The bill amends the Minnesota Common Interest Ownership Act, specifically section 515B.3-114, to modify the reserve requirements for common interest communities. It introduces new provisions that require annual budgets to include adequate reserve funds for the replacement of community components due to ordinary wear and tear, obsolescence, and to accommodate sustainable energy-saving technologies or changes in statutory energy performance standards. Additionally, the bill stipulates that the budgeted amount for replacement reserves must be sufficient, in conjunction with past and future contributions, to cover the replacement of components based on their estimated remaining useful life, while also allowing for the evaluation of sustainable energy alternatives.

Furthermore, the bill clarifies that unless specified otherwise in the declaration, any surplus funds remaining after covering common expenses and reserves can either be credited to unit owners to reduce future assessments or allocated to reserves, as decided by the board of directors. The provisions of this section are applicable only to common interest communities with fiscal years starting before January 1, 2012.

Statutes affected:
Introduction: 515B.3