New regulations created for homeowner associations, common interest communities

A wide-ranging law will set regulations for homeowner associations and common interest communities that focus on transparency, best practices and consumer protections.

Its provisions include regulations that will add transparency to board meetings and documents, prohibit conflicts of interest for board members and property managers, ban retaliation against unit owners, add requirements for maintenance contracts, limit fines imposed on unit owners, create a new process for terminating an HOA and limit a local government’s ability to require an HOA as a permit condition for new housing developments.

The definition section of the law took effect May 13, 2026, and all other parts will take effect Jan. 1, 2027. It’s sponsored by Rep. Kristin Bahner (DFL-Maple Grove) and Sen. Eric Lucero (R-St. Michael).

HF1268/SF1750*/CH82

Terminations

Beginning Jan. 1, 2027, a slightly lower threshold is established to terminate an HOA that has no common elements and is only single-family dwellings.

Unit owners’ association duties

An association will be required to give unit owners at least 21 days’ notice for review and comment before it votes to adopt, amend or revoke a rule or regulation. A temporary rule can be adopted without notice in an emergency if notice is given as soon as practicable to unit owners before permanently adopting the rule.

Fines will be capped at $100 for a single violation of the declaration, bylaws and rules and regulations unless association members approve a greater amount at a board meeting. The association can impose a fine exceeding $100 for subsequent violations for the same conduct or if the violation has serious and immediate impacts on a resident’s health or safety, causes damage to a unit or common element or involving using property for financial enrichment. The new law will also provide regulations on payments for a fine.

An association will be required to provide every unit owner a list of fines for common violations and a description of available remedies.

Interest on delinquent assessments for common expenses and special assessments will be capped at 8%; the fee for late payments on common expenses and special assessments will be capped at the greater of $20 or 5% of the amount owed.

Board of directors

Under the new law, elections of directors must occur regularly, and each term can’t exceed three years if there isn’t a limit on the number of terms a director may serve.

Meeting agendas, contracts and other documents the board intends to vote on at a board meeting must be made available to unit owners in a reasonable manner. A unit owner or a person designated in writing by the owner must be allowed to speak on an agenda item.

Board members will not be allowed to participate in deliberations or vote on a contract where they or their family member have a financial interest in the contract or will likely realize a financial gain as a result. Nor will board members be allowed to solicit or accept money or other compensation as an inducement for them to vote in favor of a contract for property maintenance, construction, repair or reconstruction services. The same prohibitions will be placed on property managers.

The board or property manager will be required to solicit a minimum of three written competitive bids before entering into a contract for property maintenance, construction, repair or reconstruction services estimated to cost at least $50,000. Records must be kept of the bid selection process.

Retaliation

Effective Jan. 1, 2027, an association will be banned from retaliating against a unit owner for asserting any statutory right the owner has. It won’t include commencing a foreclosure action for an unpaid fine after time allowed for payment.

The association’s disclosure of data in violation of the Safe at Home program will be considered a violation of this section.

Local government regulation

For all common interest communities created on or after Jan. 1, 2027, local governments will be banned from conditioning approval of a residential building permit or conditional use permit, residential subdivision development or residential planned unit development or any other permit on:

• the creation of a homeowners association;

• inclusion of any service, feature or common property necessitating a homeowners association, unless requested by the developer;

• inclusion of any terms in a homeowners association declaration, bylaws, articles of incorporation or other governing documents; or

• adoption, revocation or amendment to a rule or regulation governing the homeowners association or its members.

Other provisions

The new law will also:

• set a process for an owner requesting an alteration and for an association to decide on the request;

• clarify provisions related to an association’s authority over parking and the local government’s authority on delegating policing powers;

• require associations to adopt a collection policy and provide a copy to all unit owners; and

• outline the requirements for notification and legal fees when an association refers a unit owner’s inquiry to the association’s legal counsel.

SF1750* / HF1268 / CH82