1.1 	A bill for an act
1.2 	relating to real property; amending the Minnesota
1.3 	Common Interest Ownership Act; amending Minnesota
1.4 	Statutes 2004, sections 515B.1-102; 515B.1-103;
1.5 	515B.1-106; 515B.1-107; 515B.1-116; 515B.2-101;
1.6 	515B.2-102; 515B.2-104; 515B.2-106; 515B.2-108;
1.7 	515B.2-110; 515B.2-111; 515B.2-112; 515B.2-113;
1.8 	515B.2-118; 515B.2-119; 515B.2-121; 515B.2-123;
1.9 	515B.2-124; 515B.3-101; 515B.3-102; 515B.3-103;
1.10 	515B.3-105; 515B.3-106; 515B.3-110; 515B.3-112;
1.11 	515B.3-113; 515B.3-114; 515B.3-115; 515B.3-116;
1.12 	515B.3-117; 515B.3-120; 515B.4-101; 515B.4-102;
1.13 	515B.4-105; 515B.4-106; 515B.4-107; 515B.4-108;
1.14 	515B.4-109; 515B.4-111; 515B.4-115.
1.15 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.16 	Section 1. Minnesota Statutes 2004, section 515B.1-102, is
1.17 	amended to read:
1.18 	515B.1-102 APPLICABILITY.
1.19 	(a) Except as provided in this section, this chapter, and
1.20 	not chapters 515 and 515A, applies to all common interest
1.21 	communities created within this state on and after June 1, 1994.
1.22 	(b) The applicability of this chapter to common interest
1.23 	communities created prior to June 1, 1994, shall be as follows:
1.24 	(1) This chapter shall apply to condominiums created under
1.25 	chapter 515A with respect to events and circumstances occurring
1.26 	on and after June 1, 1994; provided (i) that this chapter shall
1.27 	not invalidate the declarations, bylaws or condominium plats of
1.28 	those condominiums, and (ii) that chapter 515A, and not this
1.29 	chapter, shall govern all rights and obligations of a declarant
1.30 	of a condominium created under chapter 515A, and the rights and
2.1 	claims of unit owners against that declarant.
2.2 	(2) The following sections in this chapter apply to
2.3 	condominiums created under chapter 515:  515B.1-104 (Variation
2.4 	by Agreement); 515B.1-105 (Separate Titles and Taxation);
2.5 	515B.1-106 (Applicability of Local Ordinances, Regulations, and
2.6 	Building Codes); 515B.1-107 (Eminent Domain); 515B.1-108
2.7 	(Supplemental General Principles of Law Applicable); 515B.1-109
2.8 	(Construction Against Implicit Repeal); 515B.1-112
2.9 	(Unconscionable Agreement or Term of Contract); 515B.1-113
2.10 	(Obligation of Good Faith); 515B.1-114 (Remedies to be Liberally
2.11 	Administered); 515B.1-115 (Notice); 515B.1-116 (Recording);
2.12 	515B.2-103 (Construction and Validity of Declaration and
2.13 	Bylaws); 515B.2-104 (Description of Units); 515B.2-108(d)
2.14 	(Allocation of Interests); 515B.2-109(c) (Common Elements and
2.15 	Limited Common Elements); 515B.2-112 (Subdivision or Conversion
2.16 	of Units); 515B.2-113 (Alteration of Units); 515B.2-114
2.17 	(Relocation of Boundaries Between Adjoining Units); 515B.2-115
2.18 	(Minor Variations in Boundaries); 515B.2-118 (Amendment of
2.19 	Declaration); 515B.2-119 (Termination of Common Interest
2.20 	Community);515B.3-102 (Powers of Unit Owners' Association);
2.21 	515B.3-103(a), (b), and (g) (Board; Directors and Officers;
2.22 	Period of Declarant Control); 515B.3-107 (Upkeep of Common
2.23 	Interest Community); 515B.3-108 (Meetings); 515B.3-109
2.24 	(Quorums); 515B.3-110 (Voting; Proxies); 515B.3-111 (Tort and
2.25 	Contract Liability); 515B.3-112 (Conveyance or Encumbrance of
2.26 	Common Elements); 515B.3-113 (Insurance); 515B.3-114 (Reserves;
2.27 	Surplus Funds); 515B.3-115 (c), (e), (f), (g), (h), and (i)
2.28 	(Assessments for Common Expenses); 515B.3-116 (Lien for
2.29 	Assessments); 515B.3-117 (Other Liens); 515B.3-118 (Association
2.30 	Records); 515B.3-119 (Association as Trustee); 515B.3-121
2.31 	(Accounting Controls); 515B.4-107 (Resale of Units); 515B.4-108
2.32 	(Purchaser's Right to Cancel Resale); and 515B.4-116 (Rights of
2.33 	Action; Attorney's Fees).  Section 515B.1-103 (Definitions)
2.34 	shall apply to the extent necessary in construing any of the
2.35 	sections referenced in this section.  Sections 515B.1-105,
2.36 	515B.1-106, 515B.1-107, 515B.1-116, 515B.2-103, 515B.2-104,
3.1 	515B.2-118, 515B.3-102, 515B.3-110, 515B.3-111, 515B.3-113,
3.2 	515B.3-116, 515B.3-117, 515B.3-118, 515B.3-121, 515B.4-107,
3.3 	515B.4-108, and 515B.4-116 apply only with respect to events and
3.4 	circumstances occurring on and after June 1, 1994.  All other
3.5 	sections referenced in this section apply only with respect to
3.6 	events and circumstances occurring after July 31, 1999.  A
3.7 	section referenced in this section does not invalidate the
3.8 	declarations, bylaws or condominium plats of condominiums
3.9 	created before August 1, 1999.  But all sections referenced in
3.10 	this section prevail over the declarations, bylaws, CIC plats,
3.11 	rules and regulations under them, of condominiums created before
3.12 	August 1, 1999, except to the extent that this chapter defers to
3.13 	the declarations, bylaws, CIC plats, or rules and regulations
3.14 	issued under them.
3.15 	(3) This chapter shall not apply to cooperatives and
3.16 	planned communities created prior to June 1, 1994; except by
3.17 	election pursuant to subsection (d), and except that sections
3.18 	515B.1-116, subsections (a), (c), (d), (e), (f), and (h),
3.19 	515B.4-107, and 515B.4-108, apply to all planned communities and
3.20 	cooperatives regardless of when they are created, unless they
3.21 	are exempt under subsection (e).
3.22 	(c) This chapter shall not invalidate any amendment to the
3.23 	declaration, bylaws or condominium plat of any condominium
3.24 	created under chapter 515 or 515A if the amendment was recorded
3.25 	before June 1, 1994.  Any amendment recorded on or after June 1,
3.26 	1994, shall be adopted in conformity with the procedures and
3.27 	requirements specified by those instruments and by this
3.28 	chapter.  If the amendment grants to any person any rights,
3.29 	powers or privileges permitted by this chapter, all correlative
3.30 	obligations, liabilities and restrictions contained in this
3.31 	chapter shall also apply to that person.
3.32 	(d) Any condominium created under chapter 515, any planned
3.33 	community or cooperative which would be exempt from this chapter
3.34 	under subsection (e), or any planned community or cooperative
3.35 	created prior to June 1, 1994, may elect to be subject to this
3.36 	chapter, as follows:
4.1 	(1) The election shall be accomplished by recording a
4.2 	declaration or amended declaration, and a new or amended CIC
4.3 	plat where required, and by approving bylaws or amended bylaws,
4.4 	which conform to the requirements of this chapter, and which, in
4.5 	the case of amendments, are adopted in conformity with the
4.6 	procedures and requirements specified by the existing
4.7 	declaration and bylaws of the common interest community, and by
4.8 	any applicable statutes.
4.9 	(2) In a condominium, the preexisting condominium plat
4.10 	shall be the CIC plat and an amended CIC plat shall be required
4.11 	only if the amended declaration or bylaws contain provisions
4.12 	inconsistent with the preexisting condominium plat.  The
4.13 	condominium's CIC number shall be the apartment ownership number
4.14 	or condominium number originally assigned to it by the recording
4.15 	officer.  In a cooperative in which the unit owners' interests
4.16 	are characterized as real estate, a CIC plat shall be required.
4.17 	In a planned community, the preexisting plat recorded pursuant
4.18 	to chapter 505, 508, or 508A, or the part of the plat upon which
4.19 	the common interest community is located, shall be the CIC plat.
4.20 	(3) The amendment shall conform to the requirements of 
4.21 	comply with section 515B.2-118(d) (a)(3).
4.22 	(4) Except as permitted by paragraph (3), no declarant,
4.23 	affiliate of declarant, association, master association nor unit
4.24 	owner may acquire, increase, waive, reduce or revoke any
4.25 	previously existing warranty rights or causes of action that one
4.26 	of said persons has against any other of said persons by reason
4.27 	of exercising the right of election under this subsection.
4.28 	(5) A common interest community which elects to be subject
4.29 	to this chapter may, as a part of the election process, change
4.30 	its form of ownership by complying with the requirements of 
4.31 	section 515B.2-123.
4.32 	(e) Except as otherwise provided in this subsection, this
4.33 	chapter shall not apply, except by election pursuant to
4.34 	subsection (d), to the following:
4.35 	(1) a planned community or cooperative which consists of 12
4.36 	or fewer two units subject to the same declaration, which
5.1 	utilizes a common interest community plat complying with section
5.2 	515B.2-110(d)(1) and (2),which is not subject to any rights
5.3 	to subdivide or convert units or to add additional real estate,
5.4 	and which will is not be subject to a master association;
5.5 	(2) a common interest community where the units consist
5.6 	solely of separate parcels of real estate designed or utilized
5.7 	for detached single family dwellings or agricultural purposes,
5.8 	and where the association or a master association has no
5.9 	obligation to maintain any building containing a dwelling or any
5.10 	agricultural building;
5.11 	(3) a cooperative where, at the time of creation of the
5.12 	cooperative, the unit owners' interests in the dwellings as
5.13 	described in the declaration consist solely of proprietary
5.14 	leases having an unexpired term of fewer than 20 years,
5.15 	including renewal options;
5.16 	(4) planned communities utilizing a common interest
5.17 	community plat complying with section 515B.2-110(d)(1) and (2) 
5.18 	and cooperatives, which are limited by the declaration to
5.19 	nonresidential use; or
5.20 	(5) real estate subject only to an instrument or
5.21 	instruments filed primarily for the purpose of creating or
5.22 	modifying rights with respect to access, utilities, parking,
5.23 	ditches, drainage, or irrigation.
5.24 	(f) Section 515B.1-106 shall apply to all common interest
5.25 	communities.

5.26 	Sec. 2. Minnesota Statutes 2004, section 515B.1-103, is
5.27 	amended to read:
5.28 	515B.1-103 DEFINITIONS.
5.29 	In the declaration and bylaws, unless specifically provided
5.30 	otherwise or the context otherwise requires, and in this chapter:
5.31 	(1) "Additional real estate" means real estate that may be
5.32 	added to a flexible common interest community.
5.33 	(2) "Affiliate of a declarant" means any person who
5.34 	controls, is controlled by, or is under common control with a
5.35 	declarant.
5.36 	(A) A person "controls" a declarant if the person (i) is a
6.1 	general partner, officer, director, or employer of the
6.2 	declarant, (ii) directly or indirectly or acting in concert with
6.3 	one or more other persons, or through one or more subsidiaries,
6.4 	owns, controls, holds with power to vote, or holds proxies
6.5 	representing, more than 20 percent of the voting interest in the
6.6 	declarant, (iii) controls in any manner the election of a
6.7 	majority of the directors of the declarant, or (iv) has
6.8 	contributed more than 20 percent of the capital of the declarant.
6.9 	(B) A person "is controlled by" a declarant if the
6.10 	declarant (i) is a general partner, officer, director, or
6.11 	employer of the person, (ii) directly or indirectly or acting in
6.12 	concert with one or more other persons, or through one or more
6.13 	subsidiaries, owns, controls, holds with power to vote, or holds
6.14 	proxies representing, more than 20 percent of the voting
6.15 	interest in the person, (iii) controls in any manner the
6.16 	election of a majority of the directors of the person, or (iv)
6.17 	has contributed more than 20 percent of the capital of the
6.18 	person.
6.19 	(C) Control does not exist if the powers described in this
6.20 	subsection are held solely as a security interest and have not
6.21 	been exercised.
6.22 	(3) "Allocated interests" means the following interests
6.23 	allocated to each unit:  (i) in a condominium, the undivided
6.24 	interest in the common elements, the common expense liability,
6.25 	and votes in the association; (ii) in a cooperative, the common
6.26 	expense liability and the ownership interest and votes in the
6.27 	association; and (iii) in a planned community, the common
6.28 	expense liability and votes in the association.
6.29 	(4) "Association" means the unit owners' association
6.30 	organized under section 515B.3-101.
6.31 	(5) "Board" means the body, regardless of name, designated
6.32 	in the articles of incorporation, bylaws or declaration to act
6.33 	on behalf of the association, or on behalf of a master
6.34 	association when so identified.
6.35 	(6) "CIC plat" means a common interest community plat
6.36 	described in section 515B.2-110.
7.1 	(7) "Common elements" means all portions of the common
7.2 	interest community other than the units.
7.3 	(8) "Common expenses" means expenditures made or
7.4 	liabilities incurred by or on behalf of the association, or
7.5 	master association when so identified, together with any
7.6 	allocations to reserves.
7.7 	(9) "Common expense liability" means the liability for
7.8 	common expenses allocated to each unit pursuant to section
7.9 	515B.2-108.
7.10 	(10) "Common interest community" or "CIC" means contiguous
7.11 	or noncontiguous real estate within Minnesota that is subject to
7.12 	an instrument which obligates persons owning a separately
7.13 	described parcel of the real estate, or occupying a part of the
7.14 	real estate pursuant to a proprietary lease, by reason of their
7.15 	ownership or occupancy, to pay for (i) real estate taxes levied
7.16 	against; (ii) insurance premiums payable with respect to; (iii)
7.17 	maintenance of; or (iv) construction, maintenance, repair or
7.18 	replacement of improvements located on,one or more parcels or
7.19 	parts of the real estate other than the parcel or part that the
7.20 	person owns or occupies. Real estate which satisfies the
7.21 	definition of a common interest community is a common interest
7.22 	community whether or not it is subject to this chapter.Real
7.23 	estate subject to a master association, regardless of when the
7.24 	master association was formed, shall not collectively constitute
7.25 	a separate common interest community unless so stated in the
7.26 	master declaration recorded against the real estate pursuant to
7.27 	section 515B.2-121, subsection (f)(1).
7.28 	(11) "Condominium" means a common interest community in
7.29 	which (i) portions of the real estate are designated as units,
7.30 	(ii) the remainder of the real estate is designated for common
7.31 	ownership solely by the owners of the units, and (iii) undivided
7.32 	interests in the common elements are vested in the unit owners.
7.33 	(12) "Conversion property" means real estate on which is
7.34 	located a building that at any time within two years before
7.35 	creation of the common interest community was occupied as a
7.36 	residence for residential use wholly or partially by persons
8.1 	other than purchasers and persons who occupy with the consent of
8.2 	purchasers.
8.3 	(13) "Cooperative" means a common interest community in
8.4 	which the real estate is owned by an association, each of whose
8.5 	members is entitled by virtue of the member's ownership interest
8.6 	in the association to a proprietary lease.
8.7 	(14) "Dealer" means a person in the business of selling
8.8 	units for the person's own account.
8.9 	(15) "Declarant" means:
8.10 	(i) if the common interest community has been created, (A)
8.11 	any person who has executed a declaration, or an amendment to a
8.12 	declaration to add additional real estate, except secured
8.13 	parties, persons whose interests in the real estate will not be
8.14 	transferred to unit owners, or, in the case of a leasehold
8.15 	common interest community, a lessor who possesses no special
8.16 	declarant rights and who is not an affiliate of a declarant who
8.17 	possesses special declarant rights, or (B) any person who
8.18 	reserves, or succeeds under section 515B.3-104 to any special
8.19 	declarant rights; or
8.20 	(ii) any person or persons acting in concert who have
8.21 	offered prior to creation of the common interest community to
8.22 	transfer their interest in a unit to be created and not
8.23 	previously transferred.
8.24 	(16) "Declaration" means any instrument, however
8.25 	denominated, including any amendment to the instrument,that
8.26 	creates a common interest community.
8.27 	(17) "Dispose" or "disposition" means a voluntary transfer
8.28 	to a purchaser of any legal or equitable interest in the common
8.29 	interest community, but the term does not include the transfer
8.30 	or release of a security interest.
8.31 	(18) "Flexible common interest community" means a common
8.32 	interest community to which additional real estate may be added.
8.33 	(19) "Leasehold common interest community" means a common
8.34 	interest community in which all or a portion of the real estate
8.35 	is subject to a lease the expiration or termination of which
8.36 	will terminate the common interest community or reduce its size.
9.1 	(20) "Limited common element" means a portion of the common
9.2 	elements allocated by the declaration or by operation of section
9.3 	515B.2-102(d) or (f) for the exclusive use of one or more but
9.4 	fewer than all of the units.
9.5 	(21) "Master association" means an entity created on or
9.6 	after June 1, 1994, that directly or indirectly exercises any of
9.7 	the powers set forth in section 515B.3-102 on behalf of one or
9.8 	more members described in section 515B.2-121(b), (i), (ii) or
9.9 	(iii), whether or not it also exercises those powers on behalf
9.10 	of one or more property owners owner's associations described in
9.11 	section 515B.2-121(b)(iv).  A person (i) hired by an association
9.12 	to perform maintenance, repair, accounting, bookkeeping or
9.13 	management services, or (ii) granted authority under an
9.14 	instrument recorded primarily for the purpose of creating rights
9.15 	or obligations with respect to utilities, access, drainage, or
9.16 	recreational amenities, is not, solely by reason of that
9.17 	relationship, a master association.
9.18 	(22) "Master declaration" means a written instrument,
9.19 	however named, (i) recorded on or after June 1, 1994, against
9.20 	property subject to powers exercised by a master association and
9.21 	(ii) satisfying the requirements of complying with section
9.22 	515B.2-121, subsection (f)(1).
9.23 	(23) "Period of declarant control" means the time period
9.24 	provided for in section 515B.3-103(c) during which the declarant
9.25 	may appoint and remove officers and directors of the association.
9.26 	(24) "Person" means an individual, corporation, limited
9.27 	liability company, partnership, trustee under a trust, personal
9.28 	representative, guardian, conservator, government, governmental
9.29 	subdivision or agency, or other legal or commercial entity
9.30 	capable of holding title to real estate.
9.31 	(25) "Planned community" means a common interest community
9.32 	that is not a condominium or a cooperative.  A condominium or
9.33 	cooperative may be a part of a planned community.
9.34 	(26) "Proprietary lease" means an agreement with a
9.35 	cooperative association whereby a member of the association is
9.36 	entitled to exclusive possession of a unit in the cooperative.
10.1 	(27) "Purchaser" means a person, other than a declarant,
10.2 	who by means of a voluntary transfer acquires a legal or
10.3 	equitable interest in a unit other than (i) a leasehold interest
10.4 	of less than 20 years, including renewal options, or (ii) a
10.5 	security interest.
10.6 	(28) "Real estate" means any fee simple, leasehold or other
10.7 	estate or interest in, over, or under land, including
10.8 	structures, fixtures, and other improvements and interests that
10.9 	by custom, usage, or law pass with a conveyance of land though
10.10 	not described in the contract of sale or instrument of
10.11 	conveyance.  "Real estate" may include spaces with or without
10.12 	upper or lower boundaries, or spaces without physical boundaries.
10.13 	(29) "Residential use" means use as a dwelling, whether
10.14 	primary, secondary or seasonal, but not transient use such as
10.15 	hotels or motels.
10.16 	(30) "Secured party" means the person owning a security
10.17 	interest as defined in paragraph (31).
10.18 	(31) "Security interest" means a perfected interest in real
10.19 	estate or personal property, created by contract or conveyance,
10.20 	which secures payment or performance of an obligation.  The term
10.21 	includes a mortgagee's interest in a mortgage, a vendor's
10.22 	interest in a contract for deed, a lessor's interest in a lease
10.23 	intended as security, a holder's interest in a sheriff's
10.24 	certificate of sale during the period of redemption, an
10.25 	assignee's interest in an assignment of leases or rents intended
10.26 	as security, a lender's interest in a cooperative share loan, a
10.27 	pledgee's interest in the pledge of an ownership interest, or
10.28 	any other interest intended as security for an obligation under
10.29 	a written agreement.
10.30 	(32) "Special declarant rights" means rights reserved in
10.31 	the declaration for the benefit of a declarant to:
10.32 	(i) complete improvements indicated on the CIC plat,
10.33 	planned by the declarant consistent with the disclosure
10.34 	statement or authorized by the municipality in which the CIC is
10.35 	located;
10.36 	(ii) add additional real estate to a common interest
11.1 	community;
11.2 	(iii) subdivide or combine units,or convert units into
11.3 	common elements, limited common elements and/or units;
11.4 	(iv) maintain sales offices, management offices, signs
11.5 	advertising the common interest community, and models;
11.6 	(v) use easements through the common elements for the
11.7 	purpose of making improvements within the common interest
11.8 	community or any additional real estate;
11.9 	(vi) create a master association and provide for the
11.10 	exercise of authority by the master association over the common
11.11 	interest community or its unit owners;
11.12 	(vii) merge or consolidate a common interest community with
11.13 	another common interest community of the same form of ownership;
11.14 	or
11.15 	(viii) appoint or remove any officer or director of the
11.16 	association, or the master association where applicable, during
11.17 	any period of declarant control.
11.18 	(33) "Time share" means a right to occupy a unit or any of
11.19 	several units during three or more separate time periods over a
11.20 	period of at least three years, including renewal options,
11.21 	whether or not coupled with an estate or interest in a common
11.22 	interest community or a specified portion thereof.
11.23 	(34) "Unit" means a physical portion of a common interest
11.24 	community the boundaries of which are described in the common
11.25 	interest community's declaration and which is intended for
11.26 	separate ownership or separate occupancy pursuant to a
11.27 	proprietary lease.
11.28 	(35) "Unit identifier" means English letters or Arabic
11.29 	numerals, or a combination thereof, which identify only one unit
11.30 	in a common interest community and which meet the requirements
11.31 	of section 515B.2-104.
11.32 	(36) "Unit owner" means a declarant or other person who
11.33 	owns a unit, a lessee under a proprietary lease,or a lessee of
11.34 	a unit in a leasehold common interest community whose lease
11.35 	expires simultaneously with any lease the expiration or
11.36 	termination of which will remove the unit from the common
12.1 	interest community, but does not include a secured party.  In a
12.2 	common interest community, the declarant is the unit owner of a
12.3 	unit until that unit has been conveyed to another person.

12.4 	Sec. 3. Minnesota Statutes 2004, section 515B.1-106, is
12.5 	amended to read:
12.6 	515B.1-106 APPLICABILITY OF LOCAL REQUIREMENTS.
12.7 	(a) Except as provided in subsections (b) and (c), a
12.8 	zoning, subdivision, building code, or other real estate use
12.9 	law, ordinance, charter provision, or regulation may not
12.10 	directly or indirectly prohibit the common interest community
12.11 	form of ownership or impose any requirement upon a common
12.12 	interest community, upon the creation or disposition of a common
12.13 	interest community or upon any part of the common interest
12.14 	community conversion process which it would not impose upon a
12.15 	physically similar development under a different form of
12.16 	ownership.  Otherwise, no provision of this chapter invalidates
12.17 	or modifies any provision of any zoning, subdivision, building
12.18 	code, or other real estate use law, ordinance, charter
12.19 	provision, or regulation.
12.20 	(b) Subsection (a) shall not apply to any ordinance, rule,
12.21 	regulation, charter provision or contract provision relating to
12.22 	the financing of housing construction, rehabilitation, or
12.23 	purchases provided by or through a housing finance program
12.24 	established and operated pursuant to state or federal law by a
12.25 	state or local agency or local unit of government.
12.26 	(c) A statutory or home rule charter city, pursuant to an
12.27 	ordinance or charter provision establishing standards to be
12.28 	applied uniformly within its jurisdiction, may prohibit or
12.29 	impose reasonable conditions upon the conversion of
12.30 	buildings occupied wholly or partially for residential use to
12.31 	the common interest community form of ownership only if there
12.32 	exists within the city a significant shortage of suitable rental
12.33 	dwellings available to low and moderate income individuals or
12.34 	families or to establish or maintain the city's eligibility for
12.35 	any federal or state program providing direct or indirect
12.36 	financial assistance for housing to the city.  Prior to the
13.1 	adoption of an ordinance pursuant to the authority granted in
13.2 	this subsection, the city shall conduct a public hearing.  Any
13.3 	ordinance or charter provision adopted pursuant to this
13.4 	subsection shall not apply to any existing or proposed
13.5 	conversion common interest community (i) for which a bona fide
13.6 	loan commitment for a consideration has been issued by a lender
13.7 	and is in effect on the date of adoption of the ordinance or
13.8 	charter provision, or (ii) for which a notice of conversion or
13.9 	intent to convert required by section 515B.4-111, containing a
13.10 	termination of tenancy, has been given to at least 75 percent of
13.11 	the tenants and subtenants in possession prior to the date of
13.12 	adoption of the ordinance or charter provision.
13.13 	(d) For purposes of providing marketable title, a statement
13.14 	in the declaration that the common interest community is not
13.15 	subject to an ordinance or that any conditions required under an
13.16 	ordinance have been complied with shall be prima facie evidence
13.17 	that the common interest community was not created in violation
13.18 	of the ordinance.
13.19 	(e) A violation of an ordinance or charter provision
13.20 	adopted pursuant to the provisions of subsection (b) or (c)
13.21 	shall not affect the validity of a common interest community.
13.22 	This subsection shall not be construed to in any way limit the
13.23 	power of a city to enforce the provisions of an ordinance or
13.24 	charter provision adopted pursuant to subsection (b) or (c).
13.25 	(f) Any ordinance or charter provision enacted hereunder
13.26 	shall not be effective for a period exceeding 18 months.

13.27 	Sec. 4. Minnesota Statutes 2004, section 515B.1-107, is
13.28 	amended to read:
13.29 	515B.1-107 EMINENT DOMAIN.
13.30 	(a) If a unit is acquired by eminent domain, or if part of
13.31 	a unit is acquired by eminent domain leaving the unit owner with
13.32 	a remnant which may not practically or lawfully be used for any
13.33 	material purpose permitted by the declaration, the award shall
13.34 	compensate the unit owner and secured party in the unit as their
13.35 	interests may appear, whether or not any common element interest
13.36 	is acquired.  Upon acquisition, unless the order or final
14.1 	certificate otherwise provides, that unit's allocated interests
14.2 	are automatically reallocated among the remaining units in
14.3 	proportion to their respective allocated interests prior to the
14.4 	taking, and the association shall promptly prepare, execute, and
14.5 	record an amendment to the declaration reflecting the
14.6 	allocations.  Any remnant of a unit remaining after part of a
14.7 	unit is taken under this subsection is thereafter a common
14.8 	element.
14.9 	(b) Except as provided in subsection (a), if part of a unit
14.10 	is acquired by eminent domain, the award shall compensate the
14.11 	unit owner and secured party for the reduction in value of the
14.12 	unit and its interest in the common elements, whether or not any
14.13 	common elements are acquired.  Upon acquisition, unless the
14.14 	order or final certificate otherwise provides, (i) that unit's
14.15 	allocated interests are reduced in proportion to the reduction
14.16 	in the size of the unit, or on any other basis specified in the
14.17 	declaration and (ii) the portion of the allocated interests
14.18 	divested from the partially acquired unit are automatically
14.19 	reallocated to that unit and to the remaining units in
14.20 	proportion to the respective allocated interests of those units
14.21 	before the taking, with the partially acquired unit
14.22 	participating in the reallocation on the basis of its reduced
14.23 	allocated interests.
14.24 	(c) If part of the common elements is acquired by eminent
14.25 	domain, the portion of the award attributable to the common
14.26 	elements taken shall be paid to the association. In an eminent
14.27 	domain proceeding which seeks to acquire a part of the common
14.28 	elements, jurisdiction may be acquired by service of process
14.29 	upon the association.Unless the declaration provides
14.30 	otherwise, any portion of the award attributable to the
14.31 	acquisition of a limited common element shall be equally divided
14.32 	among the owners of the units to which that limited common
14.33 	element was allocated at the time of acquisition and their
14.34 	secured parties, as their interests may appear or as provided by
14.35 	the declaration.
14.36 	(d) In any eminent domain proceeding the units shall be
15.1 	treated as separate parcels of real estate for valuation
15.2 	purposes, regardless of the number of units subject to the
15.3 	proceeding.
15.4 	(e) Any distribution to a unit owner from the proceeds of
15.5 	an eminent domain award shall be subject to any limitations
15.6 	imposed by the declaration or bylaws.
15.7 	(f) The court order or final certificate containing the
15.8 	final awards shall be recorded in every county in which any
15.9 	portion of the common interest community is located.

15.10 	Sec. 5. Minnesota Statutes 2004, section 515B.1-116, is
15.11 	amended to read:
15.12 	515B.1-116 RECORDING.
15.13 	(a) A declaration, bylaws, any amendment to a declaration
15.14 	or bylaws, and any other instrument affecting a common interest
15.15 	community shall be entitled to be recorded.  In those counties
15.16 	which have a tract index, the county recorder shall enter the
15.17 	declaration in the tract index for each unit or other tract 
15.18 	affected. The county recorder shall not enter the declaration
15.19 	in the tract index for lands described as additional real
15.20 	estate, unless such lands are added to the common interest
15.21 	community pursuant to section 515B.2-111.The registrar of
15.22 	titles shall file the declaration in accordance with section
15.23 	508.351 or 508A.351. The registrar of titles shall not file the
15.24 	declaration upon certificates of title for lands described as
15.25 	additional real estate, unless such lands are added to the
15.26 	common interest community pursuant to section 515B.2-111.
15.27 	(b) The recording officer shall upon request promptly
15.28 	assign a number (CIC number) to a common interest community to
15.29 	be formed or to a common interest community resulting from the
15.30 	merger of two or more common interest communities.
15.31 	(c) Documents recorded pursuant to this chapter shall in
15.32 	the case of registered land be filed, and references to the
15.33 	recording of documents shall mean filed in the case of
15.34 	registered land.
15.35 	(d) Subject to any specific requirements of this chapter,
15.36 	if a recorded document relating to a common interest
16.1 	community or a master association purports to require a certain
16.2 	vote or signatures approving any restatement or amendment of the
16.3 	document by a certain number or percentage of unit owners or
16.4 	secured parties, and if the amendment or restatement is to be
16.5 	recorded pursuant to this chapter, an affidavit of the president
16.6 	or secretary of the association stating that the required vote
16.7 	or signatures have been obtained shall be attached to the
16.8 	document to be recorded and shall constitute prima facie
16.9 	evidence of the representations contained therein.
16.10 	(e) If a common interest community is located on registered
16.11 	land, the recording fee for any document affecting two or more
16.12 	units shall be the then-current fee for registering the document
16.13 	on the certificates of title for the first ten affected
16.14 	certificates and one-third of the then-current fee for each
16.15 	additional affected certificate.  This provision shall not apply
16.16 	to recording fees for deeds of conveyance, with the exception of
16.17 	deeds given pursuant to sections 515B.2-119 and 515B.3-112. The
16.18 	same fees shall apply to recording any document affecting two or
16.19 	more units or other parcels of real estate subject to a master
16.20 	declaration.
16.21 	(f) Except as permitted under this subsection, a recording
16.22 	officer shall not file or record a declaration creating a new
16.23 	common interest community, unless the county treasurer has
16.24 	certified that the property taxes payable in the current year
16.25 	for the real estate included in the proposed common interest
16.26 	community have been paid.  This certification is in addition to
16.27 	the certification for delinquent taxes required by section
16.28 	272.12.  In the case of preexisting common interest communities,
16.29 	the recording officer shall accept, file, and record the
16.30 	following instruments, without requiring a certification as to
16.31 	the current or delinquent taxes on any of the units in the
16.32 	common interest community:  (i) a declaration subjecting the
16.33 	common interest community to this chapter; (ii) a declaration
16.34 	changing the form of a common interest community pursuant to
16.35 	section 515B.2-123; or (iii) an amendment to or restatement of
16.36 	the declaration, bylaws, or CIC plat.  In order for an
17.1 	instrument to be accepted and recorded under the preceding
17.2 	sentence, the instrument must not create or change unit or
17.3 	common area boundaries.

17.4 	Sec. 6. Minnesota Statutes 2004, section 515B.2-101, is
17.5 	amended to read:
17.6 	515B.2-101 CREATION OF COMMON INTEREST COMMUNITIES.
17.7 	(a) On and after June 1, 1994, a common interest community
17.8 	may be created only as follows:
17.9 	(1) A condominium may be created only by recording a
17.10 	declaration.
17.11 	(2) A cooperative may be created only by recording a
17.12 	declaration and by recording a conveyance of the real estate
17.13 	subject to that declaration to the association.
17.14 	(3) A planned community which includes common elements may
17.15 	be created only by simultaneously recording a declaration and a
17.16 	conveyance of the common elements subject to that declaration to
17.17 	the association.
17.18 	(4) A planned community without common elements may be
17.19 	created only by recording a declaration.
17.20 	(b) Except as otherwise expressly provided in this chapter,
17.21 	the declaration shall be executed by all persons whose interests
17.22 	in the real estate will be conveyed to unit owners or to the
17.23 	association, except vendors under contracts for deed, and by
17.24 	every lessor of a lease the expiration or termination of which
17.25 	will terminate the common interest community.  The declaration
17.26 	shall be recorded in every county in which any portion of the
17.27 	common interest community is located.  Failure of any party not
17.28 	required to execute a declaration, but having a recorded
17.29 	interest in the common interest community, to join in the
17.30 	declaration shall have no effect on the validity of the common
17.31 	interest community; provided that the party is not bound by the
17.32 	declaration until that party acknowledges the existence of the
17.33 	common interest community in a recorded instrument.
17.34 	(c) In a condominium, a planned community utilizing a CIC
17.35 	plat complying with section 515B.2-110(c),or real estate a 
17.36 	cooperative where the unit boundaries are delineated by
18.1 	a physical structure, a declaration, or an amendment to a
18.2 	declaration adding units, shall not be recorded unless all the 
18.3 	structural components of the structures containing the units and
18.4 	the mechanical systems serving more than one unit in all
18.5 	buildings containing the units thereby created, but not the
18.6 	units, are substantially completed, as evidenced by a recorded
18.7 	certificate executed by a registered engineer or architect.
18.8 	(d) A project which (i) meets the definition of a "common
18.9 	interest community" in section 515B.1-103(10), (ii) is created
18.10 	after May 31, 1994, and (iii) is not exempt under section
18.11 	515B.1-102(e), is subject to this chapter even if this or other
18.12 	sections of the chapter have not been complied with, and the
18.13 	declarant and all unit owners are bound by all requirements and
18.14 	obligations of this chapter.
18.15 	(e) The association shall be incorporated pursuant to
18.16 	section 515B.3-101 and the CIC plat shall be recorded as and if
18.17 	required by section 515B.2-110.

18.18 	Sec. 7. Minnesota Statutes 2004, section 515B.2-102, is
18.19 	amended to read:
18.20 	515B.2-102 UNIT BOUNDARIES.
18.21 	(a) The declaration shall describe the boundaries of the
18.22 	units as provided in section 515B.2-105(5).  The boundaries need
18.23 	not be delineated by a physical structure.  The unit may consist
18.24 	of noncontiguous portions of the common interest community.
18.25 	(b) In a condominium or , a cooperative, or a planned
18.26 	community utilizing a CIC plat complying with section
18.27 	515B.2-110(c), except as the declaration otherwise provides, if
18.28 	the walls, floors, or ceilings of a unit are designated as its
18.29 	boundaries, then the boundaries shall be the interior,
18.30 	unfinished surfaces of the perimeter walls, floors and ,
18.31 	ceilings, doors, windows, and door and window frames of the unit.
18.32 	All paneling, tiles, wallpaper, paint, floor covering, and any
18.33 	other finishing materials applied to the interior surfaces of
18.34 	the perimeter walls, floors or ceilings, are a part of the unit,
18.35 	and all other portions of the perimeter walls, floors, or 
18.36 	ceilings, including perimeter doors and ,windows, and their 
19.1 	door and window frames, are a part of the common elements.
19.2 	(c) In a planned community, except as the declaration
19.3 	otherwise provides utilizing a CIC plat complying with section
19.4 	515B.2-110(d)(1) and (2), the unit boundaries shall be
19.5 	the boundary lines as designated on a plat recorded pursuant to
19.6 	chapter 505 or on a registered land survey filed lot lines
19.7 	designated on a plat recorded pursuant to chapter 508 or
19.8 	508A 505.
19.9 	(d) If any chute, flue, duct, wire, pipe,conduit, bearing
19.10 	wall, bearing column, or any other fixture serving fewer than
19.11 	all units lies partially within and partially outside of
19.12 	the designated boundaries of a the unit or units served, any
19.13 	portion thereof serving only that unit or units is a limited
19.14 	common element allocated solely to that unit or units, and any
19.15 	portion thereof serving more than one unit or any portion of the
19.16 	common elements is a part of the common elements.
19.17 	(e) Subject to subsection (d), all spaces, interior
19.18 	partitions, and other fixtures and improvements within the
19.19 	boundaries of a unit are a part of the unit.
19.20 	(f) Improvements such as shutters, awnings, window boxes,
19.21 	doorsteps, stoops, porches, balconies, decks, patios, perimeter
19.22 	doors and windows, and their frames,constructed as part of the
19.23 	original construction to serve a single unit, and authorized
19.24 	replacements and modifications thereof, if located wholly or
19.25 	partially outside the unit's boundaries, are limited common
19.26 	elements allocated exclusively to that unit.

19.27 	Sec. 8. Minnesota Statutes 2004, section 515B.2-104, is
19.28 	amended to read:
19.29 	515B.2-104 DESCRIPTION OF UNITS.
19.30 	(a) A description of a unit is legally sufficient if it
19.31 	sets forth (i) the unit identifier of the unit, (ii) the number
19.32 	assigned to the common interest community by the recording
19.33 	officer, and (iii) the county in which the unit is located.
19.34 	(b) If the CIC plat for a planned community complies with
19.35 	chapter 505, 508, or 508A, then a description of a unit in the
19.36 	planned community is legally sufficient if it is stated in terms
20.1 	of a plat or registered land survey.  In planned communities
20.2 	whose CIC plats comply with section 515B.2-110(c), and in all
20.3 	condominiums and cooperatives created under this chapter, a unit
20.4 	identifier shall contain no more than six characters, only one
20.5 	of which may be a letter.
20.6 	(c) A description which conforms to the requirements of 
20.7 	complies with this section shall be deemed to include all
20.8 	rights, obligations, and interests appurtenant to the unit which
20.9 	were created by the declaration or bylaws, by a master
20.10 	declaration,or by this chapter, whether or not those rights,
20.11 	obligations, or interests are expressly described.
20.12 	(d) If the CIC plat for a planned community complies with
20.13 	section 515B.2-110(c) a description of the common elements is
20.14 	legally sufficient if it sets forth (i) the words "common
20.15 	elements," (ii) the number assigned to the common interest
20.16 	community by the recording officer, and (iii) the county in
20.17 	which the common elements are located.  The common elements may
20.18 	consist of separate parcels of real estate, in which case each
20.19 	parcel shall be separately identified on the CIC plat and in any
20.20 	recorded instrument referencing a separate parcel of the common
20.21 	elements.

20.22 	Sec. 9. Minnesota Statutes 2004, section 515B.2-106, is
20.23 	amended to read:
20.24 	515B.2-106 DECLARATION OF FLEXIBLE COMMON INTEREST
20.25 	COMMUNITIES.
20.26 	(a) The declaration for a flexible common interest
20.27 	community shall include, in addition to the matters specified in
20.28 	section 515B.2-105:
20.29 	(1) a reservation of any rights to add additional real
20.30 	estate;
20.31 	(2) a statement of any time limit, not exceeding ten years
20.32 	after the recording of the declaration, upon which any right
20.33 	reserved under paragraph (1) will lapse, together with a
20.34 	statement of any circumstances that will terminate the option
20.35 	before the expiration of the time limit.  If no time limit is
20.36 	set forth in the declaration, the time limit shall be ten years
21.1 	after the recording of the declaration; provided, that the time
21.2 	limit may be extended by an amendment to the declaration
21.3 	approved in writing by the declarant, and by the vote or written
21.4 	agreement of unit owners, other than the declarant or an
21.5 	affiliate of the declarant, to whose units are allocated at
21.6 	least 67 percent of the votes in the association;
21.7 	(3) a statement of any limitations on any rights reserved
21.8 	under paragraph (1), other than limitations created by or
21.9 	imposed pursuant to law;
21.10 	(4) a legally sufficient description of the additional real
21.11 	estate;
21.12 	(5) a statement as to whether portions of any additional
21.13 	real estate may be added at different times;
21.14 	(6) a statement of (i) the maximum number of units, based
21.15 	upon the declarant's good faith estimate,that may be created
21.16 	within any additional real estate, and (ii) how many of those
21.17 	units will be restricted to residential use;
21.18 	(7) a statement that any buildings and units erected upon
21.19 	the additional real estate, when and if added, will be
21.20 	compatible with the other buildings and units in the common
21.21 	interest community in terms of architectural style, quality of
21.22 	construction, principal materials employed in construction, and
21.23 	size, or a statement of any differences with respect to the
21.24 	buildings or units, or a statement that no assurances are made
21.25 	in those regards;
21.26 	(8) a statement that all restrictions in the declaration
21.27 	affecting use, occupancy, and alienation of units will apply to
21.28 	units created in the additional real estate, when and if added,
21.29 	or a statement of any differences with respect to the additional
21.30 	units;
21.31 	(9) a statement as to whether any assurances made in the
21.32 	declaration regarding additional real estate pursuant to
21.33 	paragraphs (5) through (8) will apply if the real estate is not
21.34 	added to the common interest community.
21.35 	(b) A declarant need not have an interest in the additional
21.36 	real estate in order to identify it as such in the declaration,
22.1 	and the recording officer shall index the declaration as
22.2 	provided in section 515B.1-116(a).  Identification of additional
22.3 	real estate in the declaration does not encumber or otherwise
22.4 	affect the title to the additional real estate.

22.5 	Sec. 10. Minnesota Statutes 2004, section 515B.2-108, is
22.6 	amended to read:
22.7 	515B.2-108 ALLOCATION OF INTERESTS.
22.8 	(a) The declaration shall allocate to each unit:
22.9 	(1) in a condominium, a fraction or percentage of undivided
22.10 	interests in the common elements and in the common expenses of
22.11 	the association and a portion of the votes in the association;
22.12 	(2) in a cooperative, an ownership interest in the
22.13 	association, a fraction or percentage of the common expenses of
22.14 	the association and a portion of the votes in the association;
22.15 	and
22.16 	(3) in a planned community, a fraction or percentage of the
22.17 	common expenses of the association and a portion of the votes in
22.18 	the association.
22.19 	(b) The declaration shall state the formulas used to
22.20 	establish allocations of interests.  If the fractions or
22.21 	percentages are all equal the declaration may so state in lieu
22.22 	of stating the fractions or percentages. If equality is
22.23 	designated by The declaration as the formula for the allocation
22.24 	of votes,need not allocate votes do not attach to units that
22.25 	are auxiliary to other units, such as garage units or storage
22.26 	units.  The allocations shall not discriminate in favor of units
22.27 	owned by the declarant or an affiliate of the declarant, except
22.28 	as provided in sections 515B.2-121 and 515B.3-115.
22.29 	(c) If units may be added to the common interest community,
22.30 	the declaration shall state the formulas to be used to
22.31 	reallocate the allocated interests among all units included in
22.32 	the common interest community after the addition shall be the
22.33 	formulas stated in the declaration.
22.34 	(d) The declaration may authorize special allocations:  (i)
22.35 	of unit owner votes among certain units or classes of units on
22.36 	particular matters specified in the declaration, or (ii) of
23.1 	common expenses among certain units or classes of units on
23.2 	particular matters specified in the declaration.  Special
23.3 	allocations may only be used to address operational, physical or
23.4 	administrative differences within the common interest
23.5 	community.  A declarant may not utilize special allocations for
23.6 	the purpose of evading any limitation or obligation imposed on
23.7 	declarants by this chapter nor may units constitute a class
23.8 	because they are owned by a declarant.
23.9 	(e) The sum of each category of allocated interests
23.10 	allocated at any time to all the units must equal one if stated
23.11 	as a fraction or 100 percent if stated as a percentage.  In the
23.12 	event of a discrepancy between an allocated interest and the
23.13 	result derived from application of the pertinent formula, the
23.14 	allocated interest prevails.
23.15 	(f) In a condominium or planned community, the common
23.16 	elements are not subject to partition, and any purported
23.17 	conveyance, encumbrance, judicial sale, or other voluntary or
23.18 	involuntary transfer of an undivided interest in the common
23.19 	elements made without the unit to which that interest is
23.20 	allocated is void.  The granting of easements, licenses or
23.21 	leases pursuant to section 515B.3-102 shall not constitute a
23.22 	partition.
23.23 	(g) In a cooperative, any purported conveyance,
23.24 	encumbrance, judicial sale, or other voluntary or involuntary
23.25 	transfer of an ownership interest in the association made
23.26 	without the possessory interest in the unit to which that
23.27 	interest is related is void.

23.28 	Sec. 11. Minnesota Statutes 2004, section 515B.2-110, is
23.29 	amended to read:
23.30 	515B.2-110 COMMON INTEREST COMMUNITY PLAT (CIC PLAT).
23.31 	(a) A CIC plat is required for condominiums and planned
23.32 	communities, and cooperatives in which the unit owners'
23.33 	interests are characterized as real estate.  The CIC plat is a
23.34 	part of the declaration in condominiums, in planned communities
23.35 	utilizing a CIC plat complying with subsection (c),and in
23.36 	cooperatives in which the unit owners' interests are
24.1 	characterized as real estate, but need not be physically
24.2 	attached to the declaration.
24.3 	(1) In a condominium, or a cooperative in which the unit
24.4 	owners' interests are characterized as real estate, the CIC plat
24.5 	shall comply with subsection (c).
24.6 	(2) In a planned community, a CIC plat which does not
24.7 	comply with subsection (c) shall consist of all or part of a
24.8 	subdivision plat or plats complying with subsections (d)(1) and
24.9 	(d)(2).  The CIC plat need not contain the number of the common
24.10 	interest community and may be recorded at any time at or before
24.11 	the time of recording of the declaration.; provided, that if the
24.12 	CIC plat for the planned community complies with subsection (c),
24.13 	the number of the common interest community shall be included
24.14 	and the CIC plat shall be recorded at the time of recording of
24.15 	the declaration.
24.16 	(3) In a cooperative in which the unit owners' interests
24.17 	are characterized as personal property, a CIC plat shall not be
24.18 	required.  In lieu of a CIC plat, the declaration or any
24.19 	amendment to it creating, converting, or subdividing units in a
24.20 	personal property cooperative shall include an exhibit
24.21 	containing a scale drawing of each building, identifying the
24.22 	building, and showing the perimeter walls of each unit created
24.23 	or changed by the declaration or any amendment to it, including
24.24 	the unit's unit identifier, and its location within the building
24.25 	if the building contains more than one unit.
24.26 	(b) The CIC plat, or supplemental or amended CIC plat,for
24.27 	condominiums, for planned communities using a plat complying
24.28 	with subsection (c), and for cooperatives in which the unit
24.29 	owners' interests are characterized as real estate, shall
24.30 	contain certifications by a registered professional land
24.31 	surveyor and registered professional architect, as to the parts
24.32 	of the CIC plat prepared by each, that (i) the CIC plat
24.33 	accurately depicts all information required by this section, and
24.34 	(ii) the work was undertaken by, or reviewed and approved by,
24.35 	the certifying land surveyor or architect.  The portions of the
24.36 	CIC plat depicting the dimensions of the portions of the common
25.1 	interest community described in subsections (c)(8), (9), (10),
25.2 	and (12), may be prepared by either a land surveyor or an
25.3 	architect.  The other portions of the CIC plat shall be prepared
25.4 	only by a land surveyor.  A certification of the CIC plat or an
25.5 	amendment to it under this subsection by an architect is not
25.6 	required if all parts of the CIC plat or amendment are prepared
25.7 	by a land surveyor.  Certification by the land surveyor or
25.8 	architect does not constitute a guaranty or warranty of the
25.9 	nature, suitability, or quality of construction of any
25.10 	improvements located or to be located in the common interest
25.11 	community.
25.12 	(c) A CIC plat for a condominium,or a cooperative in which
25.13 	the unit owners' interests are characterized as real estate,
25.14 	shall show:
25.15 	(1) the number of the common interest community, and the
25.16 	boundaries, dimensions and a legally sufficient description of
25.17 	the land included therein;
25.18 	(2) the dimensions and location of all existing, material
25.19 	structural improvements and roadways;
25.20 	(3) the intended location and dimensions of any
25.21 	contemplated common element improvements to be constructed
25.22 	within the common interest community after the filing of the CIC
25.23 	plat, labeled either "MUST BE BUILT" or "NEED NOT BE BUILT";
25.24 	(4) the location and dimensions of any additional real
25.25 	estate, labeled as such, and a legally sufficient description of
25.26 	the additional real estate;
25.27 	(5) the extent of any encroachments by or upon any portion
25.28 	of the common interest community;
25.29 	(6) the location and dimensions of all recorded easements
25.30 	within the land included in the common interest community
25.31 	serving or burdening any portion of the common interest
25.32 	community land;
25.33 	(7) the distance and direction between noncontiguous
25.34 	parcels of real estate;
25.35 	(8) the location and dimensions of limited common elements,
25.36 	except that with respect to limited common elements described in
26.1 	section 515B.2-102, subsections (d) and (f), only such material
26.2 	limited common elements as porches, balconies, decks, patios,
26.3 	and garages shall be shown;
26.4 	(9) the location and dimensions of the front, rear, and
26.5 	side boundaries of each unit and that unit's unit identifier;
26.6 	(10) the location and dimensions of the upper and lower
26.7 	boundaries of each unit with reference to an established or
26.8 	assumed datum and that unit's unit identifier;
26.9 	(11) a legally sufficient description of any real estate in
26.10 	which the unit owners will own only an estate for years, labeled
26.11 	as "leasehold real estate";
26.12 	(12) any units which may be converted by the declarant to
26.13 	create additional units or common elements identified separately.
26.14 	(d) A CIC plat for a planned community either shall comply
26.15 	with subsection (c),or it shall:
26.16 	(1) satisfy the requirements of comply with chapter 505,
26.17 	508, or 508A, as applicable; and
26.18 	(2) satisfy comply with the platting requirements of any
26.19 	governmental authority within whose jurisdiction the planned
26.20 	community is located, subject to the limitations set forth in
26.21 	section 515B.1-106.
26.22 	(e) If a declarant adds additional real estate, the
26.23 	declarant shall record a supplemental CIC plat or plats for the
26.24 	real estate being added, conforming to the requirements of this
26.25 	section which apply to the type of common interest community in
26.26 	question.  If less than all additional real estate is being
26.27 	added, the supplemental CIC plat for a condominium, a planned
26.28 	community whose CIC plat complies with subsection (c), or a
26.29 	cooperative in which the unit owners' interests are
26.30 	characterized as real estate, shall also show the location and
26.31 	dimensions of the remaining portion.
26.32 	(f) If, pursuant to section 515B.2-112,a declarant
26.33 	subdivides or converts any unit into two or more units, common
26.34 	elements or limited common elements, or combines two or more
26.35 	units,the declarant shall record an amendment to the CIC plat
26.36 	showing the location and dimensions of any new units, common
27.1 	elements and or limited common elements thus created.
27.2 	(g) A CIC plat which complies with subsection (c) is not
27.3 	subject to chapter 505.

27.4 	Sec. 12. Minnesota Statutes 2004, section 515B.2-111, is
27.5 	amended to read:
27.6 	515B.2-111 EXPANSION OF FLEXIBLE COMMON INTEREST
27.7 	COMMUNITY.
27.8 	(a) To add additional real estate pursuant to a right
27.9 	reserved under section 515B.2-106(1) 515B.2-106(a)(1), the
27.10 	declarant and all persons whose interests in the additional real
27.11 	estate will be conveyed to unit owners or the association,
27.12 	except vendors under a contract for deed, shall execute and
27.13 	record an amendment to the a supplemental declaration as
27.14 	provided in this section.  The amendment to the supplemental 
27.15 	declaration shall be titled a "supplemental declaration," shall
27.16 	be limited to matters authorized by this section, and shall
27.17 	include:
27.18 	(1) assign a unit identifier to each unit formed in the
27.19 	additional a legally sufficient description of the real estate
27.20 	added by the supplemental declaration;
27.21 	(2) reallocate a description of the boundaries of each unit
27.22 	created by the supplemental declaration, consistent with the
27.23 	declaration, and the unit's unit identifier;
27.24 	(3) in a planned community containing common elements, a
27.25 	legally sufficient description of the common elements;
27.26 	(4) a reallocation of the common element interests, votes
27.27 	in the association, and common expense liabilities as
27.28 	applicable,in compliance with the declaration and section
27.29 	515B.2-108;
27.30 	(3) describe (5) a description of any limited common
27.31 	elements formed out of the additional real estate, designating
27.32 	the unit to which each is allocated to the extent required by
27.33 	section 515B.2-109;
27.34 	(6) a statement as to whether or not the period of
27.35 	declarant control has terminated, regardless of the reason for
27.36 	such termination; and 
28.1 	(4) (7) contain such other provisions as may be reasonably 
28.2 	an attached affidavit attesting to the giving of the notice 
28.3 	required by the association; and subsection (b), if such notice
28.4 	is required.
28.5 	(5) conform to the applicable requirements of the
28.6 	declaration and the act.
28.7 	(b) If the period of declarant control has terminated,a
28.8 	declarant shall give notice of its intention to add additional
28.9 	real estate as follows:to the association (Attention:
28.10 	president of the association) by a notice given in the manner
28.11 	provided in section 515B.1-115 not less than 15 days prior to
28.12 	recording the supplemental declaration which adds the additional
28.13 	real estate.  A copy of the supplemental declaration shall be
28.14 	attached to the notice.  The supplemental declaration may be in
28.15 	proposed form; however, following notice, the supplemental
28.16 	declaration shall not be changed so as to materially and
28.17 	adversely affect the rights of unit owners or the association
28.18 	unless a new 15-day notice is given in accordance with this
28.19 	section.
28.20 	(1) If the period of declarant control has expired, to the
28.21 	association in the same manner as service of summons in a civil
28.22 	action in district court at least 15 days prior to recording the
28.23 	amendment.  A copy of the amendment shall be attached to the
28.24 	notice.
28.25 	(2) If the period of declarant control has not expired, to
28.26 	the unit owners by notice (one notice per unit) given in the
28.27 	manner provided in section 515B.1-115, not less than 15 days
28.28 	prior to recording the amendment, addressed to "Unit Owner
28.29 	Entitled to Legal Notice" at each unit or to the unit owner at
28.30 	such other address as may be designated by notice from the unit
28.31 	owner.  The declarant shall provide a copy of the amendment at
28.32 	no cost to any unit owner within five business days of the unit
28.33 	owner's request, and the notice shall include a statement to
28.34 	that effect.
28.35 	(3) Proof of notice to the association or the unit owners,
28.36 	as the case may be, shall be attached to the recorded
29.1 	amendment.  Following service of notice, the amendment shall not
29.2 	be changed so as to materially and adversely affect the rights
29.3 	of unit owners or the association.
29.4 	(c) A lien upon the additional real estate that is not also
29.5 	upon the existing common interest community is a lien only upon
29.6 	the units, and their respective interest in the common elements
29.7 	(if any), that are created from the additional real estate.
29.8 	Units within the common interest community as it existed prior
29.9 	to expansion are transferred free of liens that existed only
29.10 	upon the additional real estate, notwithstanding the fact that
29.11 	the interest in the common elements is a portion of the entire
29.12 	common interest community, including the additional real estate.
29.13 	(d) If a supplemental declaration in a planned community
29.14 	creates common elements, then a conveyance of the common
29.15 	elements to the association shall be recorded simultaneously
29.16 	with the supplemental declaration.  If a supplemental
29.17 	declaration adds additional real estate to a cooperative, then a
29.18 	conveyance of the additional real estate to the association
29.19 	shall be recorded simultaneously with the supplemental
29.20 	declaration.

29.21 	Sec. 13. Minnesota Statutes 2004, section 515B.2-112, is
29.22 	amended to read:
29.23 	515B.2-112 SUBDIVISION, COMBINATION,OR CONVERSION OF
29.24 	UNITS.
29.25 	(a) If the declaration so provides, (i) a unit owned by a
29.26 	person other than a declarant one or more units may be
29.27 	subdivided into two or more units or combined into a lesser
29.28 	number of units, or (ii) a unit or units owned exclusively by a
29.29 	declarant may be subdivided, combined,or converted into two one 
29.30 	or more units, limited common elements, common elements, or a
29.31 	combination of units, limited common elements or common
29.32 	elements, subject to subsections (b) and (c).
29.33 	(b) If a the unit is or units are not owned exclusively 
29.34 	by a unit owner other than a declarant, the unit owner owners of
29.35 	the units to be combined or subdivided shall prepare cause to be
29.36 	prepared and submit submitted to the association for approval an
30.1 	application for an amendment to the declaration and amended CIC
30.2 	plat, for the purpose of subdividing or combining the unit or
30.3 	units.  The application shall contain, at a minimum, a general
30.4 	description of the proposed subdivision or combination, and
30.5 	shall specify in detail the matters required by paragraphs
30.6 	(2) subsection (c)(2) and (3). The basis for disapproval of the
30.7 	application by the association shall be limited to (i) health or
30.8 	safety considerations, (ii) liability considerations for the
30.9 	association and other unit owners, (iii) aesthetic changes to
30.10 	the common elements or another unit, (iv) any material and
30.11 	adverse impact on the common elements or another unit, or (v) a
30.12 	failure to comply with the declaration, this chapter, or
30.13 	governmental laws, ordinances, or regulations.  The association
30.14 	shall give written notice of its decision and required changes
30.15 	to the unit owner or owners who made the application.The
30.16 	association shall establish fair and reasonable procedures and
30.17 	time frames for the submission and prompt processing of the
30.18 	applications.
30.19 	(c) If the an application under subsection (b) is approved,
30.20 	the unit owner shall cause an amendment and amended CIC plat to
30.21 	be prepared based upon the approved application.  The amendment
30.22 	shall:
30.23 	(1) be executed by the association and by each unit owner
30.24 	and any secured party with respect to the each unit to be
30.25 	combined or subdivided;
30.26 	(2) assign a unit identifier to each unit created resulting
30.27 	from the subdivision or combination;
30.28 	(3) reallocate the common element interest, votes in the
30.29 	association, and common expense liability, as applicable,
30.30 	formerly allocated to the unit or units to be combined or
30.31 	subdivided among the unit or units created resulting from the
30.32 	subdivision or combination on the basis of the formula described
30.33 	in the declaration; and 
30.34 	(4) contain such other provisions as may be reasonably
30.35 	required by the association; and 
30.36 	(5) conform to the requirements of the declaration and this
31.1 	chapter. The basis for disapproval shall be limited to (i)
31.2 	structural or safety considerations, (ii) liability
31.3 	considerations for the association and other unit owners, (iii)
31.4 	aesthetic considerations if the changes affect exterior portions
31.5 	of a structure, or (iv) a failure to comply with the
31.6 	declaration, this chapter, or governmental laws, ordinances or
31.7 	regulations.  The association shall give written notice of its
31.8 	decision and/or required changes to the unit owner.
31.9 	(d) If the association determines that the amendment
31.10 	conforms and amended CIC plat conform to the approved 
31.11 	application, the declaration,and this chapter, the association
31.12 	shall be obligated to execute the amendment and cooperate in its
31.13 	recording cause the amendment and the amended CIC plat to be
31.14 	recorded. The unit owner shall record the amendment and the
31.15 	amended CIC plat and deliver a copy of the recorded amendment
31.16 	and amended CIC plat to the association.The association may
31.17 	require the unit owners executing the amendment to pay all fees
31.18 	and costs for reviewing, preparing,and recording the amendment
31.19 	and the amended CIC plat, and any other fees or costs incurred
31.20 	by the association in connection therewith.
31.21 	(c) (e) If a the unit is or units are owned
31.22 	exclusively by a declarant, the declarant shall have the
31.23 	authority to unilaterally prepare and record,at its expense,an
31.24 	amendment and an amended CIC plat subdividing, combining,or
31.25 	converting the unit or units.  The amendment shall comply
31.26 	with the requirements of subsection (b)(1) subsections (c)(1),
31.27 	(2), (3),and (5) (4), and shall be limited to those provisions
31.28 	necessary to accomplish the subdivision, combination,or
31.29 	conversion unless the consent of unit owners required to amend
31.30 	the declaration is obtained.
31.31 	(d) If (f) The amended CIC plat shall show the resulting
31.32 	common elements, limited common elements or units, as
31.33 	subdivided, combined, or converted.
31.34 	(g) A secured party joins in the amendment pursuant to this
31.35 	section, its party's interest and remedies shall be deemed to
31.36 	apply to the unit or units and the common element interests that
32.1 	result from the subdivision or conversion combination of the
32.2 	unit or units in which the secured party held a security
32.3 	interest.  If the secured party enforces any remedy, including
32.4 	foreclosure of its lien, against any of the resulting 
32.5 	units created, all instruments and notices relating to the
32.6 	foreclosure shall describe the subject property in terms of
32.7 	the amendment and the amended descriptions CIC plat which
32.8 	created the resulting units.

32.9 	Sec. 14. Minnesota Statutes 2004, section 515B.2-113, is
32.10 	amended to read:
32.11 	515B.2-113 ALTERATIONS OF UNITS.
32.12 	(a) Subject to the provisions of the declaration and
32.13 	applicable law, a unit owner may, at the unit owner's expense,
32.14 	make any improvements or alterations to the unit, provided:  (i)
32.15 	that they do not impair the structural integrity or mechanical
32.16 	systems, affect the common elements, or impair the support of
32.17 	any portion of the common interest community; (ii) that prior
32.18 	arrangements are made with the association to ensure that other
32.19 	unit owners are not disturbed; (iii) that the common elements
32.20 	are not damaged; and (iv) that the common elements and other
32.21 	units are protected against mechanics' liens.
32.22 	(b) Subject to the provisions of applicable law, a unit
32.23 	owner of a unit in residential use may, at the unit owner's
32.24 	expense, make improvements or alterations to the unit as
32.25 	necessary for the full enjoyment of the unit by any person
32.26 	residing in the unit who has a handicap or disability, as
32.27 	provided in the Fair Housing Amendments Act, United States Code,
32.28 	title 42, section 3601, et seq., and the Minnesota Human Rights
32.29 	Act, chapter 363A, and any amendments to those acts.
32.30 	(c) The declaration, bylaws, rules, and regulations, or
32.31 	agreements with the association may not prohibit the
32.32 	improvements or alterations referred to in subsection (b), but
32.33 	may reasonably regulate the type, style, and quality of the
32.34 	improvements or alterations, as they relate to health, safety,
32.35 	and architectural standards.  In addition, improvements or
32.36 	alterations made pursuant to subsection (b) must satisfy the
33.1 	requirements of comply with subsection (a)(i), (ii), (iii), and
33.2 	(iv).
33.3 	(d) Notwithstanding any contrary provision of section
33.4 	515B.1-102, subsection (b) applies to all common interest
33.5 	communities subject to this chapter, chapter 515, or 515A.  The
33.6 	unit owner's rights under this section may not be waived.
33.7 	(e) Subsection (b) does not apply to restrictions on
33.8 	improvements or alterations imposed by statute, rule, or
33.9 	ordinance.
33.10 	(f) Subject to the provisions of the declaration and
33.11 	applicable law, a unit owner may, at the unit owner's expense,
33.12 	after acquiring title to an adjoining unit or an adjoining part
33.13 	of an adjoining unit, with the prior written approval of the
33.14 	association and first mortgagees of the affected units, remove
33.15 	or alter any intervening partition or create apertures therein,
33.16 	even if the partition is part of the common elements, if those
33.17 	acts do not impair the structural integrity or mechanical
33.18 	systems or lessen the support of any portion of the common
33.19 	interest community.  The adjoining unit owners shall have the
33.20 	exclusive license to use the space occupied by the removed
33.21 	partition, but the use shall not create an easement or vested
33.22 	right.  Removal of partitions or creation of apertures under
33.23 	this paragraph is not an alteration of boundaries.  The
33.24 	association may require that the owner or owners of units
33.25 	affected replace or restore any removed partition, that the unit
33.26 	owner comply with subsection (a)(i), (ii) and (iii), and that
33.27 	the unit owner pay all fees and costs incurred by the
33.28 	association in connection with the alteration.

33.29 	Sec. 15. Minnesota Statutes 2004, section 515B.2-118, is
33.30 	amended to read:
33.31 	515B.2-118 AMENDMENT OF DECLARATION.
33.32 	(a) The declaration, including any CIC plat, may be amended
33.33 	only by vote or written agreement of unit owners of units to
33.34 	which at least 67 percent of the votes in the association are
33.35 	allocated, or any greater or other requirement the declaration
33.36 	specifies, subject to the following qualifications:
34.1 	(1) A declarant may execute supplemental declarations or 
34.2 	amendments under section 515B.2-111 or 515B.2-112.
34.3 	(2) The association and certain unit owners, as applicable,
34.4 	may execute amendments under section 515B.2-107, 515B.2-109,
34.5 	515B.2-112, 515B.2-113, 515B.2-114, 515B.2-119, 515B.2-122,
34.6 	515B.2-123, or 515B.2-124.
34.7 	(3) The unanimous written consent of the unit owners is
34.8 	required for any amendment which (i) creates or increases
34.9 	special declarant rights, (ii) increases the number of units,
34.10 	(iii) changes the boundaries of any unit, (iv) changes the
34.11 	allocated interests of a unit, (v) changes common elements to
34.12 	limited common elements or units, (vi) changes the authorized
34.13 	use of a unit from residential to nonresidential, or conversely,
34.14 	or (vii) changes the characterization of the unit owner's
34.15 	interest in a cooperative from real estate to personal property,
34.16 	or conversely; unless the amendment is expressly permitted or
34.17 	required by other provisions of this chapter. Where the
34.18 	amendment involves the conversion of common elements into a unit
34.19 	or units, the title to the unit or units created shall, upon
34.20 	recording of the amendment, vest in the association free and
34.21 	clear of the interests of the unit owners.
34.22 	(4) The declaration may specify less than 67 percent for
34.23 	approval of an amendment, but only if all of the units are
34.24 	restricted to nonresidential use.
34.25 	(b) No action to challenge the validity of an amendment
34.26 	adopted by the association pursuant to this section may be
34.27 	brought more than two years after the amendment is recorded.
34.28 	(c) Every amendment to the declaration shall be recorded in
34.29 	every county in which any portion of the common interest
34.30 	community is located and is effective only when recorded.  If an
34.31 	amendment (i) changes the number of units, (ii) changes the
34.32 	boundary of a unit, (iii) changes common elements to limited
34.33 	common elements, or conversely, or (iv) makes any other change
34.34 	that affects the CIC plat, then an amendment to the CIC plat
34.35 	reflecting the change shall be recorded.

34.36 	Sec. 16. Minnesota Statutes 2004, section 515B.2-119, is
35.1 	amended to read:
35.2 	515B.2-119 TERMINATION OF COMMON INTEREST COMMUNITY.
35.3 	(a) Except as otherwise provided in this chapter, a common
35.4 	interest community may be terminated only by agreement of unit
35.5 	owners of units to which at least 80 percent of the votes in the
35.6 	association are allocated, and 80 percent of the first
35.7 	mortgagees of units (each mortgagee having one vote per unit
35.8 	financed), or any larger percentage the declaration specifies.
35.9 	The declaration may specify a smaller percentage only if all of
35.10 	the units are restricted to nonresidential use.
35.11 	(b) An agreement to terminate shall be evidenced by a
35.12 	written agreement, executed in the same manner as a deed by the
35.13 	number of unit owners and first mortgagees of units required by
35.14 	subsection (a).  The agreement shall specify a date after which
35.15 	the agreement shall be void unless recorded before that date.
35.16 	The agreement shall also specify a date by which the termination
35.17 	of the common interest community and the winding up of its
35.18 	affairs must be accomplished.  A certificate of termination
35.19 	executed by the association evidencing the termination shall be
35.20 	recorded on or before the termination date, or the agreement to
35.21 	terminate shall be revoked.  The agreement to terminate, or a
35.22 	memorandum thereof, and the certificate of termination shall be
35.23 	recorded in every county in which a portion of the common
35.24 	interest community is situated and is effective only upon
35.25 	recording.
35.26 	(c) In the case of a condominium or planned community
35.27 	containing only units having upper and lower boundaries, a
35.28 	termination agreement may provide that all of the common
35.29 	elements and units of the common interest community must be sold
35.30 	following termination.  If, pursuant to the agreement, any real
35.31 	estate in the common interest community is to be sold following
35.32 	termination, the termination agreement shall set forth the
35.33 	minimum terms of sale acceptable to the association.
35.34 	(d) In the case of a condominium or planned community
35.35 	containing any units not having upper and lower boundaries, a
35.36 	termination agreement may provide for sale of the common
36.1 	elements, but it may not require that the units be sold
36.2 	following termination, unless the original declaration provided
36.3 	otherwise or all unit owners whose units are to be sold consent
36.4 	to the sale.
36.5 	(e) The association, on behalf of the unit owners, shall
36.6 	have authority to contract for the sale of real estate in a
36.7 	common interest community pursuant to this section, subject to
36.8 	the required approval.  The agreement to terminate shall be
36.9 	deemed to grant to the association a power of attorney coupled
36.10 	with an interest to effect the conveyance of the real estate on
36.11 	behalf of the holders of all interests in the units, including
36.12 	without limitation the power to execute all instruments of
36.13 	conveyance and related instruments.  Until the sale has been
36.14 	completed, all instruments in connection with the sale have been
36.15 	executed and the sale proceeds distributed, the association
36.16 	shall continue in existence with all powers it had before
36.17 	termination.
36.18 	(1) The instrument conveying or creating the interest in
36.19 	the common interest community shall include as exhibits (i) an
36.20 	affidavit of the secretary of the association certifying that
36.21 	the approval required by this section has been obtained and (ii)
36.22 	a schedule of the names of all unit owners in the common
36.23 	interest community as of the date of the approval.
36.24 	(2) Proceeds of the sale shall be distributed to unit
36.25 	owners and secured parties as their interests may appear, in
36.26 	accordance with subsections (h), (i), (j), and (k).
36.27 	(3) Unless otherwise specified in the agreement of
36.28 	termination, until the association has conveyed title to the
36.29 	real estate, each unit owner and the unit owner's successors in
36.30 	interest have an exclusive right to occupancy of the portion of
36.31 	the real estate that formerly constituted the unit.  During the
36.32 	period of that occupancy, each unit owner and the unit owner's
36.33 	successors in interest remain liable for all assessments and
36.34 	other obligations imposed on unit owners by this chapter, the
36.35 	declaration or the bylaws.
36.36 	(f) The legal description of the real estate constituting
37.1 	the common interest community shall, upon the date of recording
37.2 	of the certificate of termination referred to in subsection (b),
37.3 	be as follows:
37.4 	(1) In a planned community utilizing a CIC plat complying
37.5 	with section 515B.2-110(d)(1) and (2), the lot and block
37.6 	description contained in the CIC plat, and any amendments
37.7 	thereto, subject to any subsequent conveyance or taking of a fee
37.8 	interest in any part of the property.
37.9 	(2) In a condominium or cooperative, or a planned community
37.10 	utilizing a CIC plat complying with section 515B.2-110(c),the
37.11 	underlying legal description of the real estate as set forth in
37.12 	the declaration creating the common interest community, and any
37.13 	amendments thereto, subject to any subsequent conveyance or
37.14 	taking of a fee interest in any part of the property.
37.15 	(3) The legal description referred to in this subsection
37.16 	shall apply upon the recording of the certificate of
37.17 	termination.  The recording officer for each county in which the
37.18 	common interest community is located shall index the property
37.19 	located in that county in its records under the legal
37.20 	description required by this subsection from and after the date
37.21 	of recording of the certificate of termination.  In the case of
37.22 	registered property, the registrar of titles shall cancel the
37.23 	existing certificates of title with respect to the property and
37.24 	issue one or more certificates of title for the property
37.25 	utilizing the legal description required by this subsection.
37.26 	(g) In a condominium or planned community, if the agreement
37.27 	to terminate provides that the real estate constituting the
37.28 	common interest community is not to be sold following
37.29 	termination, title to the common elements and, in a common
37.30 	interest community containing only units having upper and lower
37.31 	boundaries described in the declaration, title to all the real
37.32 	estate in the common interest community, vests in the unit
37.33 	owners upon termination as tenants in common in proportion to
37.34 	their respective interest as provided in subsection (k), and
37.35 	liens on the units shift accordingly.  While the tenancy in
37.36 	common exists, each unit owner and the unit owner's successors
38.1 	in interest have an exclusive right to occupancy of the portion
38.2 	of the real estate that formerly constituted the unit.
38.3 	(h) The proceeds of any sale of real estate pursuant to
38.4 	subsection (e), together with the assets of the association,
38.5 	shall be held by the association as trustee for unit owners,
38.6 	secured parties and other holders of liens on the units as their
38.7 	interests may appear.  Before distributing any proceeds, the
38.8 	association shall have authority to deduct from the proceeds of
38.9 	sale due with respect to the unit (i) unpaid assessments levied
38.10 	by the association with respect to the unit, (ii) unpaid real
38.11 	estate taxes or special assessments due with respect to the
38.12 	unit, and (iii) the share of expenses of sale and winding up of
38.13 	the association's affairs with respect to the unit.
38.14 	(i) Following termination of a condominium or planned
38.15 	community, creditors of the association holding liens on the
38.16 	units perfected before termination may enforce those liens in
38.17 	the same manner as any lien holder, in order of priority based
38.18 	upon their times of perfection.  All other creditors of the
38.19 	association are to be treated as if they had perfected liens on
38.20 	the units immediately before termination.
38.21 	(j) In a cooperative, the declaration may provide that all
38.22 	creditors of the association have priority over any interests of
38.23 	unit owners and creditors of unit owners.  In that event,
38.24 	following termination, creditors of the association holding
38.25 	liens on the cooperative which were perfected before termination
38.26 	may enforce their liens in the same manner as any lien holder,
38.27 	in order of priority based upon their times of perfection.  All
38.28 	other creditors of the association shall be treated as if they
38.29 	had perfected a lien against the cooperative immediately before
38.30 	termination.  Unless the declaration provides that all creditors
38.31 	of the association have that priority:
38.32 	(1) the lien of each creditor of the association which was
38.33 	perfected against the association before termination becomes,
38.34 	upon termination, a lien against each unit owner's interest in
38.35 	the unit as of the date the lien was perfected;
38.36 	(2) any other creditor of the association is to be treated
39.1 	upon termination as if the creditor had perfected a lien against
39.2 	each unit owner's interest immediately before termination;
39.3 	(3) the amount of the lien of an association's creditor
39.4 	described in paragraphs (1) and (2) against each of the unit
39.5 	owners' interest shall be proportionate to the ratio which each
39.6 	unit's common expense liability bears to the common expense
39.7 	liability of all of the units;
39.8 	(4) the lien of each creditor of each unit owner which was
39.9 	perfected before termination continues as a lien against that
39.10 	unit owner's interest in the unit as of the date the lien was
39.11 	perfected; and
39.12 	(5) the assets of the association shall be distributed to
39.13 	all unit owners and all lien holders as their interests may
39.14 	appear in the order described in this section.  Creditors of the
39.15 	association are not entitled to payment from any unit owner in
39.16 	excess of the amount of the creditor's lien against that unit
39.17 	owner's interest.
39.18 	(k) The respective interest of unit owners referred to in
39.19 	subsections (e), (f), (g), (h) and (i) are as follows:
39.20 	(1) Except as provided in paragraph (2), the respective
39.21 	interests of unit owners are the fair market values of their
39.22 	units, allocated interests, and any limited common elements
39.23 	immediately before the termination, as determined by one or more
39.24 	independent appraisers selected by the association.  The
39.25 	decision of the independent appraisers must be distributed to
39.26 	the unit owners and becomes final unless disapproved within 30
39.27 	days after distribution by unit owners of units to which 25
39.28 	percent of the votes in the association are allocated.  The
39.29 	proportion of any unit's interest to that of all units is
39.30 	determined by dividing the fair market value of that unit by the
39.31 	total fair market values of all the units.
39.32 	(2) If any unit or any limited common element is destroyed
39.33 	to the extent that an appraisal of the fair market value thereof
39.34 	before destruction cannot be made, the interests of all unit
39.35 	owners are shall be measured by:  (i) in a condominium,
39.36 	their respective allocations of common element interests
40.1 	immediately before the termination, (ii) in a cooperative, their
40.2 	respective ownership interests immediately before the
40.3 	termination, and (iii) in a planned community, their
40.4 	respective allocations of common expense liabilities expenses 
40.5 	immediately before the termination.
40.6 	(1) In a condominium or planned community, except as
40.7 	provided in subsection (m), foreclosure or enforcement of a lien
40.8 	or encumbrance against the entire common interest community does
40.9 	not terminate, of itself, the common interest community, and
40.10 	foreclosure or enforcement of a lien or encumbrance against a
40.11 	portion of the common interest community does not withdraw that
40.12 	portion from the common interest community.
40.13 	(m) In a condominium or planned community, if a lien or
40.14 	encumbrance against a portion of the real estate comprising the
40.15 	common interest community has priority over the declaration and
40.16 	the lien or encumbrance has not been partially released, the
40.17 	parties foreclosing the lien or encumbrance, upon foreclosure,
40.18 	may record an instrument excluding the real estate subject to
40.19 	that lien or encumbrance from the common interest community.
40.20 	(n) Following the termination of a common interest
40.21 	community in accordance with this section, the board of
40.22 	directors of the association shall cause the association to be
40.23 	dissolved in accordance with law.

40.24 	Sec. 17. Minnesota Statutes 2004, section 515B.2-121, is
40.25 	amended to read:
40.26 	515B.2-121 MASTER ASSOCIATIONS.
40.27 	(a) A master association formed after June 1, 1994, shall
40.28 	be organized as a Minnesota profit, nonprofit or cooperative
40.29 	corporation.  A master association shall be incorporated prior
40.30 	to the delegation to it of any powers under this chapter.
40.31 	(b) The members of the master association shall be any
40.32 	combination of (i) unit owners of one or more common interest
40.33 	communities, (ii) one or more associations, (iii) one or more
40.34 	master associations, or (iv) owners of real estate or property
40.35 	owners owner's associations not subject to this chapter in
40.36 	combination with any other category of member.  An association
41.1 	or its members may be members of an entity created before June
41.2 	1, 1994, which performs functions similar to those performed by
41.3 	a master association regardless of whether the entity is subject
41.4 	to this chapter.
41.5 	(c) A master association shall be governed by a board of
41.6 	directors. Except as expressly prohibited by the master
41.7 	declaration, the master association's articles of incorporation
41.8 	or bylaws, or other provisions of this chapter, the master
41.9 	association board may act in all instances on behalf of the
41.10 	master association.The directors of a master association shall
41.11 	be elected or, if a nonprofit corporation, elected or appointed,
41.12 	in a manner consistent with the requirements of the statute
41.13 	under which the master association is formed and of the master
41.14 	association's articles of incorporation and bylaws, and subject
41.15 	to the following requirements:
41.16 	(1) Except as set forth in subsections (2) and (3), the
41.17 	members of the master association shall elect the board of
41.18 	directors.  A majority of the directors shall be members of the
41.19 	master association or members of a member of the master
41.20 	association, and shall be persons other than a declarant or
41.21 	affiliate of a declarant.  If the member is not a natural
41.22 	person, it may designate a natural person to act on its behalf.
41.23 	(2) The articles of incorporation or bylaws of the master
41.24 	association may authorize a any person other than , whether or
41.25 	not the person is a member of, or otherwise subject to,the
41.26 	master association or a unit owner, including a declarant, to
41.27 	appoint or elect one director.
41.28 	(3) A master association's articles of incorporation may
41.29 	suspend the members' right to elect or, in the case of a
41.30 	nonprofit corporation, elect or appoint, the master
41.31 	association's board of directors for a specified time period.
41.32 	During this period, the person or persons who execute the master
41.33 	declaration under subsection (f)(1), or their successors or
41.34 	assigns, may appoint the directors.  The period during which the
41.35 	person or persons may appoint the directors begins when the
41.36 	master declaration is recorded and terminates upon the earliest
42.1 	of:
42.2 	(i) the voluntary surrender of the right to appoint
42.3 	directors;
42.4 	(ii) the date ten years after the date the master
42.5 	declaration is recorded;
42.6 	(iii) the date, if any, in the articles of incorporation;
42.7 	or
42.8 	(iv) the date when at least 75 percent of the associations
42.9 	that are members of the master association or whose members are
42.10 	members of the master association are controlled by their
42.11 	members.  An association's members control the association when
42.12 	they have the right to elect or appoint a majority of the
42.13 	association's voting directors units and other parcels of real
42.14 	estate which are referred to in subsection (f)(1)(vii) have been
42.15 	conveyed to such persons for occupancy by the persons or their
42.16 	tenants.
42.17 	(4) The term of any director appointed under subsection (3)
42.18 	expires 60 days after the right to appoint directors
42.19 	terminates.  The master association's board of directors shall
42.20 	call an annual or special meeting of the master association's
42.21 	members to elect or appoint successor directors within the
42.22 	60-day period.
42.23 	(5) The system for the election of directors shall be fair
42.24 	and equitable and shall take into account the number of members
42.25 	of each association any of whose powers are delegated to the
42.26 	master association, the needs of the members of the master
42.27 	association, the allocation of liability for master association
42.28 	common expenses, and the types of common interest communities
42.29 	and other real estate subject to the master association.
42.30 	(d) The articles of incorporation or bylaws of the master
42.31 	association may authorize special classes of directors and
42.32 	allocations of director voting rights, as follows:  (i) classes
42.33 	of directors that are elected by different classes of members,
42.34 	to address operational, physical, or administrative differences
42.35 	within the master association, or (ii) class voting by the
42.36 	classes of directors on specific issues affecting only a certain
43.1 	class or classes of members or ,units or other parcels of real
43.2 	estate, or to otherwise protect the legitimate interests of such
43.3 	class or classes.  No person may utilize such special classes or
43.4 	allocations for the purpose of evading any limitation imposed on
43.5 	declarants by this chapter.
43.6 	(e) The officers of a master association shall be elected,
43.7 	appointed, or designated in a manner consistent with the statute
43.8 	under which the master association is formed and consistent with
43.9 	the master association articles of incorporation and bylaws.
43.10 	(f) The creation and authority of a master association
43.11 	shall be governed by the following requirements:
43.12 	(1) A master declaration shall be recorded in connection
43.13 	with the creation of a master association.  The master
43.14 	declaration shall be executed by the owners of the real estate
43.15 	subjected to the master declaration.  The master declaration
43.16 	shall contain, at a minimum:
43.17 	(i) the name of the master association;
43.18 	(ii) a legally sufficient description of the real estate
43.19 	which is subject to the master declaration and a legally
43.20 	sufficient description of any other real estate which may be
43.21 	subjected to the master declaration pursuant to subsection (g);
43.22 	(iii) a statement as to whether the real estate subject to,
43.23 	and which may be subjected to, the master declaration
43.24 	collectively is or collectively will be a separate common
43.25 	interest community;
43.26 	(iv) a description of the members of the master
43.27 	association;
43.28 	(v) a description of the master association's powers.To
43.29 	be exercised by the master association on behalf of its members
43.30 	and on behalf of the members of its members in the case of
43.31 	members that are common interest communities.  The provisions of
43.32 	the master declaration with respect to the grant and exercise of
43.33 	powers for common interest communities subject to the master
43.34 	association shall be consistent with the declarations of the
43.35 	common interest communities that delegate powers to the master
43.36 	association the extent described in the master declaration, a
44.1 	master association has the powers with respect to the master
44.2 	association's members and the property subject to the master
44.3 	declaration that section 515B.3-102 grants to an association
44.4 	with respect to the association's members and the property
44.5 	subject to the declaration.  A master association also has the
44.6 	powers delegated to it by an association pursuant to subsection
44.7 	(f)(2) or by a property owner's association not subject to the
44.8 	chapter; provided (i) that the master declaration identifies the
44.9 	powers and authorizes the delegation either expressly or by a
44.10 	grant of authority to the board of the association or property
44.11 	owner's association and (ii) that the master association board
44.12 	has not refused the delegation pursuant to subsection (f)(4).
44.13 	The provisions of the declarations of the common interest
44.14 	communities, or the provisions of recorded instruments governing
44.15 	other property subject to the master declaration, that delegate
44.16 	powers to the master association shall be consistent with the
44.17 	provisions of the master declaration that govern the delegation
44.18 	of the powers;
44.19 	(vi) a description of the formula formulas governing the
44.20 	allocation of assessments and member voting rights, including
44.21 	any special classes or allocations referred to in subsection
44.22 	(d); and 
44.23 	(vii) a statement of the total number of units and other
44.24 	parcels of real estate intended for residential use by a person
44.25 	or the person's tenants that are (i) subject to the master
44.26 	declaration as initially recorded and (ii) intended to be
44.27 	created by the addition of real estate or by the subdivision of
44.28 	units or other parcels of real estate; and 
44.29 	(viii) the requirements for amendment of the master
44.30 	declaration, other than an amendment under subsection (g).
44.31 	(2) The declaration of a common interest community subject
44.32 	to the master association shall contain provisions delegating,
44.33 	or authorizing the delegation of, powers to the master
44.34 	association in accordance with subsection (f)(3).  The
44.35 	provisions of the declarations relating to the delegation shall
44.36 	be consistent with the provisions of the master declaration
45.1 	granting or reserving those powers to the master association.
45.2 	(3) The declaration of a common interest community located
45.3 	on property subject to a master declaration may:
45.4 	(i) delegate any of the powers described in section
45.5 	515B.3-102 to a the master association.; provided, that a
45.6 	delegation of the powers described in section 515B.3-102(a)(2)
45.7 	is effective only if expressly stated in the declaration; and
45.8 	(ii) authorize the board to delegate any of the powers
45.9 	described in section 515B.3-102, except for the powers described
45.10 	in section 515B.3-102(a)(2), to a the master association.
45.11 	(4) (3) With respect to any other property subject to a
45.12 	master association, there need not be an instrument other than
45.13 	the master declaration recorded against the property to empower
45.14 	the master association to exercise powers with respect to the
45.15 	property.
45.16 	(5) (4) If a declaration or other recorded instrument
45.17 	authorizes a the board or owner the board of a property owner's
45.18 	association to delegate powers to a master association, the
45.19 	master association board may refuse any delegation of powers
45.20 	that does not comply with (i) this chapter, (ii) the declaration
45.21 	or other recorded instrument, or (iii) the organizational
45.22 	documents of the master association.
45.23 	(6) (5) The failure of a declaration, a board or an owner
45.24 	of property subject to a master association to properly delegate
45.25 	some or all of the powers to the master association does not
45.26 	affect the authority of the master association to exercise those
45.27 	and other powers with respect to other common interest
45.28 	communities or owners of properties that are subject to the
45.29 	master association.
45.30 	(g) The master declaration may authorize other real estate
45.31 	to be subjected to the master declaration.  The other real
45.32 	estate shall be subjected to the master declaration by an
45.33 	amendment executed by the owner of the other real estate and
45.34 	approved in writing by the person who executed any other person
45.35 	or persons required by the master declaration, if other than the
45.36 	owner of the other real estate and recorded.
46.1 	(h) Sections 515B.3-103(a), (b), and (g), 515B.3-108,
46.2 	515B.3-109, 515B.3-110, and 515B.3-112 shall apply in the
46.3 	conduct of the affairs of a master association.  But the rights
46.4 	of voting, notice, and other rights enumerated in those sections
46.5 	apply only to persons who elect or appoint the board of a master
46.6 	association, whether or not those persons are otherwise unit
46.7 	owners within the meaning of this chapter.
46.8 	(i) If so provided in the master declaration, a master
46.9 	association may levy assessments for common expenses of the
46.10 	master association against the property subject to the master
46.11 	declaration, and have and foreclose liens securing the
46.12 	assessments.  The liens shall have the same priority against
46.13 	secured parties, shall include the same fees and charges, and
46.14 	may be foreclosed in the same manner, as assessment liens under
46.15 	section 515B.3-116.  The master association's lien shall have
46.16 	priority as against the lien of an association or property
46.17 	owner's association subject to the master association,
46.18 	regardless of when the lien arose or was perfected.
46.19 	(1) Master association common expenses shall be allocated
46.20 	among the members of the master association in a fair and
46.21 	equitable manner.  If the members are include associations or
46.22 	property owners' owner's associations, then the master
46.23 	assessments may be allocated among and levied against the
46.24 	associations or property owner's associations, or allocated
46.25 	among and levied directly against the units or other parcels of
46.26 	real estate owned by the members of the association or property
46.27 	owner's association.  If so provided in the master declaration,
46.28 	master assessments levied against a member association or
46.29 	property owner's association are allocated among and levied
46.30 	against the units or other parcels of real estate owned by the
46.31 	members of the association or property owner's association.  If
46.32 	applicable and appropriate, the formulas and principles
46.33 	described in section 515B.2-108, subsections (b), (c), (d), and
46.34 	(e), shall be used in making the allocations.  The assessment
46.35 	formulas and procedures described in the declarations of any
46.36 	common interest communities or any instruments governing other
47.1 	real estate subject to the master association shall not conflict
47.2 	with the formulas and procedures described in the master
47.3 	declaration.
47.4 	(2) The master declaration may exempt from liability for
47.5 	all or a portion of master association assessments any person
47.6 	authorized by subsection (c)(3) to appoint the members of the
47.7 	master association board for master association common expenses,
47.8 	or any other person,and exempt any unit or other parcel of real
47.9 	estate owned by the person from a lien for such common expenses 
47.10 	assessments, until a dwelling building constituting or located
47.11 	within the unit or other parcel of real estate is substantially
47.12 	completed.  Substantial completion shall be evidenced by a
47.13 	certificate of occupancy in a jurisdiction that issues that
47.14 	certificate.
47.15 	(j) A master association shall not be used, directly or
47.16 	indirectly, to avoid or nullify any warranties or other
47.17 	obligations for which a declarant of a common interest community
47.18 	subject to the master association is responsible, or to
47.19 	otherwise avoid the requirements of this chapter.

47.20 	Sec. 18. Minnesota Statutes 2004, section 515B.2-123, is
47.21 	amended to read:
47.22 	515B.2-123 CHANGE OF FORM OF COMMON INTEREST COMMUNITY.
47.23 	(a) The legal form of a condominium, planned community or
47.24 	cooperative subject to this chapter may be changed to a
47.25 	condominium or planned community, subject to any requirements
47.26 	contained in the declaration or bylaws of the common interest
47.27 	community, and the following requirements:
47.28 	(1) Subject to paragraphs (2) and (3), the change of form
47.29 	shall be approved in writing by the unit owners of units to
47.30 	which at least 80 percent of the votes in the association are
47.31 	allocated, and 80 percent of the first mortgagees of record of
47.32 	the units (each mortgagee having one vote per unit financed).
47.33 	The declaration or bylaws may specify a smaller percentage only
47.34 	if all of the units are restricted to nonresidential use. The
47.35 	approval shall include the approval of A declaration and bylaws
47.36 	satisfying the requirements of complying with this chapter shall
48.1 	be approved, subject to the foregoing approval standards,with
48.2 	respect to the new common interest community.
48.3 	(2) If the period of declarant control has not expired, the
48.4 	change of form shall also be approved in writing by the
48.5 	declarant.
48.6 	(3) If the existing common interest community is a
48.7 	cooperative, the change of form shall also be approved in
48.8 	writing by (i) each holder of a blanket mortgage of record and
48.9 	(ii) 80 percent of the secured parties holding interests in
48.10 	share loans encumbering the cooperative units or memberships
48.11 	(each secured party having one vote per share loan owned).
48.12 	(b) Upon approval as provided in subsection (a), the
48.13 	association in the existing common interest community shall have
48.14 	authority to execute the declaration of the new common interest
48.15 	community on behalf of the unit owners of, and all other persons
48.16 	holding an interest in, the units or other property which is a
48.17 	part of the existing common interest community, and to do all
48.18 	other acts necessary to create the new common interest community.
48.19 	(c) Upon approval as provided in subsection (a), the
48.20 	association in the existing common interest community shall have
48.21 	a power of attorney coupled with an interest to effect the
48.22 	conveyance of the units or any other real estate owned by the
48.23 	unit owners or the association, which is a part of the existing
48.24 	common interest community, on behalf of the unit owners and all
48.25 	other holders of interests in the common interest community,
48.26 	including without limitation the power to execute all
48.27 	instruments of conveyance and related instruments.
48.28 	(d) In a change of legal form under this section, the
48.29 	offer, conveyance or exchange of a unit in the new common
48.30 	interest community to or with the person owning the unit in the
48.31 	existing common interest community shall not be subject to
48.32 	article 4 of this chapter.
48.33 	(e) A change of legal form under this section shall not
48.34 	affect any preexisting obligations or liabilities of a declarant
48.35 	under any statute, or under the disclosure statement,
48.36 	declaration or bylaws of the existing common interest
49.1 	community.  The declarant of the existing common interest
49.2 	community shall continue to have the rights and obligations of a
49.3 	declarant with respect to the offer and sale of units owned by
49.4 	it or its affiliates in the new common interest community.

49.5 	Sec. 19. Minnesota Statutes 2004, section 515B.2-124, is
49.6 	amended to read:
49.7 	515B.2-124 SEVERANCE OF COMMON INTEREST COMMUNITY.
49.8 	(a) Unless the declaration provides otherwise, a part of a
49.9 	common interest community containing one or more units, with or
49.10 	without common elements,may be severed from the common interest
49.11 	community, subject to the requirements of this section.  Subject
49.12 	to any additional requirements contained in the declaration, the
49.13 	severance shall be approved in a written severance
49.14 	agreement satisfying the requirements of complying with this
49.15 	section, executed by:
49.16 	(1) unit owners entitled to cast at least 67 percent of the
49.17 	votes in the association, which approval shall include the
49.18 	approval of unit owners entitled to cast a majority of the votes
49.19 	allocated to units in the remaining common interest community
49.20 	and the approval of unit owners entitled to cast a majority of
49.21 	the votes allocated to units in the part of the common interest
49.22 	community being severed;
49.23 	(2) declarant until the earlier of five years after the
49.24 	recording of the declaration or the time at which declarant no
49.25 	longer owns an unsold unit; and
49.26 	(3) in the case of a cooperative, all holders of mortgages
49.27 	or contracts for deed on the entire real estate constituting the
49.28 	cooperative.
49.29 	(b) The declaration may specify a smaller percentage for
49.30 	unit owner approval only if all of the units are restricted to
49.31 	nonresidential use.
49.32 	(c) The severance agreement shall specify a severance date
49.33 	by which the severance of the common interest community shall be
49.34 	accomplished, after which the severance agreement is void.  The
49.35 	severance agreement shall be deemed to grant to the association
49.36 	a power of attorney coupled with an interest to effect the
50.1 	severance of the common interest community on behalf of the unit
50.2 	owners and the holders of all other interests in the units,
50.3 	including without limit the power to execute the amendment to
50.4 	the declaration, any instruments of conveyance, and all related
50.5 	instruments.
50.6 	(d) The severance agreement shall:
50.7 	(1) Approve an amendment to the declaration complying with
50.8 	this chapter, in substantially the same form to be recorded,
50.9 	which, at a minimum (i) legally describes the real estate
50.10 	constituting the remaining common interest community and the
50.11 	real estate being severed, (ii) restates the number of units in
50.12 	the remaining common interest community, (iii) reallocates the
50.13 	interests of the unit owners in the remaining common interest
50.14 	community among the remaining units in accordance with the
50.15 	allocation formula set forth in the declaration, and (iv)
50.16 	recites any easements to which the severed portion of the common
50.17 	interest community remains subject.
50.18 	(2) Approve an amendment to the articles of incorporation
50.19 	and bylaws of the remaining common interest community, if
50.20 	necessary.
50.21 	(3) Authorize the association to execute and record the
50.22 	amended declaration, articles of incorporation or bylaws on
50.23 	behalf of the unit owners and all other persons holding an
50.24 	interest in the remaining common interest community, and to take
50.25 	other actions necessary to accomplish the severance of the
50.26 	common interest community.
50.27 	(4) Allocate the assets and liabilities of the association
50.28 	between the association and (i) a new association formed
50.29 	pursuant to subsection (g), or (ii) the owners of the units
50.30 	being severed, subject to a lien against their interest in the
50.31 	severed real estate or their share in the assets of the
50.32 	association in favor of any person that held a security interest
50.33 	in their unit.
50.34 	(5) If the units that are being severed from the common
50.35 	interest community will not be included in a new common interest
50.36 	community that is (i) formed simultaneously with the severance
51.1 	of the common interest community, and (ii) includes all of the
51.2 	units and substantially all of the common elements being
51.3 	severed, then the agreement shall contain the written consent of
51.4 	holders of first mortgages on all units that are being severed,
51.5 	and shall describe in detail the proposed disposition of all
51.6 	real estate to be severed and all assets of the association
51.7 	allocated to the severed units, and the distribution of the
51.8 	proceeds of the disposition, if any.
51.9 	(e) The severance agreement or a memorandum of it shall be
51.10 	recorded in every county in which a part of the common interest
51.11 	community is located.  The recording of the severance agreement
51.12 	or memorandum of it shall, from the date of recording,
51.13 	constitute notice to all persons subsequently acquiring an
51.14 	interest in the common interest community that the common
51.15 	interest community is being severed, and that those persons
51.16 	acquire their interests subject to the terms and conditions
51.17 	contained in the severance agreement and the amendment to the
51.18 	declaration.
51.19 	(f) The amendment to the declaration of the remaining
51.20 	common interest community shall be recorded on or before the
51.21 	severance date or the severance agreement and the amendment to
51.22 	the declaration is void as of the day after the severance date.
51.23 	The recording of the amendment to the declaration shall complete
51.24 	the severance of the common interest community and release the
51.25 	severed part of the common interest community from the
51.26 	declaration without further action by any person.
51.27 	(g) If the unit owners whose units are being severed from
51.28 	the common interest community intend to form a new common
51.29 	interest community, then said unit owners shall unanimously , by
51.30 	at least 80 percent of the votes allocated by the existing
51.31 	declaration to said units,approve a new declaration, articles
51.32 	of incorporation and bylaws to govern the new common interest
51.33 	community no later than 60 days before the effective date of the
51.34 	severance.  The new declaration creating the new common interest
51.35 	community shall be recorded simultaneously with the amendment to
51.36 	the existing declaration.  No later than 30 days before after 
52.1 	the effective date of the severance agreement, the unit owners
52.2 	shall cause articles of incorporation creating the
52.3 	association governing intended to govern the new common interest
52.4 	community to be created by filing the articles of incorporation
52.5 	of the association shall be filed with the secretary of state
52.6 	and promptly thereafter the unit owners whose units are being
52.7 	severed shall elect a board of directors to act on behalf of the
52.8 	new association.  The board of directors of the new association
52.9 	shall coordinate the completion of the severance cooperate with
52.10 	the board of directors of the existing association to complete
52.11 	the severance.  The existing association shall retain all
52.12 	authority to act on behalf of the common interest community
52.13 	until the amendment to the existing declaration is and the new
52.14 	declaration are recorded.
52.15 	(h) The legal descriptions of the real estate constituting
52.16 	(i) the remaining common interest community, and (ii) the
52.17 	severed portion of the common interest community shall, at the
52.18 	time of recording of the amendment to the declaration referred
52.19 	to in subsection (e), be as follows:
52.20 	(1) In a planned community using a CIC plat that complies
52.21 	with section 515B.2-110, subsection (d), the lot and block
52.22 	descriptions contained in the CIC plat, and any amendments to
52.23 	it, with respect to (i) the remaining common interest community,
52.24 	and (ii) the severed portion of the common interest community.
52.25 	(2) In a condominium, or cooperative or planned community
52.26 	using a CIC plat that complies with section 515B.2-110,
52.27 	subsection (c), (i) the CIC plat description relating to the
52.28 	remaining common interest community, and (ii) the part of the
52.29 	underlying legal description of the real estate in the
52.30 	declaration creating the common interest community, and any
52.31 	amendments to it, relating to the severed part of the common
52.32 	interest community.
52.33 	(3) The recording officer for each county in which the
52.34 	common interest community is located shall index the property
52.35 	located in that county in its records under the legal
52.36 	descriptions required by this subsection as of the date of
53.1 	recording of the amendment to the declaration.  In the case of
53.2 	registered property, the registrar of titles shall cancel the
53.3 	existing certificates of title for the severed part of the
53.4 	common interest community and issue certificates of title for
53.5 	the property using the legal descriptions required by this
53.6 	subsection.
53.7 	(i) In a condominium or planned community, if the severed
53.8 	part of the common interest community is not to be reconstituted
53.9 	as a new common interest community following severance, title to
53.10 	the common elements and, in a common interest community in which
53.11 	all units have upper and lower boundaries described in the
53.12 	declaration title to all the real estate in the severed part of
53.13 	the common interest community, vests in the unit owners of the
53.14 	units being severed, upon severance, as tenants in common in
53.15 	proportion to their respective allocated interests in the
53.16 	declaration, and liens on the units shift accordingly.  While
53.17 	the tenancy in common exists, each unit owner and the unit
53.18 	owner's successors in interest have an exclusive right to
53.19 	occupancy of the portion of the real estate that formerly
53.20 	constituted the unit, and a nonexclusive easement across, over
53.21 	and under any common elements contained in the severed portion
53.22 	of the common interest community for enjoyment, access,
53.23 	utilities, communication services, and other essential services,
53.24 	as applicable.
53.25 	(j) No common interest community shall be severed in such a
53.26 	manner as to materially impair access, utility services,
53.27 	communication services, or other essential services with respect
53.28 	to either the remaining common interest community or the severed
53.29 	part of the common interest community.

53.30 	Sec. 20. Minnesota Statutes 2004, section 515B.3-101, is
53.31 	amended to read:
53.32 	515B.3-101 ORGANIZATION OF UNIT OWNERS' ASSOCIATION.
53.33 	A common interest community shall be administered by a unit
53.34 	owners' an association.  The unit owners' association shall be
53.35 	incorporated no later than the date the common interest
53.36 	community is created.  The membership of the association at all
54.1 	times consists exclusively of all unit owners or, following
54.2 	termination of the common interest community, of all former unit
54.3 	owners entitled to distributions of proceeds under section
54.4 	515B.2-119 or their heirs, successors, or assigns.  The
54.5 	association shall be organized as a Minnesota profit or
54.6 	nonprofit corporation, or may, in the case of a cooperative, be
54.7 	organized under chapter 308A.  In the event of a conflict
54.8 	between this chapter and any other chapter under which the
54.9 	association is incorporated, this chapter shall control.

54.10 	Sec. 21. Minnesota Statutes 2004, section 515B.3-102, is
54.11 	amended to read:
54.12 	515B.3-102 POWERS OF UNIT OWNERS' ASSOCIATION.
54.13 	(a) Except as provided in subsection (b), and subject to
54.14 	the provisions of the declaration or bylaws, the association
54.15 	shall have the power to:
54.16 	(1) adopt, amend and revoke rules and regulations not
54.17 	inconsistent with the articles of incorporation, bylaws and
54.18 	declaration, as follows:  (i) regulating the use of the common
54.19 	elements; (ii) regulating the use of the units, and conduct of
54.20 	unit occupants, which may jeopardize the health, safety or
54.21 	welfare of other occupants, which involves noise or other
54.22 	disturbing activity, or which may damage the common elements or
54.23 	other units; (iii) regulating or prohibiting animals; (iv)
54.24 	regulating changes in the appearance of the common elements and
54.25 	conduct which may damage the common interest community; (v)
54.26 	regulating the exterior appearance of the common interest
54.27 	community, including, for example, balconies and patios, window
54.28 	treatments, and signs and other displays, regardless of whether
54.29 	inside a unit; (vi) implementing the articles of incorporation,
54.30 	declaration and bylaws, and exercising the powers granted by
54.31 	this section; and (vii) otherwise facilitating the operation of
54.32 	the common interest community;
54.33 	(2) adopt and amend budgets for revenues, expenditures and
54.34 	reserves, and levy and collect assessments for common expenses
54.35 	from unit owners;
54.36 	(3) hire and discharge managing agents and other employees,
55.1 	agents, and independent contractors;
55.2 	(4) institute, defend, or intervene in litigation or
55.3 	administrative proceedings (i) in its own name on behalf of
55.4 	itself or two or more unit owners on matters affecting the
55.5 	common elements or other matters affecting the common interest
55.6 	community or, (ii) with the consent of the owners of the
55.7 	affected units on matters affecting only those units;
55.8 	(5) make contracts and incur liabilities;
55.9 	(6) regulate the use, maintenance, repair, replacement,and
55.10 	modification of the common elements and the units;
55.11 	(7) cause improvements to be made as a part of the common
55.12 	elements, and, in the case of a cooperative, the units;
55.13 	(8) acquire, hold, encumber, and convey in its own name any
55.14 	right, title, or interest to real estate or personal property,
55.15 	but (i) common elements in a condominium or planned community
55.16 	may be conveyed or subjected to a security interest only
55.17 	pursuant to section 515B.3-112, or (ii) part of a cooperative
55.18 	may be conveyed, or all or part of a cooperative may be
55.19 	subjected to a security interest, only pursuant to section
55.20 	515B.3-112;
55.21 	(9) grant easements for public utility easements utilities,
55.22 	public rights-of-way or other public purposes, and cable
55.23 	television or other communications,through, over or under the
55.24 	common elements,; grant easements, leases, or licenses to unit
55.25 	owners for purposes authorized by the declaration;and, subject
55.26 	to approval by resolution of unit owners other than declarant or
55.27 	its affiliates at a meeting duly called, grant other public or
55.28 	private easements, leases,and licenses through, over or under
55.29 	the common elements;
55.30 	(10) impose and receive any payments, fees, or charges for
55.31 	the use, rental, or operation of the common elements, other than
55.32 	limited common elements, and for services provided to unit
55.33 	owners;
55.34 	(11) impose charges for late payment of assessments and,
55.35 	after notice and an opportunity to be heard, levy reasonable
55.36 	fines for violations of the declaration, bylaws, and rules and
56.1 	regulations of the association;
56.2 	(12) impose reasonable charges for the review, preparation
56.3 	and recordation of amendments to the declaration, resale
56.4 	certificates required by section 515B.4-107, statements of
56.5 	unpaid assessments, or furnishing copies of association records;
56.6 	(13) provide for the indemnification of its officers and
56.7 	directors, and maintain directors' and officers' liability
56.8 	insurance;
56.9 	(14) provide for reasonable procedures governing the
56.10 	conduct of meetings and election of directors;
56.11 	(15) exercise any other powers conferred by law, or by the
56.12 	declaration, articles of incorporation or bylaws; and
56.13 	(16) exercise any other powers necessary and proper for the
56.14 	governance and operation of the association.
56.15 	(b) Notwithstanding subsection (a) the declaration or
56.16 	bylaws may not impose limitations on the power of the
56.17 	association to deal with the declarant which are more
56.18 	restrictive than the limitations imposed on the power of the
56.19 	association to deal with other persons.

56.20 	Sec. 22. Minnesota Statutes 2004, section 515B.3-103, is
56.21 	amended to read:
56.22 	515B.3-103  DUTY OF BOARD OF DIRECTORS, OFFICERS DURING,
56.23 	AFTER AND DECLARANT CONTROL.
56.24 	(a) An association shall be governed by a board of
56.25 	directors.  Except as expressly prohibited by the declaration,
56.26 	the articles of incorporation, bylaws, subsection (b), or other
56.27 	provisions of this chapter, the board may act in all instances
56.28 	on behalf of the association.  In the performance of their
56.29 	duties, the officers and directors are required to exercise (i)
56.30 	if appointed by the declarant, the care required of fiduciaries
56.31 	of the unit owners and (ii) if elected by the unit owners, the
56.32 	care required of a director by section 302A.251 or 317A.251, as
56.33 	applicable.
56.34 	(b) The board may not act unilaterally to amend the
56.35 	declaration, to terminate the common interest community, to
56.36 	elect directors to the board, or to determine the
57.1 	qualifications, powers and duties, or terms of office of
57.2 	directors, but the board may fill vacancies in its membership
57.3 	created other than by removal by the vote of the association
57.4 	members for the unexpired portion of any term.
57.5 	(c) Subject to subsection (d),The declaration may provide
57.6 	for a period of declarant control of the association, during
57.7 	which a declarant, or persons designated by the declarant, may
57.8 	appoint and remove the officers and directors of the
57.9 	association.  The maximum period of declarant control may extend
57.10 	from begins on the date of the first conveyance of a unit to a
57.11 	unit owner other than a declarant for a period not
57.12 	exceeding creation of the common interest community and
57.13 	terminates upon the earliest of the following events:  (i) five
57.14 	years after the date of the first conveyance of a unit to a unit
57.15 	owner other than a declarant in the case of a flexible common
57.16 	interest community or three years in the case of any other
57.17 	common interest community.  Regardless of any longer period
57.18 	provided in the declaration or elsewhere, a period of declarant
57.19 	control shall terminate upon the earlier of (i) surrender of
57.20 	control by the declarant or (ii) 60 days after , (ii) the
57.21 	declarant's voluntary surrender of control by giving written
57.22 	notice to the unit owners pursuant to section 515B.1-115, or
57.23 	(iii) the conveyance of 75 percent of the units to unit owners
57.24 	other than a declarant.
57.25 	(d) Not later than 60 days after conveyance of The board
57.26 	shall cause a meeting of the unit owners to be called, as
57.27 	follows:
57.28 	(1) If the period of declarant control has terminated
57.29 	pursuant to subsection (c), a meeting of the unit owners shall
57.30 	be called and held within 60 days after said termination, at
57.31 	which the board shall be elected by all unit owners, including
57.32 	declarant, subject to the requirements of subsection (e).
57.33 	(2) If 50 percent of the units that may be created to unit
57.34 	owners other than a declarant or an affiliate of a declarant, a
57.35 	meeting of the unit owners shall be held a declarant is
57.36 	authorized by the declaration to create have been conveyed prior
58.1 	to the termination of the declarant control period, a meeting of
58.2 	the unit owners shall be called and held within 60 days
58.3 	thereafter,at which not less than 33-1/3 percent of the members
58.4 	of the board shall be elected by unit owners other than a
58.5 	declarant or an affiliate of a declarant.
58.6 	(e) Following the termination of any period of declarant
58.7 	control, the unit owners shall elect the board.  All unit
58.8 	owners, including the declarant and its affiliates, may cast the
58.9 	votes allocated to any units owned by them.  The board shall
58.10 	thereafter be subject to the following requirements.
58.11 	(1) A majority of the directors shall be unit owners other
58.12 	than a declarant or an affiliate of a declarant, or a natural
58.13 	person designated by a unit owner that is not a natural person.
58.14 	The remaining directors need not be unit owners unless required
58.15 	by the articles of incorporation or bylaws.
58.16 	(2) Subject to the requirements of subsection (1), the
58.17 	articles of incorporation or bylaws may authorize (i) the
58.18 	appointment or election of one director, who need not be a unit
58.19 	owner, by a declarant or by a person or persons other than a
58.20 	unit owner, (ii) classes of directors, and (iii) the election of
58.21 	certain directors by unit owners of a certain class or classes
58.22 	of units.  The articles of incorporation or bylaws shall not be
58.23 	amended to change or terminate the authorization described in
58.24 	(i) without the written consent of the declarant or other person
58.25 	possessing the power to appoint or elect.
58.26 	(3) Subject to the requirements of subsection (1), if
58.27 	separate classes of directors are authorized under subsection
58.28 	(2), the articles of incorporation or bylaws may authorize class
58.29 	voting by classes of directors on specified issues affecting
58.30 	only a certain class of units, or to protect the legitimate
58.31 	interests of the class.  A person shall not use special class
58.32 	voting to evade any limit imposed on declarants by this chapter.
58.33 	(4) The board shall elect the officers.  The directors and
58.34 	officers shall take office upon election.
58.35 	(f) In determining whether the period of declarant control
58.36 	has terminated under subsection (c), or whether unit owners
59.1 	other than a declarant are entitled to elect members of the
59.2 	board of directors under subsection (d), the percentage of the
59.3 	units which has been conveyed shall be calculated based upon the
59.4 	assumption that all units which the declarant has built or
59.5 	reserved the right to build in the declaration are included in
59.6 	the common interest community using as a numerator the number of
59.7 	units conveyed and as a denominator the number of units subject
59.8 	to the declaration plus the number of units which the declarant
59.9 	is authorized by the declaration to create on any additional
59.10 	real estate.  The percentages referred to in subsections (c) and
59.11 	(d) shall be calculated without reference to units that are
59.12 	auxiliary to other units, such as garage units or storage
59.13 	units.  A person shall not use a master association or other
59.14 	device to evade the requirements of this section.
59.15 	(g) Except as otherwise provided in this subsection,
59.16 	meetings of the board of directors must be open to the unit
59.17 	owners.  To the extent practicable, the board shall give
59.18 	reasonable notice to the unit owners of the date, time, and
59.19 	place of a board meeting.  If the date, time, and place of
59.20 	meetings are provided for in the declaration, articles, or
59.21 	bylaws, announced at a previous meeting of the board, posted in
59.22 	a location accessible to the unit owners and designated by the
59.23 	board from time to time, or if an emergency requires immediate
59.24 	consideration of a matter by the board, notice is not required.
59.25 	"Notice" has the meaning given in section 317A.011, subdivision
59.26 	14.  Meetings may be closed to discuss the following:
59.27 	(1) personnel matters;
59.28 	(2) pending or potential litigation, arbitration or other
59.29 	potentially adversarial proceedings, between unit owners,
59.30 	between the board or association and unit owners, or other
59.31 	matters in which any unit owner may have an adversarial
59.32 	interest, if the board determines that closing the meeting is
59.33 	necessary to discuss strategy or to otherwise protect the
59.34 	position of the board or association or the privacy of a unit
59.35 	owner or occupant of a unit; or
59.36 	(3) criminal activity arising within the common interest
60.1 	community if the board determines that closing the meeting is
60.2 	necessary to protect the privacy of the victim or that opening
60.3 	the meeting would jeopardize investigation of the activity.
60.4 	Nothing in this subsection imposes a duty on the board to
60.5 	provide special facilities for meetings.  The failure to give
60.6 	notice as required by this subsection shall not invalidate the
60.7 	board meeting or any action taken at the meeting.  The minutes
60.8 	of any part of a meeting that is closed under this subsection
60.9 	may be kept confidential at the discretion of the board.

60.10 	Sec. 23. Minnesota Statutes 2004, section 515B.3-105, is
60.11 	amended to read:
60.12 	515B.3-105 TERMINATION OF DECLARANT'S CONTRACTS, LEASES.
60.13 	(a) If entered into prior to expiration termination of the
60.14 	period of declarant control pursuant to section 515B.3-103, (i)
60.15 	any management contract, employment contract, or lease of
60.16 	recreational facilities, units,or garages or other parking
60.17 	facilities, (ii) any contract, lease,or license binding the
60.18 	association, and to which a declarant or an affiliate of a
60.19 	declarant is a party, or (iii) any contract, lease or license
60.20 	binding the association or any unit owner other than the
60.21 	declarant or an affiliate of the declarant which is not bona
60.22 	fide or which was unconscionable to the unit owners at the time
60.23 	entered into under the circumstances then prevailing, may be
60.24 	terminated without penalty by the association at any time after
60.25 	the expiration of declarant control upon not less than 90 days'
60.26 	notice to the other party under the procedures described in this
60.27 	section.
60.28 	(b) If, during prior to expiration of the suspension period
60.29 	described in section 515B.2-121, subsection (c), paragraph (3),
60.30 	a contract, lease, or license of a type described in this
60.31 	section subsection (a) is entered into by a person having
60.32 	authority to appoint the directors of the master association and
60.33 	is binding upon a the master association, then the master
60.34 	association, and not any association, may terminate the
60.35 	contract, lease, or license under the procedures described in
60.36 	this section.
61.1 	(c) Termination shall be upon no less than 90 days' notice.
61.2 	Notice of termination shall be given by the association or
61.3 	master association, as applicable, in accordance with section
61.4 	515B.1-115; provided, that notice shall be effective only if
61.5 	given within two years following the termination of the period
61.6 	of declarant control or the suspension period described in
61.7 	section 515B.2-121, subsection (c), paragraph (3), as applicable.
61.8 	(d) This section does not apply to (i) :
61.9 	(1) any lease the termination of which would terminate the
61.10 	common interest community, (ii) a proprietary lease, or (iii) ;
61.11 	(2) in the case of a cooperative, a mortgage or contract
61.12 	for deed encumbering all real estate constituting the common
61.13 	interest community.owned by the association, except that if the
61.14 	mortgage or contract for deed contains a contractual obligation
61.15 	involving a type of contract, lease, or license which may be
61.16 	terminated pursuant to subsection (a) or (b), then that
61.17 	contractual obligation may be terminated pursuant to subsection
61.18 	(c); or 
61.19 	(3) an agreement between a declarant or an affiliate of a
61.20 	declarant, or a person having authority pursuant to section
61.21 	515B.2-121(c)(3) to appoint the directors of the master
61.22 	association, and any governmental entity, if such agreement is
61.23 	necessary to obtain governmental approvals, provide financing
61.24 	under any type of government program, or provide for
61.25 	governmentally required access, conservation, drainage, or
61.26 	utilities.

61.27 	Sec. 24. Minnesota Statutes 2004, section 515B.3-106, is
61.28 	amended to read:
61.29 	515B.3-106 BYLAWS; ANNUAL REPORT.
61.30 	(a) A common interest community shall have bylaws which
61.31 	comply with this chapter and the requirements of the statute
61.32 	under which the association is incorporated.  The bylaws and any
61.33 	amendments may be recorded, but need not be recorded to be
61.34 	effective unless so provided in the bylaws.
61.35 	(b) The bylaws shall provide that, in addition to any
61.36 	statutory requirements:
62.1 	(1) A meeting of the members shall be held at least once
62.2 	each year, and a specified officer of the association shall give
62.3 	notice of the meeting as provided in section 515B.3-108.
62.4 	(2) An annual report shall be prepared by the association
62.5 	and a copy of the report shall be provided to each unit owner at
62.6 	or prior to the annual meeting.
62.7 	(c) The annual report shall contain at a minimum:
62.8 	(1) a statement of any capital expenditures in excess of
62.9 	two percent of the current budget or $5,000, whichever is
62.10 	greater, approved by the association for the current fiscal year
62.11 	or succeeding two fiscal years;
62.12 	(2) a statement of the balance in any reserve or
62.13 	replacement fund;
62.14 	(3) a copy of the statement of revenues and expenses for
62.15 	the association's last fiscal year, and a balance sheet as of
62.16 	the end of said fiscal year;
62.17 	(4) a statement of the status of any pending litigation or
62.18 	judgments to which the association is a party;
62.19 	(5) a detailed description of the insurance coverage
62.20 	provided by the association including a statement as to which,
62.21 	if any, of the items referred to in section 515B.3-113,
62.22 	subsection (b), are insured by the association; and
62.23 	(6) a statement of the total past due assessments on all
62.24 	units, current as of not more than 60 days prior to the date of
62.25 	the meeting.

62.26 	Sec. 25. Minnesota Statutes 2004, section 515B.3-110, is
62.27 	amended to read:
62.28 	515B.3-110 VOTING; PROXIES.
62.29 	(a) At any meeting of the association an owner or the
62.30 	holder of the owner's proxy shall be entitled to cast the vote
62.31 	which is allocated to the unit.  If there is more than one owner
62.32 	of a unit, only one of the owners may cast the vote.  If the
62.33 	owners of a unit fail to agree and notify the association as to
62.34 	who shall cast the vote, the vote shall not be cast. Any
62.35 	provision in the articles of incorporation, bylaws, declaration,
62.36 	or other document restricting a unit owner's right to vote, or
63.1 	affecting quorum requirements, by reason of nonpayment of
63.2 	assessments, or a purported violation of any provision of the
63.3 	documents governing the common interest community, shall be void.
63.4 	(b) If permitted by the articles or bylaws, votes allocated
63.5 	to a unit may be cast pursuant to a proxy executed by the unit
63.6 	owner entitled to cast the vote for that unit.  The board may
63.7 	specify the form of proxy and proxy rules, consistent with law.
63.8 	(c) The entire vote on any single issue (except the
63.9 	election of directors), may be by mailed ballots, subject to (i)
63.10 	any prohibition or requirement contained in the articles of
63.11 	incorporation, bylaws, or declaration and (ii) any requirements
63.12 	of the statute under which the association is created.  Such a
63.13 	vote shall have the force and effect of a vote taken at a
63.14 	meeting; provided, that the total votes cast are at least equal
63.15 	to the votes required for a quorum.  The board shall set a
63.16 	voting period within which the ballots must be returned, which
63.17 	period shall be not less than ten nor more than 30 days after
63.18 	the date of mailing or hand delivery of the ballots to the
63.19 	owners.  The board of directors shall provide written notice of
63.20 	the results of the vote to the members within 30 days after the
63.21 	expiration of the voting period.  All requirements in this
63.22 	chapter, the declaration or the bylaws for a meeting of the
63.23 	members, or being present in person, shall be deemed satisfied
63.24 	by a vote taken by mail in compliance with the requirements of
63.25 	this section.
63.26 	(d) The articles of incorporation or bylaws may authorize
63.27 	class voting by unit owners for directors or on specified issues
63.28 	affecting the class.  Class voting may only be used to address
63.29 	operational, physical, or administrative differences within the
63.30 	common interest community.  A declarant shall not use class
63.31 	voting to evade any limit imposed on declarants by this chapter
63.32 	and units shall not constitute a class because they are owned by
63.33 	a declarant.
63.34 	(e) The declaration or bylaws may provide that votes on
63.35 	specified matters affecting the common interest community be
63.36 	cast by lessees or secured parties rather than unit owners;
64.1 	provided that (i) the provisions of subsections (a), (b), and (c)
64.2 	apply to those persons as if they were unit owners; (ii) unit
64.3 	owners who have so delegated their votes to other persons may
64.4 	not cast votes on those specified matters; (iii) lessees or
64.5 	secured parties are entitled to notice of meetings, access to
64.6 	records, and other rights respecting those matters as if they
64.7 	were unit owners, and (iv) the lessee or secured party has filed
64.8 	satisfactory evidence of its interest with the secretary of the
64.9 	association prior to the meeting.  Unit owners must also be
64.10 	given notice, in the manner provided in section 515B.3-108(b),
64.11 	of meetings at which lessees or secured parties are entitled to
64.12 	vote.
64.13 	(f) No votes allocated to a unit owned by the association
64.14 	may be cast nor counted toward a quorum.

64.15 	Sec. 26. Minnesota Statutes 2004, section 515B.3-112, is
64.16 	amended to read:
64.17 	515B.3-112 CONVEYANCE OR ENCUMBRANCE OF, OR CREATION OF
64.18 	SECURITY INTERESTS IN,COMMON ELEMENTS.
64.19 	(a) In a condominium or planned community, unless the
64.20 	declaration provides otherwise, portions of the common elements
64.21 	may be conveyed or subjected to a security interest by the
64.22 	association if persons entitled to cast at least 67 percent of
64.23 	the votes in the association, including 67 percent of the votes
64.24 	allocated to units not owned by a declarant, or any larger
64.25 	percentage the declaration specifies, approve that action in
64.26 	writing or at a meeting; but all unit owners of units to which
64.27 	any limited common element is allocated must agree in order to
64.28 	convey that limited common element or subject it to a security
64.29 	interest.  The declaration may specify a smaller percentage only
64.30 	if all of the units are restricted to nonresidential use.
64.31 	(b) In a cooperative, unless the declaration provides
64.32 	otherwise, part of a cooperative may be conveyed, or all or a
64.33 	part subjected to a security interest, by the association if
64.34 	persons entitled to cast at least 67 percent of the votes in the
64.35 	association, including 67 percent of the votes allocated to
64.36 	units in which the declarant has no interest, or any larger
65.1 	percentage the declaration specifies, approves that action in
65.2 	writing or at a meeting.  If fewer than all of the units or
65.3 	limited common elements are to be conveyed or subjected to a
65.4 	security interest, then all unit owners of those units, or the
65.5 	units to which those limited common elements are allocated, must
65.6 	agree in order to convey those units or limited common elements
65.7 	or subject them to a security interest.  The declaration may
65.8 	specify a smaller percentage only if all of the units are
65.9 	restricted to nonresidential use.  Any purported conveyance or
65.10 	other voluntary transfer of an entire cooperative is void,
65.11 	unless made pursuant to section 515B.2-119.
65.12 	(c) The association, on behalf of the unit owners, may
65.13 	contract to convey or encumber an interest in the common
65.14 	elements of a common interest community pursuant to this
65.15 	subsection, subject to the required approval.  After the
65.16 	approval has been obtained, the association shall have a power
65.17 	of attorney coupled with an interest to effect the conveyance or
65.18 	encumbrance on behalf of all unit owners in the common interest
65.19 	community, including the power to execute deeds, mortgages, or
65.20 	other instruments of conveyance or security.  The instrument
65.21 	conveying or creating the interest in the common interest
65.22 	community shall be recorded and shall include as exhibits (i) an
65.23 	affidavit of the secretary of the association certifying that
65.24 	the approval required by this section has been obtained and (ii)
65.25 	a schedule of the names of all unit owners and units in the
65.26 	common interest community as of the date of the approval.
65.27 	(d) Except as provided in section 515B.3-102(a)(9),Unless
65.28 	made pursuant to this section, any purported conveyance,
65.29 	encumbrance,creation of a security interest in or other
65.30 	voluntary transfer of any interest in the common elements, or of
65.31 	any part of a cooperative, is void. The grant of an easement,
65.32 	lease, or license pursuant to section 515B.3-102(a)(9) is not
65.33 	subject to this section.
65.34 	(e) In the case of a conveyance involving a condominium, a
65.35 	planned community utilizing a CIC plat complying with section
65.36 	515B.2-110(c),or a cooperative in which the unit owners'
66.1 	interests are characterized as real estate, the association
66.2 	shall record, simultaneously with the recording of the
66.3 	instrument of conveyance, an amended CIC plat showing the real
66.4 	estate constituting the common interest community exclusive of
66.5 	the real estate conveyed.  In all common interest communities,
66.6 	upon recording of the instrument of conveyance, the declaration,
66.7 	and all rights and obligations arising therefrom, shall be
66.8 	deemed released and terminated as to the real estate conveyed.
66.9 	(f) A conveyance or encumbrance of common elements, or of a
66.10 	cooperative, pursuant to this section shall not deprive any unit
66.11 	of its rights of support, reasonable access or utility services.
66.12 	(g) Except as provided in subsection (a), or unless the
66.13 	declaration otherwise provides, a conveyance or encumbrance of
66.14 	common elements pursuant to this section does not affect the
66.15 	priority or validity of preexisting encumbrances.
66.16 	(h) Any proceeds of the conveyance or creation of a
66.17 	security interest under this section are an asset of the
66.18 	association.
66.19 	(i) This section shall not apply to any conveyance or
66.20 	encumbrance of any interest in a proprietary lease.

66.21 	Sec. 27. Minnesota Statutes 2004, section 515B.3-113, is
66.22 	amended to read:
66.23 	515B.3-113 INSURANCE.
66.24 	(a) Commencing not later than the time of the first
66.25 	conveyance of a unit to a unit owner other than a declarant, the
66.26 	association shall maintain, to the extent reasonably available:
66.27 	(1) subject to subsection (b), property insurance (i) on
66.28 	the common elements and, in a planned community, also on
66.29 	property that must become common elements, (ii) for broad form
66.30 	covered causes of loss, and (iii) in a total amount of not less
66.31 	than the full insurable replacement cost of the insured
66.32 	property, less deductibles, at the time the insurance is
66.33 	purchased and at each renewal date, exclusive of items normally
66.34 	excluded from property policies; and
66.35 	(2) commercial general liability insurance against claims
66.36 	and liabilities arising in connection with the ownership,
67.1 	existence, use or management of the property in an amount, if
67.2 	any, specified by the common interest community instruments or
67.3 	otherwise deemed sufficient in the judgment of the board,
67.4 	insuring the board, the association, the management agent, and
67.5 	their respective employees, agents and all persons acting as
67.6 	agents.  The declarant shall be included as an additional
67.7 	insured in its capacity as a unit owner or board member.  The
67.8 	unit owners shall be included as additional insureds but only
67.9 	for claims and liabilities arising in connection with the
67.10 	ownership, existence, use or management of the common elements.
67.11 	The insurance shall cover claims of one or more insured parties
67.12 	against other insured parties.
67.13 	(b) In the case of a common interest community that
67.14 	contains units, or structures within units, sharing or having
67.15 	contiguous walls, siding or roofs, the insurance maintained
67.16 	under subsection (a)(1) shall include those units, or structures
67.17 	within those units, and the common elements.  The insurance need
67.18 	not cover the following items within the units:  (i) ceiling or
67.19 	wall finishing materials, (ii) floor coverings, (iii) cabinetry,
67.20 	(iv) finished millwork, (v) electrical or plumbing fixtures
67.21 	serving a single unit, (vi) built-in appliances, or (vii) other
67.22 	improvements and betterments, regardless of when installed.  If
67.23 	any improvements and betterments are covered, any increased cost
67.24 	may be assessed by the association against the units affected.
67.25 	The association may, in the case of a claim for damage to a unit
67.26 	or units, (i) pay the deductible amount as a common expense,
67.27 	(ii) assess the deductible amount against the units affected in
67.28 	any reasonable manner, or (iii) require the unit owners of the
67.29 	units affected to pay the deductible amount directly.
67.30 	(c) If the insurance described in subsections (a) and (b)
67.31 	is not reasonably available, the association shall promptly
67.32 	cause notice of that fact to be hand delivered or sent prepaid
67.33 	by United States mail to all unit owners.  The declaration may
67.34 	require the association to carry any other insurance, and the
67.35 	association in any event may carry any other insurance it
67.36 	considers appropriate to protect the association, the unit
68.1 	owners or officers, directors or agents of the association.
68.2 	(d) Insurance policies carried pursuant to subsections (a)
68.3 	and (b) shall provide that:
68.4 	(1) each unit owner and secured party is an insured person
68.5 	under the policy with respect to liability arising out of the
68.6 	unit owner's interest in the common elements or membership in
68.7 	the association;
68.8 	(2) the insurer waives its right to subrogation under the
68.9 	policy against any unit owner of the condominium or members of
68.10 	the unit owner's household and against the association and
68.11 	members of the board of directors;
68.12 	(3) no act or omission by any unit owner or secured party,
68.13 	unless acting within the scope of authority on behalf of the
68.14 	association, shall void the policy or be a condition to recovery
68.15 	under the policy; and
68.16 	(4) if at the time of a loss under the policy there is
68.17 	other insurance in the name of a unit owner covering the same
68.18 	property covered by the policy, the association's policy is
68.19 	primary insurance.
68.20 	(e) Any loss covered by the property policy under
68.21 	subsection (a)(1) shall be adjusted by and with the
68.22 	association.  The insurance proceeds for that loss shall be
68.23 	payable to the association, or to an insurance trustee
68.24 	designated by the association for that purpose.  The insurance
68.25 	trustee or the association shall hold any insurance proceeds in
68.26 	trust for unit owners and secured parties as their interests may
68.27 	appear.  The proceeds shall be disbursed first for the repair or
68.28 	restoration of the damaged common elements and units. Unit
68.29 	owners and secured parties are not entitled to receive any
68.30 	portion of the proceeds unless If there is a surplus of proceeds
68.31 	after the common elements and units have been completely
68.32 	repaired or restored or the common interest community is
68.33 	terminated, the board of directors may retain the surplus for
68.34 	use by the association or distribute the surplus among the
68.35 	owners on an equitable basis as determined by the board.
68.36 	(f) Unit owners may obtain insurance for personal benefit
69.1 	in addition to insurance carried by the association.
69.2 	(g) An insurer that has issued an insurance policy under
69.3 	this section shall issue certificates or memoranda of insurance,
69.4 	upon request, to any unit owner or secured party.  The insurance
69.5 	may not be canceled until 60 days after notice of the proposed
69.6 	cancellation has been mailed to the association, each unit owner
69.7 	and each secured party for an obligation to whom certificates of
69.8 	insurance have been issued.
69.9 	(h) Any portion of the common interest community which is
69.10 	damaged or destroyed as the result of a loss covered by the
69.11 	association's insurance shall be promptly repaired or replaced
69.12 	by the association unless (i) the common interest community is
69.13 	terminated and the association votes not to repair or replace
69.14 	all or part thereof, (ii) repair or replacement would be illegal
69.15 	under any state or local health or safety statute or ordinance,
69.16 	or (iii) 80 percent of the unit owners, including every unit
69.17 	owner and holder of a first mortgage on a unit or assigned
69.18 	limited common element which will not be rebuilt, vote not to
69.19 	rebuild.  Subject to subsection (b), the cost of repair or
69.20 	replacement of the common elements in excess of insurance
69.21 	proceeds and reserves shall be paid as a common expense, and the
69.22 	cost of repair of a unit in excess of insurance proceeds shall
69.23 	be paid by the respective unit owner.
69.24 	(i) If less than the entire common interest community is
69.25 	repaired or replaced, (i) the insurance proceeds attributable to
69.26 	the damaged common elements shall be used to restore the damaged
69.27 	area to a condition compatible with the remainder of the common
69.28 	interest community, (ii) the insurance proceeds attributable to
69.29 	units and limited common elements which are not rebuilt shall be
69.30 	distributed to the owners of those units, including units to
69.31 	which the limited common elements were assigned, and the secured
69.32 	parties of those units, as their interests may appear, and (iii)
69.33 	the remainder of the proceeds shall be distributed to all the
69.34 	unit owners and secured parties as their interests may appear in
69.35 	proportion to their common element interest in the case of a
69.36 	condominium or in proportion to their common expense liability
70.1 	in the case of a planned community or cooperative.
70.2 	(j) If the unit owners and holders of first mortgages vote
70.3 	not to rebuild a unit, that unit's entire common element
70.4 	interest, votes in the association, and common expense liability
70.5 	are automatically reallocated upon the vote as if the unit had
70.6 	been condemned under section 515B.1-107, and the association
70.7 	shall promptly prepare, execute and record an amendment to the
70.8 	declaration reflecting the reallocations.  Notwithstanding the
70.9 	provisions of this subsection, if the common interest community
70.10 	is terminated, insurance proceeds not used for repair or
70.11 	replacement shall be distributed in the same manner as sales
70.12 	proceeds pursuant to section 515B.2-119.
70.13 	(k) The provisions of this section may be varied or waived
70.14 	in the case of a common interest community in which all units
70.15 	are restricted to nonresidential use.

70.16 	Sec. 28. Minnesota Statutes 2004, section 515B.3-114, is
70.17 	amended to read:
70.18 	515B.3-114 RESERVES; SURPLUS FUNDS.
70.19 	(a) The annual budgets of the association shall provide
70.20 	from year to year, on a cumulative basis, for adequate reserve
70.21 	funds to cover the replacement of those parts of the
70.22 	common elements and limited common elements interest community 
70.23 	which the association is obligated to maintain, repair, or 
70.24 	replace. These reserve requirements shall not apply to a common
70.25 	interest community which is restricted to nonresidential use.
70.26 	(b) Unless the declaration provides otherwise, any surplus
70.27 	funds that the association has remaining after payment of or
70.28 	provision for common expenses and reserves shall be (i) credited
70.29 	to the unit owners to reduce their future common expense
70.30 	assessments or (ii) credited to reserves, or any combination
70.31 	thereof, as determined by the board of directors.

70.32 	Sec. 29. Minnesota Statutes 2004, section 515B.3-115, is
70.33 	amended to read:
70.34 	515B.3-115 ASSESSMENTS FOR COMMON EXPENSES.
70.35 	(a) The obligation of a unit owner to pay common expense
70.36 	assessments shall be as follows:
71.1 	(1) If a common expense assessment has not been levied, the
71.2 	declarant shall pay all accrued operating expenses of the common
71.3 	interest community, and shall fund the replacement reserve
71.4 	component of the common expenses as required by subsection (b).
71.5 	(2) If a common expense assessment has been levied, all
71.6 	unit owners including the declarant shall pay the assessments
71.7 	allocated to their units, subject to subsection (b).the
71.8 	following:
71.9 	(i) If the declaration so provides, a declarant's
71.10 	liability, and the assessment lien, for the common expense
71.11 	assessments, exclusive of replacement reserves, on any unit
71.12 	owned by the declarant may be limited to 25 percent or more of
71.13 	any assessment, exclusive of replacement reserves, until the
71.14 	unit or any building located in the unit is substantially
71.15 	completed.  Substantial completion shall be evidenced by a
71.16 	certificate of occupancy in any jurisdiction that issues the
71.17 	certificate.
71.18 	(ii) If the declaration provides for a reduced assessment
71.19 	pursuant to paragraph (2)(i), the declarant shall be obligated,
71.20 	within 60 days following the termination of the period of the
71.21 	declarant control, to make up any operating deficit incurred by
71.22 	the association during the period of declarant control.
71.23 	(3) Notwithstanding subsections (a)(1), (a)(2), and (b), if
71.24 	the association maintains the exteriors of the buildings
71.25 	constituting or contained within the units, that part of any
71.26 	assessment that is allocated to replacement reserves referred to
71.27 	in section 515B.3-114 shall be fully levied against a unit,
71.28 	including any unit owned by a declarant, on the earlier of
71.29 	substantial completion of the exterior of (i) the building
71.30 	containing the unit or (ii) any building located within the unit.
71.31 	(b) Subject to subsection (a)(3), if the declaration so
71.32 	provides, a declarant's liability, and the assessment lien, for
71.33 	assessments, other than replacement reserves, on any unit owned
71.34 	by the declarant may be limited to 25 percent or any greater
71.35 	percentage of any assessment levied, until the unit or any
71.36 	building located in it The replacement reserve component of the
72.1 	common expenses shall be funded for each unit in accordance with
72.2 	the projected annual budget required by section 515B.4-102(23);
72.3 	provided, that the funding of replacement reserves with respect
72.4 	to a unit shall commence no later than the date that the unit or
72.5 	any building located within the unit boundaries is substantially
72.6 	completed.  Substantial completion shall be evidenced by a
72.7 	certificate of occupancy in any jurisdiction that issues the
72.8 	certificate.
72.9 	(c) After an assessment has been levied by the association,
72.10 	assessments shall be levied at least annually, based upon a
72.11 	budget approved at least annually by the association.
72.12 	(d) Except as modified by subsections (a)(1) and (2), (e),
72.13 	(f), and (g), all common expenses shall be assessed against all
72.14 	the units in accordance with the allocations established by the
72.15 	declaration pursuant to section 515B.2-108.
72.16 	(e) Unless otherwise required by the declaration:
72.17 	(1) any common expense associated with the maintenance,
72.18 	repair, or replacement of a limited common element shall be
72.19 	assessed against the units to which that limited common element
72.20 	is assigned, equally, or in any other proportion the declaration
72.21 	provides;
72.22 	(2) any common expense or portion thereof benefiting fewer
72.23 	than all of the units may be assessed exclusively against the
72.24 	units benefited, equally, or in any other proportion the
72.25 	declaration provides;
72.26 	(3) the costs of insurance may be assessed in proportion to
72.27 	risk or coverage, and the costs of utilities may be assessed in
72.28 	proportion to usage;
72.29 	(4) reasonable attorneys fees and costs incurred by the
72.30 	association in connection with (i) the collection of assessments
72.31 	and, (ii) the enforcement of this chapter, the articles, bylaws,
72.32 	declaration, or rules and regulations, against a unit owner, may
72.33 	be assessed against the unit owner's unit; and
72.34 	(5) fees, charges, late charges, fines and interest may be
72.35 	assessed as provided in section 515B.3-116(a).
72.36 	(f) Assessments levied under section 515B.3-116 to pay a
73.1 	judgment against the association may be levied only against the
73.2 	units in the common interest community at the time the judgment
73.3 	was entered, in proportion to their common expense liabilities.
73.4 	(g) If any damage to the common elements or another unit is
73.5 	caused by the act or omission of any unit owner, or occupant of
73.6 	a unit, or their invitees, the association may assess the costs
73.7 	of repairing the damage exclusively against the unit owner's
73.8 	unit to the extent not covered by insurance.
73.9 	(h) Subject to any shorter period specified by the
73.10 	declaration or bylaws, if any installment of an assessment
73.11 	becomes more than 60 days past due, then the association may,
73.12 	upon ten days' written notice to the unit owner, declare the
73.13 	entire amount of the assessment immediately due and payable in
73.14 	full.
73.15 	(i) If common expense liabilities are reallocated for any
73.16 	purpose authorized by this chapter, common expense assessments
73.17 	and any installment thereof not yet due shall be recalculated in
73.18 	accordance with the reallocated common expense liabilities.
73.19 	(j) An assessment against fewer than all of the units must
73.20 	be levied within three years after the event or circumstances
73.21 	forming the basis for the assessment, or shall be barred.

73.22 	Sec. 30. Minnesota Statutes 2004, section 515B.3-116, is
73.23 	amended to read:
73.24 	515B.3-116 LIEN FOR ASSESSMENTS.
73.25 	(a) The association has a lien on a unit for any assessment
73.26 	levied against that unit from the time the assessment becomes
73.27 	due.  If an assessment is payable in installments, the full
73.28 	amount of the assessment is a lien from the time the first
73.29 	installment thereof becomes due.  Unless the declaration
73.30 	otherwise provides, fees, charges, late charges, fines and
73.31 	interest charges pursuant to section 515B.3-102(a)(10), (11) and
73.32 	(12) are liens, and are enforceable as assessments, under this
73.33 	section.
73.34 	(b) A lien under this section is prior to all other liens
73.35 	and encumbrances on a unit except (i) liens and encumbrances
73.36 	recorded before the declaration and, in a cooperative, liens and
74.1 	encumbrances which the association creates, assumes, or takes
74.2 	subject to, (ii) any first mortgage encumbering the fee simple
74.3 	interest in the unit, or, in a cooperative, any first security
74.4 	interest encumbering only the unit owner's interest in the unit,
74.5 	and (iii) liens for real estate taxes and other governmental
74.6 	assessments or charges against the unit, and (iv) a master
74.7 	association lien under section 515B.2-121(i).  If a first
74.8 	mortgage on a unit is foreclosed, the first mortgage was
74.9 	recorded after June 1, 1994, and no owner redeems during the
74.10 	owner's period of redemption provided by chapter 580, 581, or
74.11 	582, the holder of the sheriff's certificate of sale from the
74.12 	foreclosure of the first mortgage shall take title to the unit
74.13 	subject to a lien in favor of the association for unpaid
74.14 	assessments for common expenses levied pursuant to section
74.15 	515B.3-115(a), (e)(1) to (3), (f), and (i) which became due,
74.16 	without acceleration, during the six months immediately
74.17 	preceding the first day following the end of the owner's period
74.18 	of redemption.  If a first security interest encumbering a unit
74.19 	owner's interest in a cooperative unit which is personal
74.20 	property is foreclosed, the secured party or the purchaser at
74.21 	the sale shall take title to the unit subject to unpaid
74.22 	assessments for common expenses levied pursuant to section
74.23 	515B.3-115(a), (e)(1) to (3), (f), and (i) which became due,
74.24 	without acceleration, during the six months immediately
74.25 	preceding the first day following either the disposition date
74.26 	pursuant to section 336.9-610 or the date on which the
74.27 	obligation of the unit owner is discharged pursuant to section
74.28 	336.9-622.  This subsection shall not affect the priority of
74.29 	mechanics' liens.
74.30 	(c) Recording of the declaration constitutes record notice
74.31 	and perfection of any lien under this section, and no further
74.32 	recordation of any notice of or claim for the lien is required.
74.33 	(d) Proceedings to enforce an assessment lien shall be
74.34 	instituted within three years after the last installment of the
74.35 	assessment becomes payable, or shall be barred.
74.36 	(e) The unit owner of a unit at the time an assessment is
75.1 	due shall be personally liable to the association for payment of
75.2 	the assessment levied against the unit.  If there are multiple
75.3 	owners of the unit, they shall be jointly and severally liable.
75.4 	(f) This section does not prohibit actions to recover sums
75.5 	for which subsection (a) creates a lien nor prohibit an
75.6 	association from taking a deed in lieu of foreclosure. The
75.7 	commencement of an action to recover the sums is not an election
75.8 	of remedies if it is dismissed before commencement of
75.9 	foreclosure of the lien provided for by this section.
75.10 	(g) The association shall furnish to a unit owner or the
75.11 	owner's authorized agent upon written request of the unit owner
75.12 	or the authorized agent a statement setting forth the amount of
75.13 	unpaid assessments currently levied against the owner's unit.
75.14 	If the unit owner's interest is real estate, the statement shall
75.15 	be in recordable form.  The statement shall be furnished within
75.16 	ten business days after receipt of the request and is binding on
75.17 	the association and every unit owner.
75.18 	(h) The association's lien may be foreclosed as provided in
75.19 	this subsection.
75.20 	(1) In a condominium or planned community, the
75.21 	association's lien may be foreclosed in a like manner as a
75.22 	mortgage containing a power of sale pursuant to chapter 580, or
75.23 	by action pursuant to chapter 581.  The association shall have a
75.24 	power of sale to foreclose the lien pursuant to chapter 580.
75.25 	(2) In a cooperative whose unit owners' interests are real
75.26 	estate, the association's lien shall be foreclosed in a like
75.27 	manner as a mortgage on real estate as provided in paragraph (1).
75.28 	(3) In a cooperative whose unit owners' interests in the
75.29 	units are personal property, the association's lien shall be
75.30 	foreclosed in a like manner as a security interest under article
75.31 	9 of chapter 336.  In any disposition pursuant to section
75.32 	336.9-610 or retention pursuant to sections 336.9-620 to
75.33 	336.9-622, the rights of the parties shall be the same as those
75.34 	provided by law, except (i) notice of sale, disposition, or
75.35 	retention shall be served on the unit owner 90 days prior to
75.36 	sale, disposition, or retention, (ii) the association shall be
76.1 	entitled to its reasonable costs and attorney fees not exceeding
76.2 	the amount provided by section 582.01, subdivision 1a, (iii) the
76.3 	amount of the association's lien shall be deemed to be adequate
76.4 	consideration for the unit subject to disposition or retention,
76.5 	notwithstanding the value of the unit, and (iv) the notice of
76.6 	sale, disposition, or retention shall contain the following
76.7 	statement in capital letters with the name of the association or
76.8 	secured party filled in:
76.9 	"THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of
76.10 	association or secured party) HAS BEGUN PROCEEDINGS UNDER
76.11 	MINNESOTA STATUTES, CHAPTER 515B, TO FORECLOSE ON YOUR INTEREST
76.12 	IN YOUR UNIT FOR THE REASON SPECIFIED IN THIS NOTICE.  YOUR
76.13 	INTEREST IN YOUR UNIT WILL TERMINATE 90 DAYS AFTER SERVICE OF
76.14 	THIS NOTICE ON YOU UNLESS BEFORE THEN:
76.15 	(a) THE PERSON AUTHORIZED BY (fill in the name of
76.16 	association or secured party) AND DESCRIBED IN THIS NOTICE TO
76.17 	RECEIVE PAYMENTS RECEIVES FROM YOU:
76.18 	(1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS
76.19 	(2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS
76.20 	(3) $500 TO APPLY TO ATTORNEYS FEES ACTUALLY EXPENDED OR
76.21 	INCURRED; PLUS
76.22 	(4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO
76.23 	(fill in name of association or secured party) AFTER THE DATE OF
76.24 	THIS NOTICE; OR
76.25 	(b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
76.26 	FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL YOUR
76.27 	CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR
76.28 	SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND
76.29 	GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.
76.30 	IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS
76.31 	WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP
76.32 	RIGHTS IN YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU
76.33 	WILL LOSE ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL
76.34 	LOSE YOUR RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR
76.35 	RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND
76.36 	YOU WILL BE EVICTED.  IF YOU HAVE ANY QUESTIONS ABOUT THIS
77.1 	NOTICE, CONTACT AN ATTORNEY IMMEDIATELY."
77.2 	(4) In any foreclosure pursuant to chapter 580, 581, or
77.3 	582, the rights of the parties shall be the same as those
77.4 	provided by law, except (i) the period of redemption for unit
77.5 	owners shall be six months from the date of sale or a lesser
77.6 	period authorized by law, (ii) in a foreclosure by advertisement
77.7 	under chapter 580, the foreclosing party shall be entitled to
77.8 	costs and disbursements of foreclosure and attorneys fees
77.9 	authorized by the declaration or bylaws, notwithstanding the
77.10 	provisions of section 582.01, subdivisions 1 and 1a, (iii) in a
77.11 	foreclosure by action under chapter 581, the foreclosing party
77.12 	shall be entitled to costs and disbursements of foreclosure and
77.13 	attorneys fees as the court shall determine, and (iv) the amount
77.14 	of the association's lien shall be deemed to be adequate
77.15 	consideration for the unit subject to foreclosure,
77.16 	notwithstanding the value of the unit.
77.17 	(i) If a holder of a sheriff's certificate of sale, prior
77.18 	to the expiration of the period of redemption, pays any past due
77.19 	or current assessments, or any other charges lienable as
77.20 	assessments, with respect to the unit described in the sheriff's
77.21 	certificate, then the amount paid shall be a part of the sum
77.22 	required to be paid to redeem under section 582.03.
77.23 	(j) In a cooperative, following foreclosure if the unit
77.24 	owner fails to redeem before the expiration of the redemption
77.25 	period in a foreclosure of the association's assessment lien,
77.26 	the association may bring an action for eviction against the
77.27 	unit owner and any persons in possession of the unit, and in
77.28 	that case section 504B.291 shall not apply.
77.29 	(k) An association may assign its lien rights in the same
77.30 	manner as any other secured party.

77.31 	Sec. 31. Minnesota Statutes 2004, section 515B.3-117, is
77.32 	amended to read:
77.33 	515B.3-117 OTHER LIENS.
77.34 	(a) Except in a cooperative and except as otherwise
77.35 	provided in this chapter or in a security instrument, an
77.36 	individual unit owner may have the unit owner's unit released
78.1 	from a lien if the unit owner pays the lienholder the portion of
78.2 	the amount which the lien secures that is attributable to the
78.3 	unit.  Upon the receipt of payment, the lienholder shall
78.4 	promptly deliver to the unit owner a recordable partial
78.5 	satisfaction and release of lien releasing the unit from the
78.6 	lien.  The release shall be deemed to include a release of any
78.7 	rights in the common elements appurtenant to the unit.  The
78.8 	portion of the amount which a lien secures that is attributable
78.9 	to the unit shall be equal to the total amount which the lien
78.10 	secures multiplied by a percentage calculated by dividing the
78.11 	common expense liability attributable to the unit by the common
78.12 	expense liability attributable to all units against which the
78.13 	lien has been recorded, or in the case of a lien under
78.14 	subsection (b), the units against which the lien is permitted or
78.15 	required to be recorded.  At the request of a lien claimant or
78.16 	unit owners, the association shall provide a written statement
78.17 	of the percentage of common expense liability attributable to
78.18 	all units.  After a unit owner's payment pursuant to this
78.19 	section, the association may not assess the unit for any common
78.20 	expense incurred thereafter in connection with the satisfaction
78.21 	or defense against the lien.
78.22 	(b) Labor performed or materials furnished for the
78.23 	improvement of a unit shall be the basis for the recording of a
78.24 	lien against that unit pursuant to the provisions of chapter 514
78.25 	but shall not be the basis for the recording of a lien against
78.26 	the common elements.  Labor performed or materials furnished for
78.27 	the improvement of common elements, for which a lien may be
78.28 	recorded under chapter 514,if duly authorized by the
78.29 	association, shall be deemed to be performed or furnished with
78.30 	the express consent of each unit owner, and shall be perfected
78.31 	by recording a lien against all the units in the common interest
78.32 	community pursuant to the provisions of chapter 514, but shall
78.33 	not be the basis for the recording of a lien against the common
78.34 	elements except in the case of a condominium on registered land,
78.35 	in which case a lien must be filed pursuant to section 508.351,
78.36 	subdivision 3, or 508A.351, subdivision 3.  Where a lien is
79.1 	recorded against the units for labor performed or material
79.2 	furnished for the improvement of common elements, the
79.3 	association shall be deemed to be the authorized agent of the
79.4 	unit owners for purposes of receiving the notices required under
79.5 	sections 514.011 and 514.08, subdivision 1, clause (2).
79.6 	(c) A security interest in a cooperative whose unit owners'
79.7 	interests in the units are personal property shall be perfected
79.8 	by recording a financing statement in the UCC filing section of
79.9 	the office of the recording officer for the county in which the
79.10 	unit is located.  In any disposition by a secured party pursuant
79.11 	to section 336.9-610 or retention pursuant to sections 336.9-620
79.12 	to 336.9-622, the rights of the parties shall be the same as
79.13 	those provided by law, subject to the exceptions and
79.14 	requirements set forth in section 515B.3-116(h)(3), and except
79.15 	that the unit owner has the right to reinstate the debt owing to
79.16 	the secured party by paying to the secured party, prior to the
79.17 	effective date of the disposition or retention, the amount which
79.18 	would be required to reinstate the debt under section 580.30 if
79.19 	the unit were wholly real estate.

79.20 	Sec. 32. Minnesota Statutes 2004, section 515B.3-120, is
79.21 	amended to read:
79.22 	515B.3-120 DECLARANT DUTIES; TURNOVER OF RECORDS.
79.23 	(a) During any period of declarant control pursuant to
79.24 	section 515B.3-103(c), declarant and any of its representatives
79.25 	who are acting as officers or directors of the association shall:
79.26 	(1) cause the association to be operated and administered
79.27 	in accordance with its articles of incorporation and bylaws, the
79.28 	declaration and applicable law;
79.29 	(2) be subject to all fiduciary obligations and obligations
79.30 	of good faith applicable to any persons serving a corporation in
79.31 	that capacity;
79.32 	(3) cause the association's funds to be maintained in a
79.33 	separate bank account or accounts solely in the association's
79.34 	name, from and after the date of creation of the association;
79.35 	and
79.36 	(4) cause the association to maintain complete and accurate
80.1 	records in compliance with section 515B.3-118.
80.2 	(b) At such time as any period of declarant control
80.3 	terminates, declarant shall cause to be delivered to the board
80.4 	elected by the unit owners exclusive control of all funds of the
80.5 	association, all contracts and agreements to which are binding
80.6 	on the association was or is a party, all corporate records of
80.7 	the association including financial records, copies of all CIC
80.8 	plats and supplementary CIC plats, personal property owned or
80.9 	represented to be owned by the association, assignments of all
80.10 	declarant's rights and interests under the warranties if not in
80.11 	the name of the association, and, to the extent they are in the
80.12 	control or possession of the declarant, copies of all plans and
80.13 	specifications in its control or possession relating to the
80.14 	common interest community buildings and related
80.15 	improvements which are part of the common elements, and
80.16 	operating manuals and warranty materials relating to any
80.17 	equipment or personal property utilized in the operation of the
80.18 	common interest community.  The declarant's obligation to turn
80.19 	over the foregoing items shall continue to include additional
80.20 	new or changed items in its possession or control.
80.21 	(c) A declarant in control person entitled to appoint the
80.22 	directors of a master association pursuant to section
80.23 	515B.2-121(c)(3), and the master association's officers and
80.24 	directors, shall be subject to the same duties and obligations
80.25 	with respect to the master association as are described in
80.26 	subsections (a),and (b) and (c) , to the extent
80.27 	applicable. The period of declarant control of the master
80.28 	association shall terminate as provided in section
80.29 	515B.2-121(f).A master association may not be used to
80.30 	circumvent or avoid any obligation or restriction imposed on a
80.31 	declarant or its affiliates by this chapter.

80.32 	Sec. 33. Minnesota Statutes 2004, section 515B.4-101, is
80.33 	amended to read:
80.34 	515B.4-101 APPLICABILITY; DELIVERY OF DISCLOSURE
80.35 	STATEMENT.
80.36 	(a) Sections 515B.4-101 through 515B.4-118 apply to all
81.1 	units subject to this chapter, except as provided in subsection
81.2 	(c) or as modified or waived by written agreement of purchasers
81.3 	of a unit which is restricted to nonresidential use.
81.4 	(b) Subject to subsections (a) and (c), a declarant who
81.5 	offers a unit to a purchaser shall deliver to the purchaser a
81.6 	current disclosure statement which complies with the
81.7 	requirements of section 515B.4-102.  The disclosure statement
81.8 	shall include any material amendments to the disclosure
81.9 	statement made prior to the conveyance of the unit to the
81.10 	purchaser.  The declarant shall be liable to the purchaser to
81.11 	whom it delivered the disclosure statement for any false or
81.12 	misleading statement set forth therein or for any omission of a
81.13 	material fact therefrom.
81.14 	(c) Neither a disclosure statement nor a resale disclosure
81.15 	certificate need be prepared or delivered in the case of:
81.16 	(1) a gratuitous transfer;
81.17 	(2) a transfer pursuant to a court order;
81.18 	(3) a transfer to a government or governmental agency;
81.19 	(4) a transfer to a secured party by foreclosure or deed in
81.20 	lieu of foreclosure;
81.21 	(5) an option to purchase a unit, until exercised;
81.22 	(6) a transfer to a person who "controls" or is "controlled
81.23 	by," the grantor as those terms are defined with respect to a
81.24 	declarant under section 515B.1-103(2);
81.25 	(7) a transfer by inheritance;
81.26 	(8) a transfer of special declarant rights under section
81.27 	515B.3-104; or
81.28 	(9) a transfer in connection with a change of form of
81.29 	common interest community under section 515B.2-123.
81.30 	(d) A purchase agreement for a unit shall contain the
81.31 	following notice:  "The following notice is required by
81.32 	Minnesota Statutes.  The purchaser is entitled to receive a
81.33 	disclosure statement or resale disclosure certificate, as
81.34 	applicable.  The disclosure statement or resale disclosure
81.35 	certificate contains important information regarding the common
81.36 	interest community and the purchaser's cancellation rights."
82.1 	(e) A purchase agreement for the sale, to the initial
82.2 	occupant, of a platted lot or other parcel of real estate (i)
82.3 	which is subject to a master declaration, (ii) which is intended
82.4 	for residential occupancy, and (iii) which does not and is not
82.5 	intended to constitute a unit, shall contain the following
82.6 	notice:  "The following notice is required by Minnesota
82.7 	Statutes:  The real estate to be conveyed under this agreement
82.8 	is or will be subject to a master association as defined in
82.9 	Minnesota Statutes, chapter 515B.  The master association is
82.10 	obligated to provide to the purchaser, pursuant to Minnesota
82.11 	Statutes, section 515B.4-102(c), upon the purchaser's request, a
82.12 	statement containing the information required by Minnesota
82.13 	Statutes, section 515B.4-102(a)(20), with respect to the master
82.14 	association, prior to the time that the purchaser signs a
82.15 	purchase agreement for the real estate.  The statement contains
82.16 	important information regarding the master association and the
82.17 	purchaser's obligations thereunder."  A claim by a purchaser
82.18 	based upon a failure to include the foregoing notice in a
82.19 	purchase agreement:
82.20 	(1) shall be limited to legal, and not equitable, remedies;
82.21 	(2) shall be barred unless it is commenced within the time
82.22 	period specified in section 515B.4-115(a); or 
82.23 	(3) may be waived by a separate written document signed by
82.24 	the seller and purchaser.

82.25 	Sec. 34. Minnesota Statutes 2004, section 515B.4-102, is
82.26 	amended to read:
82.27 	515B.4-102 DISCLOSURE STATEMENT; GENERAL PROVISIONS.
82.28 	(a) A disclosure statement shall fully and accurately
82.29 	disclose:
82.30 	(1) the name and, if available, the number of the common
82.31 	interest community;
82.32 	(2) the name and principal address of the declarant;
82.33 	(3) the number of units which the declarant has the right
82.34 	to include in the common interest community and a statement that
82.35 	the common interest community is either a condominium,
82.36 	cooperative, or planned community;
83.1 	(4) a general description of the common interest community,
83.2 	including, at a minimum, (i) the number of buildings, (ii) the
83.3 	number of dwellings per building, (iii) the type of
83.4 	construction, (iv) whether the common interest community
83.5 	involves new construction or rehabilitation, (v) whether any
83.6 	building was wholly or partially occupied, for any purpose,
83.7 	before it was added to the common interest community and the
83.8 	nature of the occupancy, and (vi) a general description of any
83.9 	roads, trails, or utilities that are located on the common
83.10 	elements and that the association or a master association will
83.11 	be required to maintain;
83.12 	(5) declarant's schedule of commencement and completion of
83.13 	construction of any buildings and other improvements that the
83.14 	declarant is obligated to build pursuant to section 515B.4-117;
83.15 	(6) any expenses or services, not reflected in the budget,
83.16 	that the declarant pays or provides, which may become a common
83.17 	expense; the projected common expense attributable to each of
83.18 	those expenses or services; and an explanation of declarant's
83.19 	limited assessment liability under section 515B.3-115,
83.20 	subsection (b);
83.21 	(7) any initial or special fee due from the purchaser to
83.22 	the declarant or the association at closing, together with a
83.23 	description of the purpose and method of calculating the fee;
83.24 	(8) identification of any liens, defects, or encumbrances
83.25 	which will continue to affect the title to a unit or to any real
83.26 	property owned by the association after the contemplated
83.27 	conveyance;
83.28 	(9) a description of any financing offered or arranged by
83.29 	the declarant;
83.30 	(10) a statement as to whether application has been made
83.31 	for any project approvals for the common interest community from
83.32 	the Federal National Mortgage Association (FNMA), Federal Home
83.33 	Loan Mortgage Corporation (FHLMC), Department of Housing and
83.34 	Urban Development (HUD) or Department of Veterans Affairs (VA),
83.35 	and which, if any, such final approvals have been received;
83.36 	(11) the terms of any warranties provided by the declarant,
84.1 	including copies of chapter 327A, and sections 515B.4-112
84.2 	through 515B.4-115, and any other applicable statutory
84.3 	warranties,and a statement of any limitations on the
84.4 	enforcement of the applicable warranties or on damages;
84.5 	(12) a statement that:  (i) within ten days after the
84.6 	receipt of a disclosure statement, a purchaser may cancel any
84.7 	contract for the purchase of a unit from a declarant; provided,
84.8 	that the right to cancel terminates upon the purchaser's
84.9 	voluntary acceptance of a conveyance of the unit from the
84.10 	declarant or by the purchaser agreeing to modify or waive the
84.11 	right to cancel in the manner provided by section 515B.4-106,
84.12 	paragraph (a); (ii) if a purchaser receives a disclosure
84.13 	statement more than ten days before signing a purchase
84.14 	agreement, the purchaser cannot cancel the purchase agreement;
84.15 	and (iii) if a declarant obligated to deliver a disclosure
84.16 	statement fails to deliver a disclosure statement which
84.17 	substantially complies with this chapter to a purchaser to whom
84.18 	a unit is conveyed, the declarant shall be liable to the
84.19 	purchaser as provided in section 515B.4-106(d);
84.20 	(13) a statement disclosing to the extent of the
84.21 	declarant's or an affiliate of a declarant's actual knowledge,
84.22 	after reasonable inquiry, any unsatisfied judgments or lawsuits
84.23 	to which the association is a party, and the status of those
84.24 	lawsuits which are material to the common interest community or
84.25 	the unit being purchased;
84.26 	(14) a statement (i) describing the conditions under which
84.27 	earnest money will be held in and disbursed from the escrow
84.28 	account, as set forth in section 515B.4-109, (ii) that the
84.29 	earnest money will be returned to the purchaser if the purchaser
84.30 	cancels the contract pursuant to section 515B.4-106, and (iii)
84.31 	setting forth the name and address of the escrow agent;
84.32 	(15) a detailed description of the insurance coverage
84.33 	provided by the association for the benefit of unit owners,
84.34 	including a statement as to which, if any, of the items referred
84.35 	to in section 515B.3-113, subsection (b), are insured by the
84.36 	association;
85.1 	(16) any current or expected fees or charges, other than
85.2 	assessments for common expenses, to be paid by unit owners for
85.3 	the use of the common elements or any other improvements or
85.4 	facilities;
85.5 	(17) the financial arrangements, including any
85.6 	contingencies, which have been made to provide for completion of
85.7 	all improvements that the declarant is obligated to build
85.8 	pursuant to section 515B.4-118, or a statement that no such
85.9 	arrangements have been made;
85.10 	(18) in a cooperative:  (i) whether the unit owners will be
85.11 	entitled for federal and state tax purposes, to deduct payments
85.12 	made by the association for real estate taxes and interest paid
85.13 	to the holder of a security interest encumbering the
85.14 	cooperative; and (ii) a statement as to the effect on the unit
85.15 	owners if the association fails to pay real estate taxes or
85.16 	payments due the holder of a security interest encumbering the
85.17 	cooperative; and (iii) the principal amount and a general
85.18 	description of the terms of any blanket mortgage, contract for
85.19 	deed, or other blanket security instrument encumbering the
85.20 	cooperative property;
85.21 	(19) a statement:  (i) that real estate taxes for the unit
85.22 	or any real property owned by the association are not delinquent
85.23 	or, if there are delinquent real estate taxes, describing the
85.24 	property for which the taxes are delinquent, stating the amount
85.25 	of the delinquent taxes, interest and penalties, and stating the
85.26 	years for which taxes are delinquent, and (ii) setting forth the
85.27 	amount of real estate taxes, including the amount of any special
85.28 	assessment certified for payment with the real estate taxes, due
85.29 	and payable with respect to the unit in the year in which the
85.30 	disclosure statement is given, if real estate taxes have been
85.31 	separately assessed against the unit;
85.32 	(20) if the association or the purchaser of the unit will
85.33 	be a member of a master association, a statement to that effect,
85.34 	and all of the following information with respect to the master
85.35 	association:  (i) a copy of the master declaration, if any
85.36 	(other than any CIC plat),the articles of incorporation,
86.1 	bylaws, and rules and regulations for the master association,
86.2 	together with any amendments thereto; (ii) the name, address and
86.3 	general description of the master association, including a
86.4 	general description of any other association, unit owners, or
86.5 	other persons which are or may become members; (iii) a
86.6 	description of any nonresidential use permitted on any property
86.7 	subject to the master association; (iv) a statement as to the
86.8 	estimated maximum number of associations, unit owners or other
86.9 	persons which may become members of the master association, and
86.10 	the degree and period of control of the master association by a
86.11 	declarant or other person; (v) a description of any facilities
86.12 	intended for the benefit of the members of the master
86.13 	association and not located on property owned or controlled by a
86.14 	member or the master association; (vi) the financial
86.15 	arrangements, including any contingencies, which have been made
86.16 	to provide for completion of the facilities referred to in
86.17 	subsection (v), or a statement that no arrangements have been
86.18 	made; (vii) any current balance sheet of the master association
86.19 	and a projected or current annual budget, as applicable, which
86.20 	budget shall include with respect to the master association
86.21 	those items in paragraph (23), clauses (i) through (iv) (iii),
86.22 	and the projected monthly common expense assessment for each
86.23 	type of unit, lot, or other parcel of real estate which is or is
86.24 	planned to be subject to assessment; (viii) a description of any
86.25 	expenses or services not reflected in the budget, paid for or
86.26 	provided by a declarant or a person executing the master
86.27 	declaration, which may become an expense of the master
86.28 	association in the future; (ix) a description of any powers
86.29 	delegated to and accepted by the master association pursuant to
86.30 	section 515B.2-121(f)(2); (x) identification of any liens,
86.31 	defects or encumbrances that will continue to affect title to
86.32 	property owned or operated by the master association for the
86.33 	benefit of its members; (xi) the terms of any warranties
86.34 	provided by any person for construction of facilities in which
86.35 	the members of the master association have or may have an
86.36 	interest, and any known defects in the facilities which would
87.1 	violate the standards described in section 515B.4-112(b); (xii)
87.2 	a statement disclosing, to the extent of the declarant's
87.3 	knowledge,after inquiry of the master association, any
87.4 	unsatisfied judgments or lawsuits to which the master
87.5 	association is a party, and the status of those lawsuits which
87.6 	are material to the master association; (xiii) a description of
87.7 	any insurance coverage provided for the benefit of its members
87.8 	by the master association; and (xiv) any current or expected
87.9 	fees or charges, other than assessments by the master
87.10 	association, to be paid by members of the master association for
87.11 	the use of any facilities intended for the benefit of the
87.12 	members;
87.13 	(21) a statement as to whether the unit will be
87.14 	substantially completed at the time of conveyance to a
87.15 	purchaser, and if not substantially completed, who is
87.16 	responsible to complete and pay for the construction of the
87.17 	unit;
87.18 	(22) a copy of the declaration and any amendments thereto,
87.19 	(exclusive of the CIC plat), any other recorded covenants,
87.20 	conditions restrictions, and reservations affecting the common
87.21 	interest community; the articles of incorporation, bylaws and
87.22 	any rules or regulations of the association; any agreement
87.23 	excluding or modifying any implied warranties; any agreement
87.24 	reducing the statute of limitations for the enforcement of
87.25 	warranties; any contracts or leases to be signed by purchaser at
87.26 	closing; and a brief narrative description of any (i) contracts
87.27 	or leases that are or may be subject to cancellation by the
87.28 	association under section 515B.3-105and (ii) any material
87.29 	agreements entered into between the declarant and a governmental
87.30 	entity that affect the common interest community; and
87.31 	(23) any current a balance sheet for the association,
87.32 	current within 90 days; a projected annual budget for the
87.33 	association for the year in which the first unit is conveyed to
87.34 	a purchaser, and thereafter the current annual budget of the
87.35 	association;and a statement identifying the party responsible
87.36 	for the preparation of the budget. The budget shall assume that
88.1 	all units intended to be included in the common interest
88.2 	community, based upon the declarant's good faith estimate, have
88.3 	been subjected to the declaration; provided, that additional
88.4 	budget portrayals based upon a lesser number of units are
88.5 	permitted.The budget shall include, without limitation:  (i) a
88.6 	statement of the amount included in the budget as a reserve for
88.7 	maintenance, repair and replacement; (ii) a statement of any
88.8 	other reserves; (iii) the projected common expense for each
88.9 	category of expenditures for the association; and (iv) the
88.10 	projected monthly common expense assessment for each type of
88.11 	unit; and (v) a footnote or other reference to those components
88.12 	of the common interest community the maintenance, repair, or
88.13 	replacement of which the budget assumes will be funded by
88.14 	assessments under section 515B.3-115(e) rather than by
88.15 	assessments included in the association's annual budget, and a
88.16 	statement referencing section 515B.3-115(e)(1) or (2) as the
88.17 	source of funding.  If, based upon the association's then
88.18 	current budget, the monthly common expense assessment for the
88.19 	unit at the time of conveyance to the purchaser is anticipated
88.20 	to exceed the monthly assessment stated in the budget, a
88.21 	statement to such effect shall be included.
88.22 	(b) A declarant shall promptly amend the disclosure
88.23 	statement to reflect any material change in the information
88.24 	required by this chapter.
88.25 	(c) The master association, within ten days after a request
88.26 	by a declarant, or any a holder of declarant rights, or a
88.27 	purchaser referred to in section 515B.4-101(e),or the
88.28 	authorized representative of any of them, shall furnish the
88.29 	information required to be provided by subsection (a)(20).  A
88.30 	declarant or other person who provides information pursuant to
88.31 	subsection (a)(20) is not liable to the purchaser for any
88.32 	erroneous information if the declarant or other person:  (i) is
88.33 	not an affiliate of or related in any way to a person authorized
88.34 	to appoint the master association board pursuant to section
88.35 	515B.2-121(c)(3), and (ii) has no actual knowledge that the
88.36 	information is incorrect.

89.1 	Sec. 35. Minnesota Statutes 2004, section 515B.4-105, is
89.2 	amended to read:
89.3 	515B.4-105 COMMON INTEREST COMMUNITY WITH BUILDING ONCE
89.4 	OCCUPIED.
89.5 	The disclosure statement of a common interest community
89.6 	containing any building that was at any time before the creation
89.7 	of the common interest community wholly or partially occupied,
89.8 	for any purpose, by persons other than purchasers or persons who
89.9 	occupied with the consent of purchasers, shall contain, in
89.10 	addition to the information required by sections 515B.4-102,
89.11 	515B.4-103 and 515B.4-104:
89.12 	(1) a professional opinion prepared by a registered
89.13 	professional architect or engineer, licensed in this state,
89.14 	describing the present current condition of all structural
89.15 	components,and mechanical and electrical installations,
89.16 	material to the use and enjoyment of the building,to the extent
89.17 	reasonably ascertainable without disturbing the improvements or
89.18 	dismantling the equipment, which will be in place or be
89.19 	operational at the time of conveyance of the first unit to a
89.20 	person other than a declarant;
89.21 	(2) a statement by the declarant of the expected useful
89.22 	life of each item reported on in paragraph (1) or a statement
89.23 	that no representations are made in that regard; and
89.24 	(3) a list of any outstanding notices of uncured violations
89.25 	of building code or other municipal regulations, together with
89.26 	the estimated cost of curing those violations.

89.27 	Sec. 36. Minnesota Statutes 2004, section 515B.4-106, is
89.28 	amended to read:
89.29 	515B.4-106 PURCHASER'S RIGHT TO CANCEL.
89.30 	(a) A person required to deliver a disclosure statement
89.31 	pursuant to section 515B.4-101(b) shall provide at least one of
89.32 	the purchasers of the unit with a copy of the disclosure
89.33 	statement and all amendments thereto before conveyance of the
89.34 	unit.  If a purchaser is not given a disclosure statement more
89.35 	than five ten days before execution of the purchase agreement,
89.36 	the purchaser may, before conveyance, cancel the purchase
90.1 	agreement within five ten days after first receiving the
90.2 	disclosure statement.  If a purchaser is given the disclosure
90.3 	statement more than five ten days before execution of the
90.4 	purchase agreement, the purchaser may not cancel the purchase
90.5 	agreement pursuant to this section. Except as expressly
90.6 	provided in this chapter,The five-day ten-day rescission period
90.7 	cannot be waived may be modified or waived, in writing, by
90.8 	agreement of the purchaser of a unit only after the purchaser
90.9 	has received and had an opportunity to review the disclosure
90.10 	statement.  The person required to deliver a disclosure
90.11 	statement may not condition the sale of the unit on the
90.12 	purchaser agreeing to modify or waive the purchaser's ten-day
90.13 	right of rescission, may not contractually obligate the
90.14 	purchaser to modify or waive the purchaser's ten-day right of
90.15 	rescission, and may not include a modification or waiver of the
90.16 	ten-day right of rescission in any purchase agreement for the
90.17 	unit.  To be effective, a modification or waiver of a
90.18 	purchaser's ten-day right of rescission must be evidenced by an
90.19 	instrument separate from the purchase agreement signed by the
90.20 	purchaser more than three days after the purchaser signs the
90.21 	purchase agreement.
90.22 	(b) If an amendment to the disclosure statement materially
90.23 	and adversely affects a purchaser, then the purchaser shall have
90.24 	five ten days after delivery of the amendment to cancel the
90.25 	purchase agreement in accordance with this section. The ten-day
90.26 	rescission period may be modified or waived, in writing, by
90.27 	agreement of the purchaser of a unit only after the purchaser
90.28 	has received and had an opportunity to review the disclosure
90.29 	statement.  To be effective, a modification or waiver of a
90.30 	purchaser's ten-day right of rescission under this section must
90.31 	be evidenced by a written instrument separate from the purchase
90.32 	agreement signed by the purchaser more than three days after the
90.33 	purchaser receives the amendment.
90.34 	(c) If a purchaser elects to cancel a purchase agreement
90.35 	pursuant to this section, the purchaser may do so by giving
90.36 	notice thereof pursuant to section 515B.1-115.  Cancellation is
91.1 	without penalty, and all payments made by the purchaser before
91.2 	cancellation shall be refunded promptly.  Notwithstanding
91.3 	anything in this section to the contrary, the purchaser's
91.4 	cancellation rights under this section terminate upon the
91.5 	purchaser's acceptance of a conveyance of the unit.
91.6 	(d) If a declarant obligated to deliver a disclosure
91.7 	statement fails to deliver to the purchaser a disclosure
91.8 	statement which substantially complies with this chapter, the
91.9 	declarant shall be liable to the purchaser in the amount of
91.10 	$1,000, in addition to any damages or other amounts recoverable
91.11 	under this chapter or otherwise.  Any action brought under this
91.12 	subsection shall be commenced within the time period specified
91.13 	in section 515B.4-115, subsection (a).

91.14 	Sec. 37. Minnesota Statutes 2004, section 515B.4-107, is
91.15 	amended to read:
91.16 	515B.4-107 RESALE OF UNITS.
91.17 	(a) In the event of a resale of a unit by a unit owner
91.18 	other than a declarant, unless exempt under section
91.19 	515B.4-101(c), the unit owner shall furnish to a purchaser,
91.20 	before execution of any purchase agreement for a unit or
91.21 	otherwise before conveyance, the following documents relating to
91.22 	the association or to the master association, if applicable:
91.23 	(1) copies of the declaration (other than any CIC plat),
91.24 	the articles of incorporation and bylaws, any rules and
91.25 	regulations, and any amendments thereto or supplemental
91.26 	declarations;
91.27 	(2) the organizational and operating documents relating to
91.28 	the master association, if any; and
91.29 	(3) a resale disclosure certificate from the association
91.30 	dated not more than 90 days prior to the date of the purchase
91.31 	agreement or the date of conveyance, whichever is earlier,
91.32 	containing the information set forth in subsection (b).
91.33 	(b) The resale disclosure certificate must be in
91.34 	substantially the following form:
91.35 	COMMON INTEREST COMMUNITY
91.36 	RESALE DISCLOSURE CERTIFICATE
92.1 	Name of Common Interest Community:..............................
92.2 	Name of Association:............................................
92.3 	Address of Association:.........................................
92.4 	Unit Number(s) (include principal unit and any garage, storage,
92.5 	or other auxiliary unit(s)):.....................................
92.6 	The following information is furnished by the association
92.7 	named above according to Minnesota Statutes, section 515B.4-107.
92.8 	1.  There is no right of first refusal or other restraint
92.9 	on the free alienability of the above unit(s) contained in the
92.10 	declaration, bylaws, rules and regulations, or any amendment to
92.11 	them, except as follows:........................................
92.12 	................................................................
92.13 	................................................................
92.14 	................................................................
92.15 	2.  The following periodic installments of common expense
92.16 	assessments and special assessments are payable with respect to
92.17 	the above unit(s):
92.18 	a.  Annual assessment
92.19 	installments:      $.......   Due: .............
92.20 	b.  Special assessment
92.21 	installments:      $.......   Due: .............
92.22 	c.  Unpaid assessments, fines, or other charges:
92.23 	(1)   Annual          $.......
92.24 	(2)   Special         $.......
92.25 	(3)   Fines           $.......
92.26 	(4)   Other Charges   $.......
92.27 	d.  The association has/has not (strike one) approved
92.28 	a plan for levying certain common expense
92.29 	assessments against fewer than all the units
92.30 	according to Minnesota Statutes, section 515B.3-115,
92.31 	subsection (e).  If a plan is approved, a description
92.32 	of the plan is attached to this certificate.
92.33 	3.  In addition to the amounts due under paragraph 2, the
92.34 	following additional fees or charges other than assessments are
92.35 	payable by unit owners (include late payment charges, user fees,
92.36 	etc.):..........................................................
93.1 	................................................................
93.2 	................................................................
93.3 	4.  There are no extraordinary expenditures approved by the
93.4 	association, and not yet assessed, for the current and two
93.5 	succeeding fiscal years, except as follows:.....................
93.6 	................................................................
93.7 	................................................................
93.8 	5.  The association has reserved the following amounts for
93.9 	maintenance, repair, or replacement:............................
93.10 	................................................................
93.11 	................................................................
93.12 	The following portions of these reserves are designated for the
93.13 	following specified projects or uses:...........................
93.14 	................................................................
93.15 	6.  The following documents are furnished with this
93.16 	certificate according to statute:
93.17 	a.  The most recent regularly prepared balance sheet and
93.18 	income and expense statement of the association.
93.19 	b.  The current budget of the association.
93.20 	7.  There are no unsatisfied judgments against the
93.21 	association, except as follows (identify creditor and amount):..
93.22 	................................................................
93.23 	................................................................
93.24 	8.  There are no pending lawsuits to which the association
93.25 	is a party, except as follows (identify and summarize status):..
93.26 	................................................................
93.27 	................................................................
93.28 	................................................................
93.29 	9.  Description of insurance coverages:
93.30 	a.  The association provides the following insurance
93.31 	coverage for the benefit of unit owners:  (Reference may be made
93.32 	to applicable sections of the declaration or bylaws; however,
93.33 	any additional coverages should be described in this space)
93.34 	................................................................
93.35 	................................................................
93.36 	................................................................
94.1 	b.  The following described fixtures, decorating items, or
94.2 	construction items within the unit referred to in Minnesota
94.3 	Statutes, section 515B.3-113, subsection (b), are insured by the
94.4 	association (check as applicable):
94.5 	..._____Ceiling or wall finishing materials
94.6 	..._____Floor coverings
94.7 	..._____Cabinetry
94.8 	..._____Finished millwork
94.9 	..._____Electrical or plumbing fixtures serving a single unit
94.10 	..._____Built-in appliances
94.11 	..._____Improvements and betterments as originally constructed
94.12 	..._____Additional improvements and betterments installed by
94.13 	           unit owners
94.14 	10.  The board of directors of the association has not
94.15 	notified the unit owner (i) that any alterations or improvements
94.16 	to the unit or to the limited common elements assigned to it
94.17 	violate any provision of the declaration; or (ii) that the unit
94.18 	is in violation of any governmental statute, ordinance, code, or
94.19 	regulation, except as follows:...................................
94.20 	.................................................................
94.21 	11.  The remaining term of any leasehold estate affecting
94.22 	the common interest community and the premises governing any
94.23 	extension or renewal of it are as follows:......................
94.24 	................................................................
94.25 	................................................................
94.26 	12.  In addition to the above, the following matters
94.27 	affecting the unit or the unit owner's obligations with respect
94.28 	to the unit are deemed material...............................
94.29 	................................................................
94.30 	I hereby certify that the foregoing information and
94.31 	statements are true and correct as of .............
94.32 	                                        (Date)
94.33 	                                    By:  .......................
94.34 	                                    Title: .....................
94.35 	                                    (Association representative)
94.36 	                                    Address:....................
95.1 	                                    Phone Number:...............
95.2 	RECEIPT
95.3 	In addition to the foregoing information furnished by the
95.4 	association, the unit owner is obligated to furnish to the
95.5 	purchaser before execution of any purchase agreement for a unit
95.6 	or otherwise before conveyance, copies of the following
95.7 	documents relating to the association or to the master
95.8 	association (as applicable):  the declaration (other than any
95.9 	common interest community plat), articles of incorporation,
95.10 	bylaws, rules and regulations (if any), and any amendments to
95.11 	these documents.  Receipt of the foregoing documents, and the
95.12 	resale disclosure certificate, is acknowledged by the
95.13 	undersigned buyer(s).
95.14 	Dated:  ............        .........................
95.15 	(Buyer)
95.16 	.........................
95.17 	(Buyer)
95.18 	(c) If the association is subject to a master association
95.19 	to which has been delegated the association's powers under
95.20 	section 515B.3-102(a)(2), then the financial information
95.21 	required to be disclosed under subsection (b) may be disclosed
95.22 	on a consolidated basis.
95.23 	(d) The association, within ten days after a request by a
95.24 	unit owner, or the unit owner's authorized representative, shall
95.25 	furnish the certificate required in subsection (a).  The
95.26 	association may charge a reasonable fee for furnishing the
95.27 	certificate and any association documents related thereto.  A
95.28 	unit owner providing a certificate pursuant to subsection (a) is
95.29 	not liable to the purchaser for any erroneous information
95.30 	provided by the association and included in the certificate.
95.31 	(e) A purchaser is not liable for any unpaid common expense
95.32 	assessments, including special assessments, if any, not set
95.33 	forth in the certificate required in subsection (a).  A
95.34 	purchaser is not liable for the amount by which the annual or
95.35 	special assessments exceed the amount of annual or special
95.36 	assessments stated in the certificate for assessments payable in
96.1 	the year in which the certificate was given, except to the
96.2 	extent of any increases subsequently approved in accordance with
96.3 	the declaration or bylaws.  A unit owner is not liable to a
96.4 	purchaser for the failure of the association to provide the
96.5 	certificate, or a delay by the association in providing the
96.6 	certificate in a timely manner.

96.7 	Sec. 38. Minnesota Statutes 2004, section 515B.4-108, is
96.8 	amended to read:
96.9 	515B.4-108 PURCHASER'S RIGHT TO CANCEL RESALE.
96.10 	(a) Unless a purchaser is given the information required to
96.11 	be delivered by section 515B.4-107, by a delivery method
96.12 	described in that section, more than five ten days prior to the
96.13 	execution of the purchase agreement for the unit the purchaser
96.14 	may, prior to the conveyance, cancel the purchase agreement
96.15 	within five ten days after receiving the information. Except as
96.16 	expressly provided in this chapter, the five-day rescission
96.17 	period cannot be waived.The ten-day rescission period may be
96.18 	modified or waived, in writing, by agreement of the purchaser of
96.19 	a unit only after the purchaser has received and had an
96.20 	opportunity to review the information required to be delivered
96.21 	by section 515B.4-107.  The person required to deliver the
96.22 	information required to be delivered by section 515B.4-107 may
96.23 	not condition the sale of the unit on the purchaser agreeing to
96.24 	modify or waive the purchaser's ten-day right of rescission, may
96.25 	not contractually obligate the purchaser to modify or waive the
96.26 	purchaser's ten-day right of rescission, and may not include a
96.27 	modification or waiver of the ten-day right of rescission in any
96.28 	purchase agreement for the unit.  To be effective, a
96.29 	modification or waiver of a purchaser's ten-day right of
96.30 	rescission must be evidenced by an instrument separate from the
96.31 	purchase agreement signed by the purchaser more than three days
96.32 	after the purchaser signs the purchase agreement.
96.33 	(b) A purchaser who elects to cancel a purchase agreement
96.34 	pursuant to subsection (a), may do so by hand delivering notice
96.35 	thereof or mailing notice by postage prepaid United States mail
96.36 	to the seller or the agent.  Cancellation is without penalty and
97.1 	all payments made by the purchaser shall be refunded promptly.

97.2 	Sec. 39. Minnesota Statutes 2004, section 515B.4-109, is
97.3 	amended to read:
97.4 	515B.4-109 ESCROW DEPOSITS.
97.5 	All earnest money paid or deposits made in connection with
97.6 	the purchase or reservation of units from or with a declarant
97.7 	shall be deposited in an escrow account controlled jointly by
97.8 	the declarant and the purchaser, or controlled by a licensed
97.9 	title insurance company or agent thereof, an attorney
97.10 	representing either the declarant or the purchaser, a licensed
97.11 	real estate broker or ,an independent bonded escrow company, or
97.12 	a governmental agency or instrumentality.  The escrow account
97.13 	shall be in an institution whose deposits are insured by a
97.14 	governmental agency or instrumentality.  The money or deposits
97.15 	shall be held in the escrow account until (i) delivered to the
97.16 	declarant at closing; (ii) delivered to the declarant because of
97.17 	the purchaser's default under a reservation agreement or a
97.18 	contract to purchase the unit; (iii) delivered to the purchaser
97.19 	pursuant to the provisions of section 515B.4-106 or the
97.20 	provisions of a reservation agreement or a contract to purchase;
97.21 	or (iv) delivered for payment of construction costs pursuant to
97.22 	a written agreement between the declarant and the purchaser.

97.23 	Sec. 40. Minnesota Statutes 2004, section 515B.4-111, is
97.24 	amended to read:
97.25 	515B.4-111 CONVERSION PROPERTY.
97.26 	(a) A unit owner of a unit occupied for residential use in
97.27 	a common interest community containing conversion property shall
97.28 	not, for a period of one year following the recording of the
97.29 	declaration creating the common interest community, require any
97.30 	occupant of the unit to vacate the unit unless the unit owner
97.31 	gives notice to the occupant in the manner described in this
97.32 	section.  The notice shall be given no later than 120 days
97.33 	before the occupant is required to vacate the unit.  The notice
97.34 	shall be sufficient as to all occupants of a unit if it is hand
97.35 	delivered or mailed to the unit to be vacated, addressed to the
97.36 	occupants thereof.  If the holder of the lessee's interest in
98.1 	the unit has given the unit owner an address different than that
98.2 	of the unit, then the notice shall also be given to the holder
98.3 	of the lessee's interest at the designated address.  The notice
98.4 	shall satisfy comply with the following requirements:
98.5 	(1) The notice shall set forth generally the rights
98.6 	conferred by this section.
98.7 	(2) The notice shall have attached to the notice intended
98.8 	for the holder of the lessee's interest a form of purchase
98.9 	agreement setting forth the terms of sale contemplated by
98.10 	subsection (d) and a statement of any significant restrictions
98.11 	on the use and occupancy of the unit to be imposed by the
98.12 	declarant.
98.13 	(3) The notice shall state that the occupants of the
98.14 	residential unit may demand to be given 60 additional days
98.15 	before being required to vacate, if any of them, or any person
98.16 	residing with them, is (i) 62 years of age or older, (ii) a
98.17 	person with a disability as defined in section 268A.01, or (iii)
98.18 	a minor child on the date the notice is given.  This demand must
98.19 	be in writing, contain reasonable proof of qualification, and be
98.20 	given to the declarant within 30 days after the notice of
98.21 	conversion is delivered or mailed.
98.22 	(4) The notice shall be contained in an envelope upon which
98.23 	the following shall be boldly printed:  "Notice of Conversion."
98.24 	(b) Notwithstanding subsection (a), an occupant may be
98.25 	required to vacate a unit upon less than 120 days' notice by
98.26 	reason of nonpayment of rent, utilities or other monetary
98.27 	obligations, violations of law, waste, or conduct that disturbs
98.28 	other occupants' peaceful enjoyment of the premises.  The terms
98.29 	of the tenancy may not be altered during the notice period,
98.30 	except that the holder of the lessee's interest or other party
98.31 	in possession may vacate and terminate the tenancy upon one
98.32 	month's written notice to the declarant.  Nothing in this
98.33 	section prevents the unit owner and any occupant from agreeing
98.34 	to a right of occupancy on a month-to-month basis beyond the
98.35 	120-day notice period, or to an earlier termination of the right
98.36 	of occupancy.
99.1 	(c) No repair work or remodeling may be commenced or
99.2 	undertaken in the occupied units or common areas of the building
99.3 	during the notice period, unless reasonable precautions are
99.4 	taken to ensure the safety and security of the occupants.
99.5 	(d) For 60 days after delivery or mailing of the notice
99.6 	described in subsection (a), the holder of the lessee's interest
99.7 	in the unit on the date the notice is mailed or delivered shall
99.8 	have an option to purchase that unit on the terms set forth in
99.9 	the purchase agreement attached to the notice.  The purchase
99.10 	agreement shall contain no terms or provisions which violate any
99.11 	state or federal law relating to discrimination in housing.  If
99.12 	the holder of the lessee's interest fails to purchase the unit
99.13 	during that 60-day period, the unit owner may not offer to
99.14 	dispose of an interest in that unit during the following 180
99.15 	days at a price or on terms more favorable to the offeree than
99.16 	the price or terms offered to the holder.  This subsection does
99.17 	not apply to any unit in a conversion building if that unit will
99.18 	be restricted exclusively to nonresidential use or if the
99.19 	boundaries of the converted unit do not substantially conform to
99.20 	the boundaries of the residential unit before conversion.
99.21 	(e) If a unit owner, in violation of subsection (b),
99.22 	conveys a unit to a purchaser for value who has no knowledge of
99.23 	the violation, the recording of the deed conveying the unit or,
99.24 	in a cooperative, the conveyance of the right to possession of
99.25 	the unit, extinguishes any right a holder of a lessee's interest
99.26 	who is not in possession of the unit may have under subsection
99.27 	(d) to purchase that unit, but the conveyance does not affect
99.28 	the right of the holder to recover damages from the unit owner
99.29 	for a violation of subsection (d).
99.30 	(f) If a notice of conversion specifies a date by which a
99.31 	unit or proposed unit must be vacated or otherwise complies with
99.32 	the provisions of chapter 504B, the notice also constitutes a
99.33 	notice to vacate specified by that statute.
99.34 	(g) Nothing in this section permits a unit owner to
99.35 	terminate a lease in violation of its terms.
99.36 	(h) Failure to give notice as required by this section is a
100.1 	defense to an action for possession until a notice complying
100.2 	with this section is given and the applicable notice period
100.3 	terminates.

100.4 	Sec. 41. Minnesota Statutes 2004, section 515B.4-115, is
100.5 	amended to read:
100.6 	515B.4-115 STATUTE OF LIMITATIONS FOR WARRANTIES.
100.7 	(a) A judicial proceeding for breach of an obligation
100.8 	arising under section 515B.4-101(e) or 515B.4-106(d), shall be
100.9 	commenced within six months after the conveyance of the unit or
100.10 	other parcel of real estate.
100.11 	(b) A judicial proceeding for breach of an obligation
100.12 	arising under section 515B.4-112 or 515B.4-113 shall be
100.13 	commenced within six years after the cause of action accrues,
100.14 	but the parties may agree to reduce the period of limitation to
100.15 	not less than two years. An agreement reducing the period of
100.16 	limitation shall be binding on the purchaser's successor assigns.
100.17 	With respect to a unit that may be occupied for residential use,
100.18 	an agreement to reduce the period of limitation must be
100.19 	evidenced by an instrument separate from the purchase agreement
100.20 	signed by the purchaser.
100.21 	(c) Subject to subsection (d), a cause of action under
100.22 	section 515B.4-112 or 515B.4-113, regardless of the purchasers
100.23 	lack of knowledge of the breach, accrues:
100.24 	(1) as to a unit, at the earlier of the time of conveyance
100.25 	of the unit by the declarant to a bona fide purchaser of the
100.26 	unit other than an affiliate of a declarant, or the time the
100.27 	purchaser enters into possession of the unit; and
100.28 	(2) as to each common element, the latest of (i) the time
100.29 	the common element is completed, (ii) the time the first unit in
100.30 	the common interest community is conveyed to a bona fide
100.31 	purchaser, or if the common element is located on property that
100.32 	is additional real estate at the time the first unit therein is
100.33 	conveyed to a bona fide purchaser, or (iii) the termination of
100.34 	the period of declarant control.
100.35 	(d) If a warranty explicitly extends to future performance
100.36 	or duration of any improvement or component of the common
101.1 	interest community, the cause of action accrues at the time the
101.2 	breach is discovered or at the end of the period for which the
101.3 	warranty explicitly extends, whichever is earlier.