,
association, or individual firm.
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No property manager or property management company
shall request or accept money, rebates, or anything of value from a construction firm, salvage
firm, or appraisal firm as:
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(1) an inducement to refer business or clients to the firm;
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(2) a condition for awarding a contract to the firm;
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(3) part of a fee specified in a contract; or
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(4) fee splitting for services rendered, unless the other person is also a licensed contractor.
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A contract between a person and a property manager or
property management company having a term exceeding one year must not contain an
automatic renewal provision that requires the association to give notice of nonrenewal more
than 30 days prior to the contract's anniversary date. Any contract with a property manager
or property management company that is automatically renewed shall be terminable by the
person for any reason upon 60 days' notice.
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A property manager or property management
company must not be compensated in whole or in part based on the amount of fines collected
by the property manager or property management company on behalf of the person and
shall not collect from the person or owner any fee in connection with its collection of a fine
imposed by the association.
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If a property manager or property management company violates
this section, an owner may bring an action against the property manager or property
management company in a court of competent jurisdiction for damages sustained by the
owner as a consequence of the property manager's or property management company's
violation, together with the actual costs of the action, including reasonable attorney fees.
The remedies in this section are in addition to any other remedies permitted by law.
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Minnesota Statutes 2023 Supplement, section 515B.3-102, is amended to read:
(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) impose interest and late charges for late payment of assessments and, 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 attorney fees and costs 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 hearing is held by the board or a committee of the board, the board does not adopt 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