Bill would set guardrails for HOAs, common interest communities

A bill to regulate homeowner associations and common interest communities is being lauded by residents and decried by attorneys representing HOAs.

About 1.6 million Minnesotans, or 27% of residents, live in a HOA or common interest community and 82% of new homes sold in 2023 were in either category.

Issues involving HOAs and common interest communities are one of the top reasons constituents contact their legislators, but current law offers little to help solve the issues, Rep. Kari Rehrauer (DFL-Coon Rapids) said. To add more teeth to state law, HF1268/SF1750*, sponsored by Rep. Kristin Bahner (DFL-Maple Grove), has been making its way through the legislative process.

The House Commerce Finance and Policy Committee laid over the bill, as amended, Tuesday. The Senate passed the bill 44-22 in May 2025. An HOA and common interest communities working group studied existing laws and their impact and issued a report in February 2025 with 41 recommendations.

Among its proposed policies, the bill would:

• allow a common interest community of single-family homes that doesn’t include any common elements to terminate the community by a two-thirds vote of unit owners;
• provide unit owners at least 21 days to review and comment on proposed rule and regulation changes;
• require an association to adopt a schedule of fines for violations and cap violation fines and late assessment payments; 
• require a board of directors to provide to unit owners any meeting agendas and contracts and documents on which the board will vote and allow unit owners to speak on an agenda item;
• prohibit board members from deliberating or voting to approve a contract in which they or a family member will likely have a financial gain;
• require a board or property manager to solicit at least three written competitive bids for property maintenance, construction, repair or reconstruction services with an estimated cost of at least $50,000, with some exceptions such as emergency repairs;
• prohibit a property manager from requiring an association to work with a particular vendor;
• limit an association’s authority to regulate parking on a public right of way;
• set requirements for a dispute resolution process between a unit owner and association; and
• prohibit local governments from adding a condition to a building permit approval that requires the creation of an HOA or inclusion of any services, features or common property that would require a HOA unless requested by the developer. 

[READ: Minnesota Homeownership Center letter]

Several homeowners spoke about disputes with their HOAs over maintenance, requiring unit owners to use specific vendors and unit owners being charged for work that wasn’t done.

Minneapolis resident Jolene Johnson said her house was forced into an HOA that’s not responsible for any common elements and doesn’t provide any services, but she’s paid the HOA nearly $5,000.

“Its sole purpose has become collecting dues and finding members,” she said.

She received a letter stating her garden, in place for 10 years, was in violation of HOA rules. But when she began attending board meetings to discuss it, she found out that the HOA was initiating foreclosure proceedings on 10 homes for late fines and dues of less than $500.

The current board wants to dissolve the HOA, and while they have enough homeowner votes to support it, they can’t reach the threshold required by law of mortgage holders signing off on it, Johnson said.

But attorneys who represent HOA clients said the bill will increase costs for all unit owners due to its one-size-fits-all requirements, make governance by boards more difficult, and take away unit owners’ property rights.

[READ: Greenstein Sellers letter]

Matt Greenstein, a managing partner of Greenstein Sellers, said the bill would interfere with the self-governance process of HOAs, unit owners’ rights and the ability for HOAs to incentivize timely payments from unit owners. It also includes language that incentivizes disputes.

“While we want to have a process where it’s transparent and homeowners can provide feedback, we can’t have a process where one decision can be questioned indefinitely for years,” he said.

New HOA Ombudsperson Office

A Homeowners Association Ombudsperson Office is now operational within the Department of Commerce. Created by the Legislature in 2025, it facilitates disputes between unit owners and HOAs and assists unit owners, tenants and HOAs understand their rights.

Sara Payne, the department’s assistant commissioner of enforcement, said the office’s new website went live last week and a free, informal mediation service is coming soon.

[MORE: HOA Ombudsperson presentation]

To date, the office has received 61 complaints and 659 calls and inquiries, Payne said. Common issues and questions involve dues and special assessments; maintenance; insurance; accessing governing documents and financial information; and fees, fines, collection charges and attorney fees.