HF 2084

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/15/2023 11:01am

A bill for an act
relating to homeowners' associations; modifying provisions governing attorney
fees and assessments; amending Minnesota Statutes 2022, sections 515B.3-102;
515B.3-115; 515B.3-1151; 515B.3-116.

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

Section 1.

Minnesota Statutes 2022, 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), deleted text begin and deleted text end (e), new text begin and (f) new text end 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 new text begin , 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 being heard 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 new text end ;

(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.

new text begin (c) 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:
new text end

new text begin (1) states the amount and reason for the fine or assessment;
new text end

new text begin (2) for fines levied under section 515B.3-102(a)(11), specifies: (i) the violation for which
a fine is being levied; and (ii) the specific section of the declaration, bylaws, rules, or
regulations allegedly violated;
new text end

new text begin (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;
new text end

new text begin (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;
new text end

new text begin (5) describes the unit owner's right to be heard by the board or a committee appointed
by the board;
new text end

new text begin (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
new text end

new text begin (7) informs the unit owner that homeownership assistance is available from, and includes
the contact information for, the Minnesota Homeownership Center.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end Notwithstanding subsection (a), powers exercised under this section must comply
with section 500.215.

deleted text begin (d) deleted text end new text begin (e) new text end 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 deleted text begin (d)(1) deleted text end new text begin (e)(1) new text end and the proxy expressly references this
notice.

deleted text begin (e) deleted text end new text begin (f) new text end 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 deleted text begin (d)(1) deleted text end new text begin (e)(1) new text end and deleted text begin (d)(2) deleted text end new text begin (e)(2) new text end 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
deleted text begin (d) deleted text end new text begin (e) new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2024, for fines and assessments
levied on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2022, 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) reasonable deleted text begin attorneys deleted text end new text begin attorney new text end fees and costs incurred by the association in connection
with (i) the collection of assessments new text begin against a unit owner, new text end and deleted text begin , deleted text end (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 new text begin subject to section 515B.3-116(h) new text end ; 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 new text begin , 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 new text end .

(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.

(k) This section applies only to common interest communities created before August 1,
2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023.
new text end

Sec. 3.

Minnesota Statutes 2022, 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) 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 new text begin , subject to section 515B.3-116(h) new text end ; 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 new text begin , 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 new text end .

(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.

(k) This section applies only to common interest communities created on or after August
1, 2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023.
new text end

Sec. 4.

Minnesota Statutes 2022, section 515B.3-116, is amended to read:

515B.3-116 LIEN FOR ASSESSMENTS.

(a) The association has a lien on a unit for any assessment levied against that unit from
the time the assessment becomes due. If an assessment is payable in installments, the full
amount of the assessment is a lien from the time the first installment thereof becomes due.
Unless the declaration otherwise provides, fees, charges, late charges, fines and interest
charges pursuant to section 515B.3-102(a)(10), (11) and (12) are liens, and are enforceable
as assessments, under this section. Recording of the declaration constitutes record notice
and perfection of any assessment lien under this section, and no further recording of any
notice of or claim for the lien is required.

(b) Subject to subsection (c), a lien under this section is prior to all other liens and
encumbrances on a unit except (i) liens and encumbrances recorded before the declaration
and, in a cooperative, liens and encumbrances which the association creates, assumes, or
takes subject to, (ii) any first mortgage encumbering the fee simple interest in the unit, or,
in a cooperative, any first security interest encumbering only the unit owner's interest in the
unit, (iii) liens for real estate taxes and other governmental assessments or charges against
the unit, and (iv) a master association lien under section 515B.2-121(h). This subsection
shall not affect the priority of mechanic's liens.

(c) If a first mortgage on a unit is foreclosed, the first mortgage was recorded after June
1, 1994, and no owner or person who acquires the owner's interest in the unit redeems
pursuant to chapter 580, 581, or 582, the holder of the sheriff's certificate of sale from the
foreclosure of the first mortgage or any person who acquires title to the unit by redemption
as a junior creditor shall take title to the unit subject to a lien in favor of the association for
unpaid assessments for common expenses levied pursuant to section 515B.3-115(a), (e)(1)
to (3), (f), and (i) which became due, without acceleration, during the six months immediately
preceding the end of the owner's period of redemption. The common expenses shall be
based upon the association's then current annual budget, notwithstanding the use of an
alternate common expense plan under section 515B.3-115(a)(2). If a first security interest
encumbering a unit owner's interest in a cooperative unit which is personal property is
foreclosed, the secured party or the purchaser at the sale shall take title to the unit subject
to unpaid assessments for common expenses levied pursuant to section 515B.3-115(a),
(e)(1) to (3), (f), and (i) which became due, without acceleration, during the six months
immediately preceding the first day following either the disposition date pursuant to section
336.9-610 or the date on which the obligation of the unit owner is discharged pursuant to
section 336.9-622.

(d) Proceedings to enforce an assessment lien shall be instituted within three years after
the last installment of the assessment becomes payable, or shall be barred.

(e) The unit owner of a unit at the time an assessment is due shall be personally liable
to the association for payment of the assessment levied against the unit. If there are multiple
owners of the unit, they shall be jointly and severally liable.

(f) This section does not prohibit actions to recover sums for which subsection (a) creates
a lien nor prohibit an association from taking a deed in lieu of foreclosure.

(g) The association shall furnish to a unit owner or the owner's authorized agent upon
written request of the unit owner or the authorized agent a statement setting forth the amount
of unpaid assessments currently levied against the owner's unit. If the unit owner's interest
is real estate, the statement shall be in recordable form. The statement shall be furnished
within ten business days after receipt of the request and is binding on the association and
every unit owner.

(h) The association's lien may be foreclosed as provided in this subsection.

(1) In a condominium or planned community, the association's lien may be foreclosed
in a like manner as a mortgage containing a power of sale pursuant to chapter 580, or by
action pursuant to chapter 581. The association shall have a power of sale to foreclose the
lien pursuant to chapter 580 new text begin , except that any portion of the assessment that represents
attorney fees or costs shall not be included in the amount a unit owner must pay to reinstate
under section 580.30 or chapter 581 new text end .

(2) In a cooperative whose unit owners' interests are real estate, the association's lien
shall be foreclosed in a like manner as a mortgage on real estate as provided in paragraph
(1).

(3) In a cooperative whose unit owners' interests in the units are personal property, the
association's lien shall be foreclosed in a like manner as a security interest under article 9
of chapter 336. In any disposition pursuant to section 336.9-610 or retention pursuant to
sections 336.9-620 to 336.9-622, the rights of the parties shall be the same as those provided
by law, except (i) notice of sale, disposition, or retention shall be served on the unit owner
90 days prior to sale, disposition, or retention, (ii) the association shall be entitled to its
reasonable costs and attorney fees not exceeding the amount provided by section 582.01,
subdivision 1a, (iii) the amount of the association's lien shall be deemed to be adequate
consideration for the unit subject to disposition or retention, notwithstanding the value of
the unit, and (iv) the notice of sale, disposition, or retention shall contain the following
statement in capital letters with the name of the association or secured party filled in:

"THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of association or
secured party) HAS BEGUN PROCEEDINGS UNDER MINNESOTA STATUTES,
CHAPTER 515B, TO FORECLOSE ON YOUR INTEREST IN YOUR UNIT FOR THE
REASON SPECIFIED IN THIS NOTICE. YOUR INTEREST IN YOUR UNIT WILL
TERMINATE 90 DAYS AFTER SERVICE OF THIS NOTICE ON YOU UNLESS
BEFORE THEN:

(a) THE PERSON AUTHORIZED BY (fill in the name of association or secured party)
AND DESCRIBED IN THIS NOTICE TO RECEIVE PAYMENTS RECEIVES FROM
YOU:

(1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS

(2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS

(3) $500 TO APPLY TO deleted text begin ATTORNEYS deleted text end new text begin ATTORNEY new text end FEES ACTUALLY EXPENDED
OR INCURRED; PLUS

(4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO (fill
in name of association or secured party) AFTER THE DATE OF THIS NOTICE; OR

(b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL YOUR
CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR
SETTLEMENT. YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND
GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.

IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS WITHIN
THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP RIGHTS IN
YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU WILL LOSE
ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL LOSE YOUR
RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR RIGHT TO
ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND YOU WILL
BE EVICTED. IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT
AN ATTORNEY IMMEDIATELY."

(4) In any foreclosure pursuant to chapter 580, 581, or 582, the rights of the parties shall
be the same as those provided by law, except (i) the period of redemption for unit owners
shall be six months from the date of sale or a lesser period authorized by law, (ii) in a
foreclosure by advertisement under chapter 580, the foreclosing party shall be entitled to
costs and disbursements of foreclosure and deleted text begin attorneys deleted text end new text begin attorney new text end fees authorized by the
declaration or bylaws, notwithstanding the provisions of section 582.01, subdivisions 1 and
1a, (iii) in a foreclosure by action under chapter 581, the foreclosing party shall be entitled
to costs and disbursements of foreclosure and attorneys fees as the court shall determine,
and (iv) the amount of the association's lien shall be deemed to be adequate consideration
for the unit subject to foreclosure, notwithstanding the value of the unit.

(i) If a holder of a sheriff's certificate of sale, prior to the expiration of the period of
redemption, pays any past due or current assessments, or any other charges lienable as
assessments, with respect to the unit described in the sheriff's certificate, then the amount
paid shall be a part of the sum required to be paid to redeem under section 582.03.

(j) In a cooperative, if the unit owner fails to redeem before the expiration of the
redemption period in a foreclosure of the association's assessment lien, the association may
bring an action for eviction against the unit owner and any persons in possession of the unit,
and in that case section 504B.291 shall not apply.

(k) An association may assign its lien rights in the same manner as any other secured
party.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2023, and applies to foreclosures
initiated on or after that date.
new text end