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Key: (1) language to be deleted (2) new language

                            CHAPTER 121-H.F.No. 369 
                  An act relating to real property; amending the 
                  Minnesota Common Interest Ownership Act; amending 
                  Minnesota Statutes 2004, sections 515B.1-102; 
                  515B.1-103; 515B.1-106; 515B.1-107; 515B.1-116; 
                  515B.2-101; 515B.2-102; 515B.2-104; 515B.2-105; 
                  515B.2-106; 515B.2-108; 515B.2-110; 515B.2-111; 
                  515B.2-112; 515B.2-113; 515B.2-118; 515B.2-119; 
                  515B.2-121; 515B.2-123; 515B.2-124; 515B.3-101; 
                  515B.3-102; 515B.3-103; 515B.3-105; 515B.3-106; 
                  515B.3-110; 515B.3-112; 515B.3-113; 515B.3-114; 
                  515B.3-115; 515B.3-116; 515B.3-117; 515B.3-120; 
                  515B.4-101; 515B.4-102; 515B.4-105; 515B.4-106; 
                  515B.4-107; 515B.4-108; 515B.4-109; 515B.4-111; 
                  515B.4-115. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2004, section 515B.1-102, is 
        amended to read: 
           515B.1-102 [APPLICABILITY.] 
           (a) Except as provided in this section, this chapter, and 
        not chapters 515 and 515A, applies to all common interest 
        communities created within this state on and after June 1, 1994. 
           (b) The applicability of this chapter to common interest 
        communities created prior to June 1, 1994, shall be as follows:  
           (1) This chapter shall apply to condominiums created under 
        chapter 515A with respect to events and circumstances occurring 
        on and after June 1, 1994; provided (i) that this chapter shall 
        not invalidate the declarations, bylaws or condominium plats of 
        those condominiums, and (ii) that chapter 515A, and not this 
        chapter, shall govern all rights and obligations of a declarant 
        of a condominium created under chapter 515A, and the rights and 
        claims of unit owners against that declarant. 
           (2) The following sections in this chapter apply to 
        condominiums created under chapter 515:  515B.1-104 (Variation 
        by Agreement); 515B.1-105 (Separate Titles and Taxation); 
        515B.1-106 (Applicability of Local Ordinances, Regulations, and 
        Building Codes); 515B.1-107 (Eminent Domain); 515B.1-108 
        (Supplemental General Principles of Law Applicable); 515B.1-109 
        (Construction Against Implicit Repeal); 515B.1-112 
        (Unconscionable Agreement or Term of Contract); 515B.1-113 
        (Obligation of Good Faith); 515B.1-114 (Remedies to be Liberally 
        Administered); 515B.1-115 (Notice); 515B.1-116 (Recording); 
        515B.2-103 (Construction and Validity of Declaration and 
        Bylaws); 515B.2-104 (Description of Units); 515B.2-108(d) 
        (Allocation of Interests); 515B.2-109(c) (Common Elements and 
        Limited Common Elements); 515B.2-112 (Subdivision or Conversion 
        of Units); 515B.2-113 (Alteration of Units); 515B.2-114 
        (Relocation of Boundaries Between Adjoining Units); 515B.2-115 
        (Minor Variations in Boundaries); 515B.2-118 (Amendment of 
        Declaration); 515B.2-119 (Termination of Common Interest 
        Community); 515B.3-102 (Powers of Unit Owners' Association); 
        515B.3-103(a), (b), and (g) (Board; Directors and Officers; 
        Period of Declarant Control); 515B.3-107 (Upkeep of Common 
        Interest Community); 515B.3-108 (Meetings); 515B.3-109 
        (Quorums); 515B.3-110 (Voting; Proxies); 515B.3-111 (Tort and 
        Contract Liability); 515B.3-112 (Conveyance or Encumbrance of 
        Common Elements); 515B.3-113 (Insurance); 515B.3-114 (Reserves; 
        Surplus Funds); 515B.3-115 (c), (e), (f), (g), (h), and (i) 
        (Assessments for Common Expenses); 515B.3-116 (Lien for 
        Assessments); 515B.3-117 (Other Liens); 515B.3-118 (Association 
        Records); 515B.3-119 (Association as Trustee); 515B.3-121 
        (Accounting Controls); 515B.4-107 (Resale of Units); 515B.4-108 
        (Purchaser's Right to Cancel Resale); and 515B.4-116 (Rights of 
        Action; Attorney's Fees).  Section 515B.1-103 (Definitions) 
        shall apply to the extent necessary in construing any of the 
        sections referenced in this section.  Sections 515B.1-105, 
        515B.1-106, 515B.1-107, 515B.1-116, 515B.2-103, 515B.2-104, 
        515B.2-118, 515B.3-102, 515B.3-110, 515B.3-111, 515B.3-113, 
        515B.3-116, 515B.3-117, 515B.3-118, 515B.3-121, 515B.4-107, 
        515B.4-108, and 515B.4-116 apply only with respect to events and 
        circumstances occurring on and after June 1, 1994.  All other 
        sections referenced in this section apply only with respect to 
        events and circumstances occurring after July 31, 1999.  A 
        section referenced in this section does not invalidate the 
        declarations, bylaws or condominium plats of condominiums 
        created before August 1, 1999.  But all sections referenced in 
        this section prevail over the declarations, bylaws, CIC plats, 
        rules and regulations under them, of condominiums created before 
        August 1, 1999, except to the extent that this chapter defers to 
        the declarations, bylaws, CIC plats, or rules and regulations 
        issued under them. 
           (3) This chapter shall not apply to cooperatives and 
        planned communities created prior to June 1, 1994; except by 
        election pursuant to subsection (d), and except that sections 
        515B.1-116, subsections (a), (c), (d), (e), (f), and (h), 
        515B.4-107, and 515B.4-108, apply to all planned communities and 
        cooperatives regardless of when they are created, unless they 
        are exempt under subsection (e). 
           (c) This chapter shall not invalidate any amendment to the 
        declaration, bylaws or condominium plat of any condominium 
        created under chapter 515 or 515A if the amendment was recorded 
        before June 1, 1994.  Any amendment recorded on or after June 1, 
        1994, shall be adopted in conformity with the procedures and 
        requirements specified by those instruments and by this 
        chapter.  If the amendment grants to any person any rights, 
        powers or privileges permitted by this chapter, all correlative 
        obligations, liabilities and restrictions contained in this 
        chapter shall also apply to that person. 
           (d) Any condominium created under chapter 515, any planned 
        community or cooperative which would be exempt from this chapter 
        under subsection (e), or any planned community or cooperative 
        created prior to June 1, 1994, may elect to be subject to this 
        chapter, as follows: 
           (1) The election shall be accomplished by recording a 
        declaration or amended declaration, and a new or amended CIC 
        plat where required, and by approving bylaws or amended bylaws, 
        which conform to the requirements of this chapter, and which, in 
        the case of amendments, are adopted in conformity with the 
        procedures and requirements specified by the existing 
        declaration and bylaws of the common interest community, and by 
        any applicable statutes. 
           (2) In a condominium, the preexisting condominium plat 
        shall be the CIC plat and an amended CIC plat shall be required 
        only if the amended declaration or bylaws contain provisions 
        inconsistent with the preexisting condominium plat.  The 
        condominium's CIC number shall be the apartment ownership number 
        or condominium number originally assigned to it by the recording 
        officer.  In a cooperative in which the unit owners' interests 
        are characterized as real estate, a CIC plat shall be required.  
        In a planned community, the preexisting plat recorded pursuant 
        to chapter 505, 508, or 508A, or the part of the plat upon which 
        the common interest community is located, shall be the CIC plat. 
           (3) The amendment shall conform to the requirements of 
        comply with section 515B.2-118(d)(a)(3). 
           (4) Except as permitted by paragraph (3), no declarant, 
        affiliate of declarant, association, master association nor unit 
        owner may acquire, increase, waive, reduce or revoke any 
        previously existing warranty rights or causes of action that one 
        of said persons has against any other of said persons by reason 
        of exercising the right of election under this subsection. 
           (5) A common interest community which elects to be subject 
        to this chapter may, as a part of the election process, change 
        its form of ownership by complying with the requirements of 
        section 515B.2-123. 
           (e) Except as otherwise provided in this subsection, this 
        chapter shall not apply, except by election pursuant to 
        subsection (d), to the following: 
           (1) a planned community or cooperative which consists of 12 
        or fewer two units subject to the same declaration, which 
        utilizes a common interest community plat complying with section 
        515B.2-110(d)(1) and (2), which is not subject to any rights 
        to subdivide or convert units or to add additional real estate, 
        and which will is not be subject to a master association; 
           (2) a common interest community where the units consist 
        solely of separate parcels of real estate designed or utilized 
        for detached single family dwellings or agricultural purposes, 
        and where the association or a master association has no 
        obligation to maintain any building containing a dwelling or any 
        agricultural building; 
           (3) a cooperative where, at the time of creation of the 
        cooperative, the unit owners' interests in the dwellings as 
        described in the declaration consist solely of proprietary 
        leases having an unexpired term of fewer than 20 years, 
        including renewal options; 
           (4) planned communities utilizing a common interest 
        community plat complying with section 515B.2-110(d)(1) and (2) 
        and cooperatives, which are limited by the declaration to 
        nonresidential use; or 
           (5) real estate subject only to an instrument or 
        instruments filed primarily for the purpose of creating or 
        modifying rights with respect to access, utilities, parking, 
        ditches, drainage, or irrigation. 
           (f) Section 515B.1-106 shall apply to all common interest 
        communities. 
           Sec. 2.  Minnesota Statutes 2004, section 515B.1-103, is 
        amended to read: 
           515B.1-103 [DEFINITIONS.] 
           In the declaration and bylaws, unless specifically provided 
        otherwise or the context otherwise requires, and in this chapter:
           (1) "Additional real estate" means real estate that may be 
        added to a flexible common interest community. 
           (2) "Affiliate of a declarant" means any person who 
        controls, is controlled by, or is under common control with a 
        declarant.  
           (A) A person "controls" a declarant if the person (i) is a 
        general partner, officer, director, or employer of the 
        declarant, (ii) directly or indirectly or acting in concert with 
        one or more other persons, or through one or more subsidiaries, 
        owns, controls, holds with power to vote, or holds proxies 
        representing, more than 20 percent of the voting interest in the 
        declarant, (iii) controls in any manner the election of a 
        majority of the directors of the declarant, or (iv) has 
        contributed more than 20 percent of the capital of the declarant.
           (B) A person "is controlled by" a declarant if the 
        declarant (i) is a general partner, officer, director, or 
        employer of the person, (ii) directly or indirectly or acting in 
        concert with one or more other persons, or through one or more 
        subsidiaries, owns, controls, holds with power to vote, or holds 
        proxies representing, more than 20 percent of the voting 
        interest in the person, (iii) controls in any manner the 
        election of a majority of the directors of the person, or (iv) 
        has contributed more than 20 percent of the capital of the 
        person.  
           (C) Control does not exist if the powers described in this 
        subsection are held solely as a security interest and have not 
        been exercised. 
           (3) "Allocated interests" means the following interests 
        allocated to each unit:  (i) in a condominium, the undivided 
        interest in the common elements, the common expense liability, 
        and votes in the association; (ii) in a cooperative, the common 
        expense liability and the ownership interest and votes in the 
        association; and (iii) in a planned community, the common 
        expense liability and votes in the association. 
           (4) "Association" means the unit owners' association 
        organized under section 515B.3-101. 
           (5) "Board" means the body, regardless of name, designated 
        in the articles of incorporation, bylaws or declaration to act 
        on behalf of the association, or on behalf of a master 
        association when so identified. 
           (6) "CIC plat" means a common interest community plat 
        described in section 515B.2-110. 
           (7) "Common elements" means all portions of the common 
        interest community other than the units. 
           (8) "Common expenses" means expenditures made or 
        liabilities incurred by or on behalf of the association, or 
        master association when so identified, together with any 
        allocations to reserves. 
           (9) "Common expense liability" means the liability for 
        common expenses allocated to each unit pursuant to section 
        515B.2-108. 
           (10) "Common interest community" or "CIC" means contiguous 
        or noncontiguous real estate within Minnesota that is subject to 
        an instrument which obligates persons owning a separately 
        described parcel of the real estate, or occupying a part of the 
        real estate pursuant to a proprietary lease, by reason of their 
        ownership or occupancy, to pay for (i) real estate taxes levied 
        against; (ii) insurance premiums payable with respect to; (iii) 
        maintenance of; or (iv) construction, maintenance, repair or 
        replacement of improvements located on, one or more parcels or 
        parts of the real estate other than the parcel or part that the 
        person owns or occupies.  Real estate which satisfies the 
        definition of a common interest community is a common interest 
        community whether or not it is subject to this chapter.  Real 
        estate subject to a master association, regardless of when the 
        master association was formed, shall not collectively constitute 
        a separate common interest community unless so stated in the 
        master declaration recorded against the real estate pursuant to 
        section 515B.2-121, subsection (f)(1). 
           (11) "Condominium" means a common interest community in 
        which (i) portions of the real estate are designated as units, 
        (ii) the remainder of the real estate is designated for common 
        ownership solely by the owners of the units, and (iii) undivided 
        interests in the common elements are vested in the unit owners. 
           (12) "Conversion property" means real estate on which is 
        located a building that at any time within two years before 
        creation of the common interest community was occupied as a 
        residence for residential use wholly or partially by persons 
        other than purchasers and persons who occupy with the consent of 
        purchasers. 
           (13) "Cooperative" means a common interest community in 
        which the real estate is owned by an association, each of whose 
        members is entitled by virtue of the member's ownership interest 
        in the association to a proprietary lease. 
           (14) "Dealer" means a person in the business of selling 
        units for the person's own account. 
           (15) "Declarant" means: 
           (i) if the common interest community has been created, (A) 
        any person who has executed a declaration, or an amendment to a 
        declaration to add additional real estate, except secured 
        parties, persons whose interests in the real estate will not be 
        transferred to unit owners, or, in the case of a leasehold 
        common interest community, a lessor who possesses no special 
        declarant rights and who is not an affiliate of a declarant who 
        possesses special declarant rights, or (B) any person who 
        reserves, or succeeds under section 515B.3-104 to any special 
        declarant rights; or 
           (ii) any person or persons acting in concert who have 
        offered prior to creation of the common interest community to 
        transfer their interest in a unit to be created and not 
        previously transferred. 
           (16) "Declaration" means any instrument, however 
        denominated, including any amendment to the instrument, that 
        creates a common interest community. 
           (17) "Dispose" or "disposition" means a voluntary transfer 
        to a purchaser of any legal or equitable interest in the common 
        interest community, but the term does not include the transfer 
        or release of a security interest. 
           (18) "Flexible common interest community" means a common 
        interest community to which additional real estate may be added. 
           (19) "Leasehold common interest community" means a common 
        interest community in which all or a portion of the real estate 
        is subject to a lease the expiration or termination of which 
        will terminate the common interest community or reduce its size. 
           (20) "Limited common element" means a portion of the common 
        elements allocated by the declaration or by operation of section 
        515B.2-102(d) or (f) for the exclusive use of one or more but 
        fewer than all of the units. 
           (21) "Master association" means an entity created on or 
        after June 1, 1994, that directly or indirectly exercises any of 
        the powers set forth in section 515B.3-102 on behalf of one or 
        more members described in section 515B.2-121(b), (i), (ii) or 
        (iii), whether or not it also exercises those powers on behalf 
        of one or more property owners owner's associations described in 
        section 515B.2-121(b)(iv).  A person (i) hired by an association 
        to perform maintenance, repair, accounting, bookkeeping or 
        management services, or (ii) granted authority under an 
        instrument recorded primarily for the purpose of creating rights 
        or obligations with respect to utilities, access, drainage, or 
        recreational amenities, is not, solely by reason of that 
        relationship, a master association. 
           (22) "Master declaration" means a written instrument, 
        however named, (i) recorded on or after June 1, 1994, against 
        property subject to powers exercised by a master association and 
        (ii) satisfying the requirements of complying with section 
        515B.2-121, subsection (f)(1). 
           (23) "Period of declarant control" means the time period 
        provided for in section 515B.3-103(c) during which the declarant 
        may appoint and remove officers and directors of the association.
           (24) "Person" means an individual, corporation, limited 
        liability company, partnership, trustee under a trust, personal 
        representative, guardian, conservator, government, governmental 
        subdivision or agency, or other legal or commercial entity 
        capable of holding title to real estate. 
           (25) "Planned community" means a common interest community 
        that is not a condominium or a cooperative.  A condominium or 
        cooperative may be a part of a planned community. 
           (26) "Proprietary lease" means an agreement with a 
        cooperative association whereby a member of the association is 
        entitled to exclusive possession of a unit in the cooperative. 
           (27) "Purchaser" means a person, other than a declarant, 
        who by means of a voluntary transfer acquires a legal or 
        equitable interest in a unit other than (i) a leasehold interest 
        of less than 20 years, including renewal options, or (ii) a 
        security interest. 
           (28) "Real estate" means any fee simple, leasehold or other 
        estate or interest in, over, or under land, including 
        structures, fixtures, and other improvements and interests that 
        by custom, usage, or law pass with a conveyance of land though 
        not described in the contract of sale or instrument of 
        conveyance.  "Real estate" may include spaces with or without 
        upper or lower boundaries, or spaces without physical boundaries.
           (29) "Residential use" means use as a dwelling, whether 
        primary, secondary or seasonal, but not transient use such as 
        hotels or motels. 
           (30) "Secured party" means the person owning a security 
        interest as defined in paragraph (31). 
           (31) "Security interest" means a perfected interest in real 
        estate or personal property, created by contract or conveyance, 
        which secures payment or performance of an obligation.  The term 
        includes a mortgagee's interest in a mortgage, a vendor's 
        interest in a contract for deed, a lessor's interest in a lease 
        intended as security, a holder's interest in a sheriff's 
        certificate of sale during the period of redemption, an 
        assignee's interest in an assignment of leases or rents intended 
        as security, a lender's interest in a cooperative share loan, a 
        pledgee's interest in the pledge of an ownership interest, or 
        any other interest intended as security for an obligation under 
        a written agreement. 
           (32) "Special declarant rights" means rights reserved in 
        the declaration for the benefit of a declarant to: 
           (i) complete improvements indicated on the CIC plat, 
        planned by the declarant consistent with the disclosure 
        statement or authorized by the municipality in which the CIC is 
        located; 
           (ii) add additional real estate to a common interest 
        community; 
           (iii) subdivide or combine units, or convert units into 
        common elements, limited common elements and/or units; 
           (iv) maintain sales offices, management offices, signs 
        advertising the common interest community, and models; 
           (v) use easements through the common elements for the 
        purpose of making improvements within the common interest 
        community or any additional real estate; 
           (vi) create a master association and provide for the 
        exercise of authority by the master association over the common 
        interest community or its unit owners; 
           (vii) merge or consolidate a common interest community with 
        another common interest community of the same form of ownership; 
        or 
           (viii) appoint or remove any officer or director of the 
        association, or the master association where applicable, during 
        any period of declarant control. 
           (33) "Time share" means a right to occupy a unit or any of 
        several units during three or more separate time periods over a 
        period of at least three years, including renewal options, 
        whether or not coupled with an estate or interest in a common 
        interest community or a specified portion thereof. 
           (34) "Unit" means a physical portion of a common interest 
        community the boundaries of which are described in the common 
        interest community's declaration and which is intended for 
        separate ownership or separate occupancy pursuant to a 
        proprietary lease. 
           (35) "Unit identifier" means English letters or Arabic 
        numerals, or a combination thereof, which identify only one unit 
        in a common interest community and which meet the requirements 
        of section 515B.2-104. 
           (36) "Unit owner" means a declarant or other person who 
        owns a unit, a lessee under a proprietary lease, or a lessee of 
        a unit in a leasehold common interest community whose lease 
        expires simultaneously with any lease the expiration or 
        termination of which will remove the unit from the common 
        interest community, but does not include a secured party.  In a 
        common interest community, the declarant is the unit owner of a 
        unit until that unit has been conveyed to another person. 
           Sec. 3.  Minnesota Statutes 2004, section 515B.1-106, is 
        amended to read: 
           515B.1-106 [APPLICABILITY OF LOCAL REQUIREMENTS.] 
           (a) Except as provided in subsections (b) and (c), a 
        zoning, subdivision, building code, or other real estate use 
        law, ordinance, charter provision, or regulation may not 
        directly or indirectly prohibit the common interest community 
        form of ownership or impose any requirement upon a common 
        interest community, upon the creation or disposition of a common 
        interest community or upon any part of the common interest 
        community conversion process which it would not impose upon a 
        physically similar development under a different form of 
        ownership.  Otherwise, no provision of this chapter invalidates 
        or modifies any provision of any zoning, subdivision, building 
        code, or other real estate use law, ordinance, charter 
        provision, or regulation. 
           (b) Subsection (a) shall not apply to any ordinance, rule, 
        regulation, charter provision or contract provision relating to 
        the financing of housing construction, rehabilitation, or 
        purchases provided by or through a housing finance program 
        established and operated pursuant to state or federal law by a 
        state or local agency or local unit of government. 
           (c) A statutory or home rule charter city, pursuant to an 
        ordinance or charter provision establishing standards to be 
        applied uniformly within its jurisdiction, may prohibit or 
        impose reasonable conditions upon the conversion of 
        buildings occupied wholly or partially for residential use to 
        the common interest community form of ownership only if there 
        exists within the city a significant shortage of suitable rental 
        dwellings available to low and moderate income individuals or 
        families or to establish or maintain the city's eligibility for 
        any federal or state program providing direct or indirect 
        financial assistance for housing to the city.  Prior to the 
        adoption of an ordinance pursuant to the authority granted in 
        this subsection, the city shall conduct a public hearing.  Any 
        ordinance or charter provision adopted pursuant to this 
        subsection shall not apply to any existing or proposed 
        conversion common interest community (i) for which a bona fide 
        loan commitment for a consideration has been issued by a lender 
        and is in effect on the date of adoption of the ordinance or 
        charter provision, or (ii) for which a notice of conversion or 
        intent to convert required by section 515B.4-111, containing a 
        termination of tenancy, has been given to at least 75 percent of 
        the tenants and subtenants in possession prior to the date of 
        adoption of the ordinance or charter provision. 
           (d) For purposes of providing marketable title, a statement 
        in the declaration that the common interest community is not 
        subject to an ordinance or that any conditions required under an 
        ordinance have been complied with shall be prima facie evidence 
        that the common interest community was not created in violation 
        of the ordinance. 
           (e) A violation of an ordinance or charter provision 
        adopted pursuant to the provisions of subsection (b) or (c) 
        shall not affect the validity of a common interest community.  
        This subsection shall not be construed to in any way limit the 
        power of a city to enforce the provisions of an ordinance or 
        charter provision adopted pursuant to subsection (b) or (c). 
           (f) Any ordinance or charter provision enacted hereunder 
        shall not be effective for a period exceeding 18 months. 
           Sec. 4.  Minnesota Statutes 2004, section 515B.1-107, is 
        amended to read: 
           515B.1-107 [EMINENT DOMAIN.] 
           (a) If a unit is acquired by eminent domain, or if part of 
        a unit is acquired by eminent domain leaving the unit owner with 
        a remnant which may not practically or lawfully be used for any 
        material purpose permitted by the declaration, the award shall 
        compensate the unit owner and secured party in the unit as their 
        interests may appear, whether or not any common element interest 
        is acquired.  Upon acquisition, unless the order or final 
        certificate otherwise provides, that unit's allocated interests 
        are automatically reallocated among the remaining units in 
        proportion to their respective allocated interests prior to the 
        taking, and the association shall promptly prepare, execute, and 
        record an amendment to the declaration reflecting the 
        allocations.  Any remnant of a unit remaining after part of a 
        unit is taken under this subsection is thereafter a common 
        element. 
           (b) Except as provided in subsection (a), if part of a unit 
        is acquired by eminent domain, the award shall compensate the 
        unit owner and secured party for the reduction in value of the 
        unit and its interest in the common elements, whether or not any 
        common elements are acquired.  Upon acquisition, unless the 
        order or final certificate otherwise provides, (i) that unit's 
        allocated interests are reduced in proportion to the reduction 
        in the size of the unit, or on any other basis specified in the 
        declaration and (ii) the portion of the allocated interests 
        divested from the partially acquired unit are automatically 
        reallocated to that unit and to the remaining units in 
        proportion to the respective allocated interests of those units 
        before the taking, with the partially acquired unit 
        participating in the reallocation on the basis of its reduced 
        allocated interests. 
           (c) If part of the common elements is acquired by eminent 
        domain, the portion of the award attributable to the common 
        elements taken shall be paid to the association.  In an eminent 
        domain proceeding which seeks to acquire a part of the common 
        elements, jurisdiction may be acquired by service of process 
        upon the association.  Unless the declaration provides 
        otherwise, any portion of the award attributable to the 
        acquisition of a limited common element shall be equally divided 
        among the owners of the units to which that limited common 
        element was allocated at the time of acquisition and their 
        secured parties, as their interests may appear or as provided by 
        the declaration. 
           (d) In any eminent domain proceeding the units shall be 
        treated as separate parcels of real estate for valuation 
        purposes, regardless of the number of units subject to the 
        proceeding. 
           (e) Any distribution to a unit owner from the proceeds of 
        an eminent domain award shall be subject to any limitations 
        imposed by the declaration or bylaws. 
           (f) The court order or final certificate containing the 
        final awards shall be recorded in every county in which any 
        portion of the common interest community is located. 
           Sec. 5.  Minnesota Statutes 2004, section 515B.1-116, is 
        amended to read: 
           515B.1-116 [RECORDING.] 
           (a) A declaration, bylaws, any amendment to a declaration 
        or bylaws, and any other instrument affecting a common interest 
        community shall be entitled to be recorded.  In those counties 
        which have a tract index, the county recorder shall enter the 
        declaration in the tract index for each unit or other tract 
        affected.  The county recorder shall not enter the declaration 
        in the tract index for lands described as additional real 
        estate, unless such lands are added to the common interest 
        community pursuant to section 515B.2-111.  The registrar of 
        titles shall file the declaration in accordance with section 
        508.351 or 508A.351.  The registrar of titles shall not file the 
        declaration upon certificates of title for lands described as 
        additional real estate, unless such lands are added to the 
        common interest community pursuant to section 515B.2-111. 
           (b) The recording officer shall upon request promptly 
        assign a number (CIC number) to a common interest community to 
        be formed or to a common interest community resulting from the 
        merger of two or more common interest communities. 
           (c) Documents recorded pursuant to this chapter shall in 
        the case of registered land be filed, and references to the 
        recording of documents shall mean filed in the case of 
        registered land. 
           (d) Subject to any specific requirements of this chapter, 
        if a recorded document relating to a common interest 
        community or a master association purports to require a certain 
        vote or signatures approving any restatement or amendment of the 
        document by a certain number or percentage of unit owners or 
        secured parties, and if the amendment or restatement is to be 
        recorded pursuant to this chapter, an affidavit of the president 
        or secretary of the association stating that the required vote 
        or signatures have been obtained shall be attached to the 
        document to be recorded and shall constitute prima facie 
        evidence of the representations contained therein. 
           (e) If a common interest community is located on registered 
        land, the recording fee for any document affecting two or more 
        units shall be the then-current fee for registering the document 
        on the certificates of title for the first ten affected 
        certificates and one-third of the then-current fee for each 
        additional affected certificate.  This provision shall not apply 
        to recording fees for deeds of conveyance, with the exception of 
        deeds given pursuant to sections 515B.2-119 and 515B.3-112.  The 
        same fees shall apply to recording any document affecting two or 
        more units or other parcels of real estate subject to a master 
        declaration. 
           (f) Except as permitted under this subsection, a recording 
        officer shall not file or record a declaration creating a new 
        common interest community, unless the county treasurer has 
        certified that the property taxes payable in the current year 
        for the real estate included in the proposed common interest 
        community have been paid.  This certification is in addition to 
        the certification for delinquent taxes required by section 
        272.12.  In the case of preexisting common interest communities, 
        the recording officer shall accept, file, and record the 
        following instruments, without requiring a certification as to 
        the current or delinquent taxes on any of the units in the 
        common interest community:  (i) a declaration subjecting the 
        common interest community to this chapter; (ii) a declaration 
        changing the form of a common interest community pursuant to 
        section 515B.2-123; or (iii) an amendment to or restatement of 
        the declaration, bylaws, or CIC plat.  In order for an 
        instrument to be accepted and recorded under the preceding 
        sentence, the instrument must not create or change unit or 
        common area boundaries. 
           Sec. 6.  Minnesota Statutes 2004, section 515B.2-101, is 
        amended to read: 
           515B.2-101 [CREATION OF COMMON INTEREST COMMUNITIES.] 
           (a) On and after June 1, 1994, a common interest community 
        may be created only as follows: 
           (1) A condominium may be created only by recording a 
        declaration. 
           (2) A cooperative may be created only by recording a 
        declaration and by recording a conveyance of the real estate 
        subject to that declaration to the association. 
           (3) A planned community which includes common elements may 
        be created only by simultaneously recording a declaration and a 
        conveyance of the common elements subject to that declaration to 
        the association. 
           (4) A planned community without common elements may be 
        created only by recording a declaration. 
           (b) Except as otherwise expressly provided in this chapter, 
        the declaration shall be executed by all persons whose interests 
        in the real estate will be conveyed to unit owners or to the 
        association, except vendors under contracts for deed, and by 
        every lessor of a lease the expiration or termination of which 
        will terminate the common interest community.  The declaration 
        shall be recorded in every county in which any portion of the 
        common interest community is located.  Failure of any party not 
        required to execute a declaration, but having a recorded 
        interest in the common interest community, to join in the 
        declaration shall have no effect on the validity of the common 
        interest community; provided that the party is not bound by the 
        declaration until that party acknowledges the existence of the 
        common interest community in a recorded instrument. 
           (c) In a condominium, a planned community utilizing a CIC 
        plat complying with section 515B.2-110(c), or real estate a 
        cooperative where the unit boundaries are delineated by 
        a physical structure, a declaration, or an amendment to a 
        declaration adding units, shall not be recorded unless all the 
        structural components of the structures containing the units and 
        the mechanical systems serving more than one unit in all 
        buildings containing the units thereby created, but not the 
        units, are substantially completed, as evidenced by a recorded 
        certificate executed by a registered engineer or architect. 
           (d) A project which (i) meets the definition of a "common 
        interest community" in section 515B.1-103(10), (ii) is created 
        after May 31, 1994, and (iii) is not exempt under section 
        515B.1-102(e), is subject to this chapter even if this or other 
        sections of the chapter have not been complied with, and the 
        declarant and all unit owners are bound by all requirements and 
        obligations of this chapter. 
           (e) The association shall be incorporated pursuant to 
        section 515B.3-101 and the CIC plat shall be recorded as and if 
        required by section 515B.2-110. 
           Sec. 7.  Minnesota Statutes 2004, section 515B.2-102, is 
        amended to read: 
           515B.2-102 [UNIT BOUNDARIES.] 
           (a) The declaration shall describe the boundaries of the 
        units as provided in section 515B.2-105(5).  The boundaries need 
        not be delineated by a physical structure.  The unit may consist 
        of noncontiguous portions of the common interest community. 
           (b) In a condominium or, a cooperative, or a planned 
        community utilizing a CIC plat complying with section 
        515B.2-110(c), except as the declaration otherwise provides, if 
        the walls, floors, or ceilings of a unit are designated as its 
        boundaries, then the boundaries shall be the interior, 
        unfinished surfaces of the perimeter walls, floors and, 
        ceilings, doors, windows, and door and window frames of the unit.
        All paneling, tiles, wallpaper, paint, floor covering, and any 
        other finishing materials applied to the interior surfaces of 
        the perimeter walls, floors or ceilings, are a part of the unit, 
        and all other portions of the perimeter walls, floors, or 
        ceilings, including perimeter doors and, windows, and their 
        door and window frames, are a part of the common elements. 
           (c) In a planned community, except as the declaration 
        otherwise provides utilizing a CIC plat complying with section 
        515B.2-110(d)(1) and (2), except as the declaration otherwise 
        provides, the unit boundaries shall be the boundary lines as 
        designated on a plat recorded pursuant to chapter 505 or on a 
        registered land survey filed lot lines designated on a plat 
        recorded pursuant to chapter 508 or 508A 505. 
           (d) If any chute, flue, duct, wire, pipe, conduit, bearing 
        wall, bearing column, or any other fixture serving fewer than 
        all units lies partially within and partially outside of 
        the designated boundaries of a the unit or units served, any 
        portion thereof serving only that unit or units is a limited 
        common element allocated solely to that unit or units, and any 
        portion thereof serving more than one unit or any portion of the 
        common elements is a part of the common elements. 
           (e) Subject to subsection (d), all spaces, interior 
        partitions, and other fixtures and improvements within the 
        boundaries of a unit are a part of the unit. 
           (f) Improvements such as shutters, awnings, window boxes, 
        doorsteps, stoops, porches, balconies, decks, patios, perimeter 
        doors and windows, and their frames, constructed as part of the 
        original construction to serve a single unit, and authorized 
        replacements and modifications thereof, if located wholly or 
        partially outside the unit's boundaries, are limited common 
        elements allocated exclusively to that unit. 
           Sec. 8.  Minnesota Statutes 2004, section 515B.2-104, is 
        amended to read: 
           515B.2-104 [DESCRIPTION OF UNITS.] 
           (a) A description of a unit is legally sufficient if it 
        sets forth (i) the unit identifier of the unit, (ii) the number 
        assigned to the common interest community by the recording 
        officer, and (iii) the county in which the unit is located. 
           (b) If the CIC plat for a planned community complies with 
        chapter 505, 508, or 508A, then a description of a unit in the 
        planned community is legally sufficient if it is stated in terms 
        of a plat or registered land survey.  In planned communities 
        whose CIC plats comply with section 515B.2-110(c), and in all 
        condominiums and cooperatives created under this chapter, a unit 
        identifier shall contain no more than six characters, only one 
        of which may be a letter. 
           (c) A description which conforms to the requirements of 
        complies with this section shall be deemed to include all 
        rights, obligations, and interests appurtenant to the unit which 
        were created by the declaration or bylaws, by a master 
        declaration, or by this chapter, whether or not those rights, 
        obligations, or interests are expressly described. 
           (d) If the CIC plat for a planned community complies with 
        section 515B.2-110(c) a description of the common elements is 
        legally sufficient if it sets forth (i) the words "common 
        elements," (ii) the number assigned to the common interest 
        community by the recording officer, and (iii) the county in 
        which the common elements are located.  The common elements may 
        consist of separate parcels of real estate, in which case each 
        parcel shall be separately identified on the CIC plat and in any 
        recorded instrument referencing a separate parcel of the common 
        elements. 
           Sec. 9.  Minnesota Statutes 2004, section 515B.2-105, is 
        amended to read: 
           515B.2-105 [DECLARATION CONTENTS; ALL COMMON INTEREST 
        COMMUNITIES.] 
           (a) The declaration shall contain: 
           (1) the number of the common interest community, whether 
        the common interest community is a condominium, planned 
        community or cooperative, and the name of the common interest 
        community, which shall appear at the top of the first page of 
        the declaration in the following format: 
                       Common Interest Community No. ....
                      (Type of Common Interest Community)
           
                      (Name of Common Interest Community)
                                  DECLARATION 
           (2) a statement as to whether the common interest community 
        is or is not subject to a master association; 
           (3) the name of the association, a statement that the 
        association has been incorporated and a reference to the statute 
        under which it was incorporated; 
           (4) a legally sufficient description of the real estate 
        included in the common interest community, a statement 
        identifying any appurtenant easement necessary for access to a 
        public street or highway, and a general reference to any other 
        appurtenant easements; 
           (5) a description of the boundaries of each unit created by 
        the declaration and the unit's unit identifier; 
           (6) in a planned community containing common elements, a 
        legally sufficient description of the common elements; 
           (7) in a cooperative, a statement as to whether the unit 
        owners' interests in all units and their allocated interests are 
        real estate or personal property; 
           (8) an allocation to each unit of the allocated interests 
        in the manner described in section 515B.2-108; 
           (9) a statement of (i) the total number of units and (ii) 
        which units will be restricted to residential use and which 
        units will be restricted to nonresidential use; 
           (10) a statement of the maximum number of units which may 
        be created by the subdivision or conversion of units owned by 
        the declarant pursuant to section 515B.2-112; 
           (11) any material restrictions on use, occupancy, or 
        alienation of the units, or on the sale price of a unit or on 
        the amount that may be received by an owner on sale, 
        condemnation or casualty loss to the unit or to the common 
        interest community, or on termination of the common interest 
        community; provided, that these requirements shall not affect 
        the power of the association to adopt, amend or revoke rules and 
        regulations pursuant to section 515B.3-102; 
           (12) a statement as to whether time shares are permitted; 
        and 
           (13) a statement as to whether the common interest 
        community includes any shoreland, as defined in section 
        103F.205, and, if the common interest community includes 
        shoreland, a statement that the common interest community may be 
        subject to county, township, or municipal ordinances or rules 
        affecting the development and use of the shoreland area; and 
           (14) all matters required by sections 515B.1-103(32), 
        Special Declarant Rights; 515B.2-107, Leaseholds; 515B.2-109, 
        Common Elements and Limited Common Elements; 515B.2-110, Common 
        Interest Community Plat; 515B.3-115, Assessments for Common 
        Expenses; and 515B.2-121, Master Associations.  
           (b) The declaration may contain any other matters the 
        declarant considers appropriate. 
           Sec. 10.  Minnesota Statutes 2004, section 515B.2-106, is 
        amended to read: 
           515B.2-106 [DECLARATION OF FLEXIBLE COMMON INTEREST 
        COMMUNITIES.] 
           (a) The declaration for a flexible common interest 
        community shall include, in addition to the matters specified in 
        section 515B.2-105: 
           (1) a reservation of any rights to add additional real 
        estate; 
           (2) a statement of any time limit, not exceeding ten years 
        after the recording of the declaration, upon which any right 
        reserved under paragraph (1) will lapse, together with a 
        statement of any circumstances that will terminate the option 
        before the expiration of the time limit.  If no time limit is 
        set forth in the declaration, the time limit shall be ten years 
        after the recording of the declaration; provided, that the time 
        limit may be extended by an amendment to the declaration 
        approved in writing by the declarant, and by the vote or written 
        agreement of unit owners, other than the declarant or an 
        affiliate of the declarant, to whose units are allocated at 
        least 67 percent of the votes in the association; 
           (3) a statement of any limitations on any rights reserved 
        under paragraph (1), other than limitations created by or 
        imposed pursuant to law; 
           (4) a legally sufficient description of the additional real 
        estate; 
           (5) a statement as to whether portions of any additional 
        real estate may be added at different times; 
           (6) a statement of (i) the maximum number of units, based 
        upon the declarant's good faith estimate, that may be created 
        within any additional real estate, and (ii) how many of those 
        units will be restricted to residential use; 
           (7) a statement that any buildings and units erected upon 
        the additional real estate, when and if added, will be 
        compatible with the other buildings and units in the common 
        interest community in terms of architectural style, quality of 
        construction, principal materials employed in construction, and 
        size, or a statement of any differences with respect to the 
        buildings or units, or a statement that no assurances are made 
        in those regards; 
           (8) a statement that all restrictions in the declaration 
        affecting use, occupancy, and alienation of units will apply to 
        units created in the additional real estate, when and if added, 
        or a statement of any differences with respect to the additional 
        units; 
           (9) a statement as to whether any assurances made in the 
        declaration regarding additional real estate pursuant to 
        paragraphs (5) through (8) will apply if the real estate is not 
        added to the common interest community. 
           (b) A declarant need not have an interest in the additional 
        real estate in order to identify it as such in the declaration, 
        and the recording officer shall index the declaration as 
        provided in section 515B.1-116(a).  Identification of additional 
        real estate in the declaration does not encumber or otherwise 
        affect the title to the additional real estate. 
           Sec. 11.  Minnesota Statutes 2004, section 515B.2-108, is 
        amended to read: 
           515B.2-108 [ALLOCATION OF INTERESTS.] 
           (a) The declaration shall allocate to each unit: 
           (1) in a condominium, a fraction or percentage of undivided 
        interests in the common elements and in the common expenses of 
        the association and a portion of the votes in the association; 
           (2) in a cooperative, an ownership interest in the 
        association, a fraction or percentage of the common expenses of 
        the association and a portion of the votes in the association; 
        and 
           (3) in a planned community, a fraction or percentage of the 
        common expenses of the association and a portion of the votes in 
        the association. 
           (b) The declaration shall state the formulas used to 
        establish allocations of interests.  If the fractions or 
        percentages are all equal the declaration may so state in lieu 
        of stating the fractions or percentages.  If equality is 
        designated by The declaration as the formula for the allocation 
        of votes, need not allocate votes do not attach to units that 
        are auxiliary to other units, such as garage units or storage 
        units.  The allocations shall not discriminate in favor of units 
        owned by the declarant or an affiliate of the declarant, except 
        as provided in sections 515B.2-121 and 515B.3-115. 
           (c) If units may be added to the common interest community, 
        the declaration shall state the formulas to be used to 
        reallocate the allocated interests among all units included in 
        the common interest community after the addition shall be the 
        formulas stated in the declaration. 
           (d) The declaration may authorize special allocations:  (i) 
        of unit owner votes among certain units or classes of units on 
        particular matters specified in the declaration, or (ii) of 
        common expenses among certain units or classes of units on 
        particular matters specified in the declaration.  Special 
        allocations may only be used to address operational, physical or 
        administrative differences within the common interest 
        community.  A declarant may not utilize special allocations for 
        the purpose of evading any limitation or obligation imposed on 
        declarants by this chapter nor may units constitute a class 
        because they are owned by a declarant. 
           (e) The sum of each category of allocated interests 
        allocated at any time to all the units must equal one if stated 
        as a fraction or 100 percent if stated as a percentage.  In the 
        event of a discrepancy between an allocated interest and the 
        result derived from application of the pertinent formula, the 
        allocated interest prevails. 
           (f) In a condominium or planned community, the common 
        elements are not subject to partition, and any purported 
        conveyance, encumbrance, judicial sale, or other voluntary or 
        involuntary transfer of an undivided interest in the common 
        elements made without the unit to which that interest is 
        allocated is void.  The granting of easements, licenses or 
        leases pursuant to section 515B.3-102 shall not constitute a 
        partition. 
           (g) In a cooperative, any purported conveyance, 
        encumbrance, judicial sale, or other voluntary or involuntary 
        transfer of an ownership interest in the association made 
        without the possessory interest in the unit to which that 
        interest is related is void. 
           Sec. 12.  Minnesota Statutes 2004, section 515B.2-110, is 
        amended to read: 
           515B.2-110 [COMMON INTEREST COMMUNITY PLAT (CIC PLAT).] 
           (a) A CIC plat is required for condominiums and planned 
        communities, and cooperatives in which the unit owners' 
        interests are characterized as real estate.  The CIC plat is a 
        part of the declaration in condominiums, in planned communities 
        utilizing a CIC plat complying with subsection (c), and in 
        cooperatives in which the unit owners' interests are 
        characterized as real estate, but need not be physically 
        attached to the declaration. 
           (1) In a condominium, or a cooperative in which the unit 
        owners' interests are characterized as real estate, the CIC plat 
        shall comply with subsection (c). 
           (2) In a planned community, a CIC plat which does not 
        comply with subsection (c) shall consist of all or part of a 
        subdivision plat or plats complying with subsections (d)(1) and 
        (d)(2).  The CIC plat need not contain the number of the common 
        interest community and may be recorded at any time at or before 
        the time of recording of the declaration.; provided, that if the 
        CIC plat for the planned community complies with subsection (c), 
        the number of the common interest community shall be included 
        and the CIC plat shall be recorded at the time of recording of 
        the declaration.  
           (3) In a cooperative in which the unit owners' interests 
        are characterized as personal property, a CIC plat shall not be 
        required.  In lieu of a CIC plat, the declaration or any 
        amendment to it creating, converting, or subdividing units in a 
        personal property cooperative shall include an exhibit 
        containing a scale drawing of each building, identifying the 
        building, and showing the perimeter walls of each unit created 
        or changed by the declaration or any amendment to it, including 
        the unit's unit identifier, and its location within the building 
        if the building contains more than one unit. 
           (b) The CIC plat, or supplemental or amended CIC plat, for 
        condominiums, for planned communities using a plat complying 
        with subsection (c), and for cooperatives in which the unit 
        owners' interests are characterized as real estate, shall 
        contain certifications by a registered licensed professional 
        land surveyor and registered licensed professional architect, as 
        to the parts of the CIC plat prepared by each, that (i) the CIC 
        plat accurately depicts all information required by this 
        section, and (ii) the work was undertaken by, or reviewed and 
        approved by, the certifying land surveyor or architect.  The 
        portions of the CIC plat depicting the dimensions of the 
        portions of the common interest community described in 
        subsections (c)(8), (9), (10), and (12), may be prepared by 
        either a land surveyor or an architect.  The other portions of 
        the CIC plat shall be prepared only by a land surveyor.  A 
        certification of the CIC plat or supplemental CIC plat, or an 
        amendment to it, under this subsection by an architect is not 
        required if all parts of the CIC plat, supplemental CIC plat, or 
        amendment are prepared by a land surveyor.  Certification by the 
        land surveyor or architect does not constitute a guaranty or 
        warranty of the nature, suitability, or quality of construction 
        of any improvements located or to be located in the common 
        interest community. 
           (c) A CIC plat for a condominium, or a cooperative in which 
        the unit owners' interests are characterized as real estate, 
        shall show: 
           (1) the number of the common interest community, and the 
        boundaries, dimensions and a legally sufficient description of 
        the land included therein; 
           (2) the dimensions and location of all existing, material 
        structural improvements and roadways; 
           (3) the intended location and dimensions of any 
        contemplated common element improvements to be constructed 
        within the common interest community after the filing of the CIC 
        plat, labeled either "MUST BE BUILT" or "NEED NOT BE BUILT"; 
           (4) the location and dimensions of any additional real 
        estate, labeled as such, and a legally sufficient description of 
        the additional real estate; 
           (5) the extent of any encroachments by or upon any portion 
        of the common interest community; 
           (6) the location and dimensions of all recorded easements 
        within the land included in the common interest community 
        serving or burdening any portion of the common interest 
        community land; 
           (7) the distance and direction between noncontiguous 
        parcels of real estate; 
           (8) the location and dimensions of limited common elements, 
        except that with respect to limited common elements described in 
        section 515B.2-102, subsections (d) and (f), only such material 
        limited common elements as porches, balconies, decks, patios, 
        and garages shall be shown; 
           (9) the location and dimensions of the front, rear, and 
        side boundaries of each unit and that unit's unit identifier; 
           (10) the location and dimensions of the upper and lower 
        boundaries of each unit with reference to an established or 
        assumed datum and that unit's unit identifier; 
           (11) a legally sufficient description of any real estate in 
        which the unit owners will own only an estate for years, labeled 
        as "leasehold real estate"; 
           (12) any units which may be converted by the declarant to 
        create additional units or common elements identified separately.
           (d) A CIC plat for a planned community either shall comply 
        with subsection (c), or it shall: 
           (1) satisfy the requirements of comply with chapter 505, 
        508, or 508A, as applicable; and 
           (2) satisfy comply with the platting requirements of any 
        governmental authority within whose jurisdiction the planned 
        community is located, subject to the limitations set forth in 
        section 515B.1-106. 
           (e) If a declarant adds additional real estate, the 
        declarant shall record a supplemental CIC plat or plats for the 
        real estate being added, conforming to the requirements of this 
        section which apply to the type of common interest community in 
        question.  If less than all additional real estate is being 
        added, the supplemental CIC plat for a condominium, a planned 
        community whose CIC plat complies with subsection (c), or a 
        cooperative in which the unit owners' interests are 
        characterized as real estate, shall also show the location and 
        dimensions of the remaining portion. 
           (f) If, pursuant to section 515B.2-112, a declarant 
        subdivides or converts any unit into two or more units, common 
        elements or limited common elements, or combines two or more 
        units, the declarant shall record an amendment to the CIC plat 
        showing the location and dimensions of any new units, common 
        elements and or limited common elements thus created. 
           (g) A CIC plat which complies with subsection (c) is not 
        subject to chapter 505. 
           Sec. 13.  Minnesota Statutes 2004, section 515B.2-111, is 
        amended to read: 
           515B.2-111 [EXPANSION OF FLEXIBLE COMMON INTEREST 
        COMMUNITY.] 
           (a) To add additional real estate pursuant to a right 
        reserved under section 515B.2-106(1) 515B.2-106(a)(1), the 
        declarant and all persons whose interests in the additional real 
        estate will be conveyed to unit owners or the association, 
        except vendors under a contract for deed, shall execute and 
        record an amendment to the a supplemental declaration as 
        provided in this section.  The amendment to the supplemental 
        declaration shall be titled a "supplemental declaration," shall 
        be limited to matters authorized by this section, and shall 
        include: 
           (1) assign a unit identifier to each unit formed in the 
        additional a legally sufficient description of the real estate 
        added by the supplemental declaration; 
           (2) reallocate a description of the boundaries of each unit 
        created by the supplemental declaration, consistent with the 
        declaration, and the unit's unit identifier; 
           (3) in a planned community containing common elements, a 
        legally sufficient description of the common elements; 
           (4) a reallocation of the common element interests, votes 
        in the association, and common expense liabilities as 
        applicable, in compliance with the declaration and section 
        515B.2-108; 
           (3) describe (5) a description of any limited common 
        elements formed out of the additional real estate, designating 
        the unit to which each is allocated to the extent required by 
        section 515B.2-109; 
           (6) a statement as to whether or not the period of 
        declarant control has terminated, regardless of the reason for 
        such termination; and 
           (4) (7) contain such other provisions as may be reasonably 
        an attached affidavit attesting to the giving of the notice 
        required by the association; and subsection (b), if such notice 
        is required. 
           (5) conform to the applicable requirements of the 
        declaration and the act. 
           (b) If the period of declarant control has terminated, a 
        declarant shall give notice of its intention to add additional 
        real estate as follows: to the association (Attention:  
        president of the association) by a notice given in the manner 
        provided in section 515B.1-115 not less than 15 days prior to 
        recording the supplemental declaration which adds the additional 
        real estate.  A copy of the supplemental declaration shall be 
        attached to the notice.  The supplemental declaration may be in 
        proposed form; however, following notice, the supplemental 
        declaration shall not be changed so as to materially and 
        adversely affect the rights of unit owners or the association 
        unless a new 15-day notice is given in accordance with this 
        section. 
           (1) If the period of declarant control has expired, to the 
        association in the same manner as service of summons in a civil 
        action in district court at least 15 days prior to recording the 
        amendment.  A copy of the amendment shall be attached to the 
        notice. 
           (2) If the period of declarant control has not expired, to 
        the unit owners by notice (one notice per unit) given in the 
        manner provided in section 515B.1-115, not less than 15 days 
        prior to recording the amendment, addressed to "Unit Owner 
        Entitled to Legal Notice" at each unit or to the unit owner at 
        such other address as may be designated by notice from the unit 
        owner.  The declarant shall provide a copy of the amendment at 
        no cost to any unit owner within five business days of the unit 
        owner's request, and the notice shall include a statement to 
        that effect. 
           (3) Proof of notice to the association or the unit owners, 
        as the case may be, shall be attached to the recorded 
        amendment.  Following service of notice, the amendment shall not 
        be changed so as to materially and adversely affect the rights 
        of unit owners or the association. 
           (c) A lien upon the additional real estate that is not also 
        upon the existing common interest community is a lien only upon 
        the units, and their respective interest in the common elements 
        (if any), that are created from the additional real estate.  
        Units within the common interest community as it existed prior 
        to expansion are transferred free of liens that existed only 
        upon the additional real estate, notwithstanding the fact that 
        the interest in the common elements is a portion of the entire 
        common interest community, including the additional real estate. 
           (d) If a supplemental declaration in a planned community 
        creates common elements, then a conveyance of the common 
        elements to the association shall be recorded simultaneously 
        with the supplemental declaration.  If a supplemental 
        declaration adds additional real estate to a cooperative, then a 
        conveyance of the additional real estate to the association 
        shall be recorded simultaneously with the supplemental 
        declaration. 
           Sec. 14.  Minnesota Statutes 2004, section 515B.2-112, is 
        amended to read: 
           515B.2-112 [SUBDIVISION, COMBINATION, OR CONVERSION OF 
        UNITS.] 
           (a) If the declaration so provides, (i) a unit owned by a 
        person other than a declarant one or more units may be 
        subdivided into two or more units or combined into a lesser 
        number of units, or (ii) a unit or units owned exclusively by a 
        declarant may be subdivided, combined, or converted into two one 
        or more units, limited common elements, common elements, or a 
        combination of units, limited common elements or common 
        elements, subject to subsections (b) and (c). 
           (b) If a the unit is or units are not owned exclusively 
        by a unit owner other than a declarant, the unit owner owners of 
        the units to be combined or subdivided shall prepare cause to be 
        prepared and submit submitted to the association for approval an 
        application for an amendment to the declaration and amended CIC 
        plat, for the purpose of subdividing or combining the unit or 
        units.  The application shall contain, at a minimum, a general 
        description of the proposed subdivision or combination, and 
        shall specify in detail the matters required by paragraphs 
        (2) subsection (c)(2) and (3).  The basis for disapproval of the 
        application by the association shall be limited to (i) health or 
        safety considerations, (ii) liability considerations for the 
        association and other unit owners, (iii) aesthetic changes to 
        the common elements or another unit, (iv) any material and 
        adverse impact on the common elements or another unit, or (v) a 
        failure to comply with the declaration, this chapter, or 
        governmental laws, ordinances, or regulations.  The association 
        shall give written notice of its decision and required changes 
        to the unit owner or owners who made the application.  The 
        association shall establish fair and reasonable procedures and 
        time frames for the submission and prompt processing of the 
        applications. 
           (c) If the an application under subsection (b) is approved, 
        the unit owner shall cause an amendment and amended CIC plat to 
        be prepared based upon the approved application.  The amendment 
        shall: 
           (1) be executed by the association and by each unit owner 
        and any secured party with respect to the each unit to be 
        combined or subdivided; 
           (2) assign a unit identifier to each unit created resulting 
        from the subdivision or combination; 
           (3) reallocate the common element interest, votes in the 
        association, and common expense liability, as applicable, 
        formerly allocated to the unit or units to be combined or 
        subdivided among the unit or units created resulting from the 
        subdivision or combination on the basis of the formula described 
        in the declaration; and 
           (4) contain such other provisions as may be reasonably 
        required by the association; and 
           (5) conform to the requirements of the declaration and this 
        chapter.  The basis for disapproval shall be limited to (i) 
        structural or safety considerations, (ii) liability 
        considerations for the association and other unit owners, (iii) 
        aesthetic considerations if the changes affect exterior portions 
        of a structure, or (iv) a failure to comply with the 
        declaration, this chapter, or governmental laws, ordinances or 
        regulations.  The association shall give written notice of its 
        decision and/or required changes to the unit owner. 
           (d) If the association determines that the amendment 
        conforms and amended CIC plat conform to the approved 
        application, the declaration, and this chapter, the association 
        shall be obligated to execute the amendment and cooperate in its 
        recording cause the amendment and the amended CIC plat to be 
        recorded.  The unit owner shall record the amendment and the 
        amended CIC plat and deliver a copy of the recorded amendment 
        and amended CIC plat to the association.  The association may 
        require the unit owners executing the amendment to pay all fees 
        and costs for reviewing, preparing, and recording the amendment 
        and the amended CIC plat, and any other fees or costs incurred 
        by the association in connection therewith. 
           (c) (e) If a the unit is or units are owned 
        exclusively by a declarant, the declarant shall have the 
        authority to unilaterally prepare and record, at its expense, an 
        amendment and an amended CIC plat subdividing, combining, or 
        converting the unit or units.  The amendment shall comply 
        with the requirements of subsection (b)(1) subsections (c)(1), 
        (2), (3), and (5) (4), and shall be limited to those provisions 
        necessary to accomplish the subdivision, combination, or 
        conversion unless the consent of unit owners required to amend 
        the declaration is obtained. 
           (d) If (f) The amended CIC plat shall show the resulting 
        common elements, limited common elements or units, as 
        subdivided, combined, or converted. 
           (g) A secured party joins in the amendment pursuant to this 
        section, its party's interest and remedies shall be deemed to 
        apply to the unit or units and the common element interests that 
        result from the subdivision or conversion combination of the 
        unit or units in which the secured party held a security 
        interest.  If the secured party enforces any remedy, including 
        foreclosure of its lien, against any of the resulting 
        units created, all instruments and notices relating to the 
        foreclosure shall describe the subject property in terms of 
        the amendment and the amended descriptions CIC plat which 
        created the resulting units. 
           Sec. 15.  Minnesota Statutes 2004, section 515B.2-113, is 
        amended to read: 
           515B.2-113 [ALTERATIONS OF UNITS.] 
           (a) Subject to the provisions of the declaration and 
        applicable law, a unit owner may, at the unit owner's expense, 
        make any improvements or alterations to the unit, provided:  (i) 
        that they do not impair the structural integrity or mechanical 
        systems, affect the common elements, or impair the support of 
        any portion of the common interest community; (ii) that prior 
        arrangements are made with the association to ensure that other 
        unit owners are not disturbed; (iii) that the common elements 
        are not damaged; and (iv) that the common elements and other 
        units are protected against mechanics' liens. 
           (b) Subject to the provisions of applicable law, a unit 
        owner of a unit in residential use may, at the unit owner's 
        expense, make improvements or alterations to the unit as 
        necessary for the full enjoyment of the unit by any person 
        residing in the unit who has a handicap or disability, as 
        provided in the Fair Housing Amendments Act, United States Code, 
        title 42, section 3601, et seq., and the Minnesota Human Rights 
        Act, chapter 363A, and any amendments to those acts. 
           (c) The declaration, bylaws, rules, and regulations, or 
        agreements with the association may not prohibit the 
        improvements or alterations referred to in subsection (b), but 
        may reasonably regulate the type, style, and quality of the 
        improvements or alterations, as they relate to health, safety, 
        and architectural standards.  In addition, improvements or 
        alterations made pursuant to subsection (b) must satisfy the 
        requirements of comply with subsection (a)(i), (ii), (iii), and 
        (iv). 
           (d) Notwithstanding any contrary provision of section 
        515B.1-102, subsection (b) applies to all common interest 
        communities subject to this chapter, chapter 515, or 515A.  The 
        unit owner's rights under this section may not be waived. 
           (e) Subsection (b) does not apply to restrictions on 
        improvements or alterations imposed by statute, rule, or 
        ordinance. 
           (f) Subject to the provisions of the declaration and 
        applicable law, a unit owner may, at the unit owner's expense, 
        after acquiring title to an adjoining unit or an adjoining part 
        of an adjoining unit, with the prior written approval of the 
        association and first mortgagees of the affected units, remove 
        or alter any intervening partition or create apertures therein, 
        even if the partition is part of the common elements, if those 
        acts do not impair the structural integrity or mechanical 
        systems or lessen the support of any portion of the common 
        interest community.  The adjoining unit owners shall have the 
        exclusive license to use the space occupied by the removed 
        partition, but the use shall not create an easement or vested 
        right.  Removal of partitions or creation of apertures under 
        this paragraph is not an alteration of boundaries.  The 
        association may require that the owner or owners of units 
        affected replace or restore any removed partition, that the unit 
        owner comply with subsection (a)(i), (ii) and (iii), and that 
        the unit owner pay all fees and costs incurred by the 
        association in connection with the alteration. 
           Sec. 16.  Minnesota Statutes 2004, section 515B.2-118, is 
        amended to read: 
           515B.2-118 [AMENDMENT OF DECLARATION.] 
           (a) The declaration, including any CIC plat, may be amended 
        only by vote or written agreement of unit owners of units to 
        which at least 67 percent of the votes in the association are 
        allocated, or any greater or other requirement the declaration 
        specifies, subject to the following qualifications: 
           (1) A declarant may execute supplemental declarations or 
        amendments under section 515B.2-111 or 515B.2-112. 
           (2) The association and certain unit owners, as applicable, 
        may execute amendments under section 515B.2-107, 515B.2-109, 
        515B.2-112, 515B.2-113, 515B.2-114, 515B.2-119, 515B.2-122, 
        515B.2-123, or 515B.2-124. 
           (3) The unanimous written consent of the unit owners is 
        required for any amendment which (i) creates or increases 
        special declarant rights, (ii) increases the number of units, 
        (iii) changes the boundaries of any unit, (iv) changes the 
        allocated interests of a unit, (v) changes common elements to 
        limited common elements or units, (vi) changes the authorized 
        use of a unit from residential to nonresidential, or conversely, 
        or (vii) changes the characterization of the unit owner's 
        interest in a cooperative from real estate to personal property, 
        or conversely; unless the amendment is expressly permitted or 
        required by other provisions of this chapter.  Where the 
        amendment involves the conversion of common elements into a unit 
        or units, the title to the unit or units created shall, upon 
        recording of the amendment, vest in the association free and 
        clear of the interests of the unit owners. 
           (4) The declaration may specify less than 67 percent for 
        approval of an amendment, but only if all of the units are 
        restricted to nonresidential use. 
           (b) No action to challenge the validity of an amendment 
        adopted by the association pursuant to this section may be 
        brought more than two years after the amendment is recorded. 
           (c) Every amendment to the declaration shall be recorded in 
        every county in which any portion of the common interest 
        community is located and is effective only when recorded.  If an 
        amendment (i) changes the number of units, (ii) changes the 
        boundary of a unit, (iii) changes common elements to limited 
        common elements, or conversely, or (iv) makes any other change 
        that affects the CIC plat, then an amendment to the CIC plat 
        reflecting the change shall be recorded. 
           Sec. 17.  Minnesota Statutes 2004, section 515B.2-119, is 
        amended to read: 
           515B.2-119 [TERMINATION OF COMMON INTEREST COMMUNITY.] 
           (a) Except as otherwise provided in this chapter, a common 
        interest community may be terminated only by agreement of unit 
        owners of units to which at least 80 percent of the votes in the 
        association are allocated, and 80 percent of the first 
        mortgagees of units (each mortgagee having one vote per unit 
        financed), or any larger percentage the declaration specifies.  
        The declaration may specify a smaller percentage only if all of 
        the units are restricted to nonresidential use. 
           (b) An agreement to terminate shall be evidenced by a 
        written agreement, executed in the same manner as a deed by the 
        number of unit owners and first mortgagees of units required by 
        subsection (a).  The agreement shall specify a date after which 
        the agreement shall be void unless recorded before that date.  
        The agreement shall also specify a date by which the termination 
        of the common interest community and the winding up of its 
        affairs must be accomplished.  A certificate of termination 
        executed by the association evidencing the termination shall be 
        recorded on or before the termination date, or the agreement to 
        terminate shall be revoked.  The agreement to terminate, or a 
        memorandum thereof, and the certificate of termination shall be 
        recorded in every county in which a portion of the common 
        interest community is situated and is effective only upon 
        recording. 
           (c) In the case of a condominium or planned community 
        containing only units having upper and lower boundaries, a 
        termination agreement may provide that all of the common 
        elements and units of the common interest community must be sold 
        following termination.  If, pursuant to the agreement, any real 
        estate in the common interest community is to be sold following 
        termination, the termination agreement shall set forth the 
        minimum terms of sale acceptable to the association. 
           (d) In the case of a condominium or planned community 
        containing any units not having upper and lower boundaries, a 
        termination agreement may provide for sale of the common 
        elements, but it may not require that the units be sold 
        following termination, unless the original declaration provided 
        otherwise or all unit owners whose units are to be sold consent 
        to the sale. 
           (e) The association, on behalf of the unit owners, shall 
        have authority to contract for the sale of real estate in a 
        common interest community pursuant to this section, subject to 
        the required approval.  The agreement to terminate shall be 
        deemed to grant to the association a power of attorney coupled 
        with an interest to effect the conveyance of the real estate on 
        behalf of the holders of all interests in the units, including 
        without limitation the power to execute all instruments of 
        conveyance and related instruments.  Until the sale has been 
        completed, all instruments in connection with the sale have been 
        executed and the sale proceeds distributed, the association 
        shall continue in existence with all powers it had before 
        termination. 
           (1) The instrument conveying or creating the interest in 
        the common interest community shall include as exhibits (i) an 
        affidavit of the secretary of the association certifying that 
        the approval required by this section has been obtained and (ii) 
        a schedule of the names of all unit owners in the common 
        interest community as of the date of the approval. 
           (2) Proceeds of the sale shall be distributed to unit 
        owners and secured parties as their interests may appear, in 
        accordance with subsections (h), (i), (j), and (k). 
           (3) Unless otherwise specified in the agreement of 
        termination, until the association has conveyed title to the 
        real estate, each unit owner and the unit owner's successors in 
        interest have an exclusive right to occupancy of the portion of 
        the real estate that formerly constituted the unit.  During the 
        period of that occupancy, each unit owner and the unit owner's 
        successors in interest remain liable for all assessments and 
        other obligations imposed on unit owners by this chapter, the 
        declaration or the bylaws. 
           (f) The legal description of the real estate constituting 
        the common interest community shall, upon the date of recording 
        of the certificate of termination referred to in subsection (b), 
        be as follows: 
           (1) In a planned community utilizing a CIC plat complying 
        with section 515B.2-110(d)(1) and (2), the lot and block 
        description contained in the CIC plat, and any amendments 
        thereto, subject to any subsequent conveyance or taking of a fee 
        interest in any part of the property. 
           (2) In a condominium or cooperative, or a planned community 
        utilizing a CIC plat complying with section 515B.2-110(c), the 
        underlying legal description of the real estate as set forth in 
        the declaration creating the common interest community, and any 
        amendments thereto, subject to any subsequent conveyance or 
        taking of a fee interest in any part of the property. 
           (3) The legal description referred to in this subsection 
        shall apply upon the recording of the certificate of 
        termination.  The recording officer for each county in which the 
        common interest community is located shall index the property 
        located in that county in its records under the legal 
        description required by this subsection from and after the date 
        of recording of the certificate of termination.  In the case of 
        registered property, the registrar of titles shall cancel the 
        existing certificates of title with respect to the property and 
        issue one or more certificates of title for the property 
        utilizing the legal description required by this subsection. 
           (g) In a condominium or planned community, if the agreement 
        to terminate provides that the real estate constituting the 
        common interest community is not to be sold following 
        termination, title to the common elements and, in a common 
        interest community containing only units having upper and lower 
        boundaries described in the declaration, title to all the real 
        estate in the common interest community, vests in the unit 
        owners upon termination as tenants in common in proportion to 
        their respective interest as provided in subsection (k), and 
        liens on the units shift accordingly.  While the tenancy in 
        common exists, each unit owner and the unit owner's successors 
        in interest have an exclusive right to occupancy of the portion 
        of the real estate that formerly constituted the unit. 
           (h) The proceeds of any sale of real estate pursuant to 
        subsection (e), together with the assets of the association, 
        shall be held by the association as trustee for unit owners, 
        secured parties and other holders of liens on the units as their 
        interests may appear.  Before distributing any proceeds, the 
        association shall have authority to deduct from the proceeds of 
        sale due with respect to the unit (i) unpaid assessments levied 
        by the association with respect to the unit, (ii) unpaid real 
        estate taxes or special assessments due with respect to the 
        unit, and (iii) the share of expenses of sale and winding up of 
        the association's affairs with respect to the unit. 
           (i) Following termination of a condominium or planned 
        community, creditors of the association holding liens on the 
        units perfected before termination may enforce those liens in 
        the same manner as any lien holder, in order of priority based 
        upon their times of perfection.  All other creditors of the 
        association are to be treated as if they had perfected liens on 
        the units immediately before termination. 
           (j) In a cooperative, the declaration may provide that all 
        creditors of the association have priority over any interests of 
        unit owners and creditors of unit owners.  In that event, 
        following termination, creditors of the association holding 
        liens on the cooperative which were perfected before termination 
        may enforce their liens in the same manner as any lien holder, 
        in order of priority based upon their times of perfection.  All 
        other creditors of the association shall be treated as if they 
        had perfected a lien against the cooperative immediately before 
        termination.  Unless the declaration provides that all creditors 
        of the association have that priority: 
           (1) the lien of each creditor of the association which was 
        perfected against the association before termination becomes, 
        upon termination, a lien against each unit owner's interest in 
        the unit as of the date the lien was perfected; 
           (2) any other creditor of the association is to be treated 
        upon termination as if the creditor had perfected a lien against 
        each unit owner's interest immediately before termination; 
           (3) the amount of the lien of an association's creditor 
        described in paragraphs (1) and (2) against each of the unit 
        owners' interest shall be proportionate to the ratio which each 
        unit's common expense liability bears to the common expense 
        liability of all of the units; 
           (4) the lien of each creditor of each unit owner which was 
        perfected before termination continues as a lien against that 
        unit owner's interest in the unit as of the date the lien was 
        perfected; and 
           (5) the assets of the association shall be distributed to 
        all unit owners and all lien holders as their interests may 
        appear in the order described in this section.  Creditors of the 
        association are not entitled to payment from any unit owner in 
        excess of the amount of the creditor's lien against that unit 
        owner's interest. 
           (k) The respective interest of unit owners referred to in 
        subsections (e), (f), (g), (h) and (i) are as follows: 
           (1) Except as provided in paragraph (2), the respective 
        interests of unit owners are the fair market values of their 
        units, allocated interests, and any limited common elements 
        immediately before the termination, as determined by one or more 
        independent appraisers selected by the association.  The 
        decision of the independent appraisers must be distributed to 
        the unit owners and becomes final unless disapproved within 30 
        days after distribution by unit owners of units to which 25 
        percent of the votes in the association are allocated.  The 
        proportion of any unit's interest to that of all units is 
        determined by dividing the fair market value of that unit by the 
        total fair market values of all the units. 
           (2) If any unit or any limited common element is destroyed 
        to the extent that an appraisal of the fair market value thereof 
        before destruction cannot be made, the interests of all unit 
        owners are shall be measured by:  (i) in a condominium, 
        their respective allocations of common element interests 
        immediately before the termination, (ii) in a cooperative, their 
        respective ownership interests immediately before the 
        termination, and (iii) in a planned community, their 
        respective allocations of common expense liabilities expenses 
        immediately before the termination. 
           (1) In a condominium or planned community, except as 
        provided in subsection (m), foreclosure or enforcement of a lien 
        or encumbrance against the entire common interest community does 
        not terminate, of itself, the common interest community, and 
        foreclosure or enforcement of a lien or encumbrance against a 
        portion of the common interest community does not withdraw that 
        portion from the common interest community. 
           (m) In a condominium or planned community, if a lien or 
        encumbrance against a portion of the real estate comprising the 
        common interest community has priority over the declaration and 
        the lien or encumbrance has not been partially released, the 
        parties foreclosing the lien or encumbrance, upon foreclosure, 
        may record an instrument excluding the real estate subject to 
        that lien or encumbrance from the common interest community. 
           (n) Following the termination of a common interest 
        community in accordance with this section, the board of 
        directors of the association shall cause the association to be 
        dissolved in accordance with law. 
           Sec. 18.  Minnesota Statutes 2004, section 515B.2-121, is 
        amended to read: 
           515B.2-121 [MASTER ASSOCIATIONS.] 
           (a) A master association formed after June 1, 1994, shall 
        be organized as a Minnesota profit, nonprofit or cooperative 
        corporation.  A master association shall be incorporated prior 
        to the delegation to it of any powers under this chapter. 
           (b) The members of the master association shall be any 
        combination of (i) unit owners of one or more common interest 
        communities, (ii) one or more associations, (iii) one or more 
        master associations, or (iv) owners of real estate or property 
        owners owner's associations not subject to this chapter in 
        combination with any other category of member.  An association 
        or its members may be members of an entity created before June 
        1, 1994, which performs functions similar to those performed by 
        a master association regardless of whether the entity is subject 
        to this chapter. 
           (c) A master association shall be governed by a board of 
        directors.  Except as expressly prohibited by the master 
        declaration, the master association's articles of incorporation 
        or bylaws, or other provisions of this chapter, the master 
        association board may act in all instances on behalf of the 
        master association.  The directors of a master association shall 
        be elected or, if a nonprofit corporation, elected or appointed, 
        in a manner consistent with the requirements of the statute 
        under which the master association is formed and of the master 
        association's articles of incorporation and bylaws, and subject 
        to the following requirements: 
           (1) Except as set forth in subsections (2) and (3), the 
        members of the master association shall elect the board of 
        directors.  A majority of the directors shall be members of the 
        master association or members of a member of the master 
        association, and shall be persons other than a declarant or 
        affiliate of a declarant.  If the member is not a natural 
        person, it may designate a natural person to act on its behalf. 
           (2) The articles of incorporation or bylaws of the master 
        association may authorize a any person other than, whether or 
        not the person is a member of, or otherwise subject to, the 
        master association or a unit owner, including a declarant, to 
        appoint or elect one director.  
           (3) A master association's articles of incorporation may 
        suspend the members' right to elect or, in the case of a 
        nonprofit corporation, elect or appoint, the master 
        association's board of directors for a specified time period.  
        During this period, the person or persons who execute the master 
        declaration under subsection (f)(1), or their successors or 
        assigns, may appoint the directors.  The period during which the 
        person or persons may appoint the directors begins when the 
        master declaration is recorded and terminates upon the earliest 
        of: 
           (i) the voluntary surrender of the right to appoint 
        directors; 
           (ii) the date ten years after the date the master 
        declaration is recorded; 
           (iii) the date, if any, in the articles of incorporation; 
        or 
           (iv) the date when at least 75 percent of the associations 
        that are members of the master association or whose members are 
        members of the master association are controlled by their 
        members.  An association's members control the association when 
        they have the right to elect or appoint a majority of the 
        association's voting directors units and other parcels of real 
        estate which are referred to in subsection (f)(1)(vii) have been 
        conveyed to such persons for occupancy by the persons or their 
        tenants. 
           (4) The term of any director appointed under subsection (3) 
        expires 60 days after the right to appoint directors 
        terminates.  The master association's board of directors shall 
        call an annual or special meeting of the master association's 
        members to elect or appoint successor directors within the 
        60-day period. 
           (5) The system for the election of directors shall be fair 
        and equitable and shall take into account the number of members 
        of each association any of whose powers are delegated to the 
        master association, the needs of the members of the master 
        association, the allocation of liability for master association 
        common expenses, and the types of common interest communities 
        and other real estate subject to the master association. 
           (d) The articles of incorporation or bylaws of the master 
        association may authorize special classes of directors and 
        allocations of director voting rights, as follows:  (i) classes 
        of directors that are elected by different classes of members, 
        to address operational, physical, or administrative differences 
        within the master association, or (ii) class voting by the 
        classes of directors on specific issues affecting only a certain 
        class or classes of members or, units or other parcels of real 
        estate, or to otherwise protect the legitimate interests of such 
        class or classes.  No person may utilize such special classes or 
        allocations for the purpose of evading any limitation imposed on 
        declarants by this chapter. 
           (e) The officers of a master association shall be elected, 
        appointed, or designated in a manner consistent with the statute 
        under which the master association is formed and consistent with 
        the master association articles of incorporation and bylaws. 
           (f) The creation and authority of a master association 
        shall be governed by the following requirements: 
           (1) A master declaration shall be recorded in connection 
        with the creation of a master association.  The master 
        declaration shall be executed by the owners of the real estate 
        subjected to the master declaration.  The master declaration 
        shall contain, at a minimum: 
           (i) the name of the master association; 
           (ii) a legally sufficient description of the real estate 
        which is subject to the master declaration and a legally 
        sufficient description of any other real estate which may be 
        subjected to the master declaration pursuant to subsection (g); 
           (iii) a statement as to whether the real estate subject to, 
        and which may be subjected to, the master declaration 
        collectively is or collectively will be a separate common 
        interest community; 
           (iv) a description of the members of the master 
        association; 
           (v) a description of the master association's powers.  To 
        be exercised by the master association on behalf of its members 
        and on behalf of the members of its members in the case of 
        members that are common interest communities.  The provisions of 
        the master declaration with respect to the grant and exercise of 
        powers for common interest communities subject to the master 
        association shall be consistent with the declarations of the 
        common interest communities that delegate powers to the master 
        association the extent described in the master declaration, a 
        master association has the powers with respect to the master 
        association's members and the property subject to the master 
        declaration that section 515B.3-102 grants to an association 
        with respect to the association's members and the property 
        subject to the declaration.  A master association also has the 
        powers delegated to it by an association pursuant to subsection 
        (f)(2) or by a property owner's association not subject to the 
        chapter; provided (i) that the master declaration identifies the 
        powers and authorizes the delegation either expressly or by a 
        grant of authority to the board of the association or property 
        owner's association and (ii) that the master association board 
        has not refused the delegation pursuant to subsection (f)(4).  
        The provisions of the declarations of the common interest 
        communities, or the provisions of recorded instruments governing 
        other property subject to the master declaration, that delegate 
        powers to the master association shall be consistent with the 
        provisions of the master declaration that govern the delegation 
        of the powers; 
           (vi) a description of the formula formulas governing the 
        allocation of assessments and member voting rights, including 
        any special classes or allocations referred to in subsection 
        (d); and 
           (vii) a statement of the total number of units and other 
        parcels of real estate intended for residential use by a person 
        or the person's tenants that are (i) subject to the master 
        declaration as initially recorded and (ii) intended to be 
        created by the addition of real estate or by the subdivision of 
        units or other parcels of real estate; and 
           (viii) the requirements for amendment of the master 
        declaration, other than an amendment under subsection (g). 
           (2) The declaration of a common interest community subject 
        to the master association shall contain provisions delegating, 
        or authorizing the delegation of, powers to the master 
        association in accordance with subsection (f)(3).  The 
        provisions of the declarations relating to the delegation shall 
        be consistent with the provisions of the master declaration 
        granting or reserving those powers to the master association.  
           (3) The declaration of a common interest community located 
        on property subject to a master declaration may: 
           (i) delegate any of the powers described in section 
        515B.3-102 to a the master association.; provided, that a 
        delegation of the powers described in section 515B.3-102(a)(2) 
        is effective only if expressly stated in the declaration; and 
           (ii) authorize the board to delegate any of the powers 
        described in section 515B.3-102, except for the powers described 
        in section 515B.3-102(a)(2), to a the master association. 
           (4) (3) With respect to any other property subject to a 
        master association, there need not be an instrument other than 
        the master declaration recorded against the property to empower 
        the master association to exercise powers with respect to the 
        property. 
           (5) (4) If a declaration or other recorded instrument 
        authorizes a the board or owner the board of a property owner's 
        association to delegate powers to a master association, the 
        master association board may refuse any delegation of powers 
        that does not comply with (i) this chapter, (ii) the declaration 
        or other recorded instrument, or (iii) the organizational 
        documents of the master association. 
           (6) (5) The failure of a declaration, a board or an owner 
        of property subject to a master association to properly delegate 
        some or all of the powers to the master association does not 
        affect the authority of the master association to exercise those 
        and other powers with respect to other common interest 
        communities or owners of properties that are subject to the 
        master association. 
           (g) The master declaration may authorize other real estate 
        to be subjected to the master declaration.  The other real 
        estate shall be subjected to the master declaration by an 
        amendment executed by the owner of the other real estate and 
        approved in writing by the person who executed any other person 
        or persons required by the master declaration, if other than the 
        owner of the other real estate and recorded. 
           (h) Sections 515B.3-103(a), (b), and (g), 515B.3-108, 
        515B.3-109, 515B.3-110, and 515B.3-112 shall apply in the 
        conduct of the affairs of a master association.  But the rights 
        of voting, notice, and other rights enumerated in those sections 
        apply only to persons who elect or appoint the board of a master 
        association, whether or not those persons are otherwise unit 
        owners within the meaning of this chapter. 
           (i) If so provided in the master declaration, a master 
        association may levy assessments for common expenses of the 
        master association against the property subject to the master 
        declaration, and have and foreclose liens securing the 
        assessments.  The liens shall have the same priority against 
        secured parties, shall include the same fees and charges, and 
        may be foreclosed in the same manner, as assessment liens under 
        section 515B.3-116.  The master association's lien shall have 
        priority as against the lien of an association or property 
        owner's association subject to the master association, 
        regardless of when the lien arose or was perfected. 
           (1) Master association common expenses shall be allocated 
        among the members of the master association in a fair and 
        equitable manner.  If the members are include associations or 
        property owners' owner's associations, then the master 
        assessments may be allocated among and levied against the 
        associations or property owner's associations, or allocated 
        among and levied directly against the units or other parcels of 
        real estate owned by the members of the association or property 
        owner's association.  If so provided in the master declaration, 
        master assessments levied against a member association or 
        property owner's association are allocated among and levied 
        against the units or other parcels of real estate owned by the 
        members of the association or property owner's association.  If 
        applicable and appropriate, the formulas and principles 
        described in section 515B.2-108, subsections (b), (c), (d), and 
        (e), shall be used in making the allocations.  The assessment 
        formulas and procedures described in the declarations of any 
        common interest communities or any instruments governing other 
        real estate subject to the master association shall not conflict 
        with the formulas and procedures described in the master 
        declaration. 
           (2) The master declaration may exempt from liability for 
        all or a portion of master association assessments any person 
        authorized by subsection (c)(3) to appoint the members of the 
        master association board for master association common expenses, 
        or any other person, and exempt any unit or other parcel of real 
        estate owned by the person from a lien for such common expenses 
        assessments, until a dwelling building constituting or located 
        within the unit or other parcel of real estate is substantially 
        completed.  Substantial completion shall be evidenced by a 
        certificate of occupancy in a jurisdiction that issues that 
        certificate. 
           (j) A master association shall not be used, directly or 
        indirectly, to avoid or nullify any warranties or other 
        obligations for which a declarant of a common interest community 
        subject to the master association is responsible, or to 
        otherwise avoid the requirements of this chapter. 
           Sec. 19.  Minnesota Statutes 2004, section 515B.2-123, is 
        amended to read: 
           515B.2-123 [CHANGE OF FORM OF COMMON INTEREST COMMUNITY.] 
           (a) The legal form of a condominium, planned community or 
        cooperative subject to this chapter may be changed to a 
        condominium or planned community, subject to any requirements 
        contained in the declaration or bylaws of the common interest 
        community, and the following requirements: 
           (1) Subject to paragraphs (2) and (3), the change of form 
        shall be approved in writing by the unit owners of units to 
        which at least 80 percent of the votes in the association are 
        allocated, and 80 percent of the first mortgagees of record of 
        the units (each mortgagee having one vote per unit financed).  
        The declaration or bylaws may specify a smaller percentage only 
        if all of the units are restricted to nonresidential use.  The 
        approval shall include the approval of A declaration and bylaws 
        satisfying the requirements of complying with this chapter shall 
        be approved, subject to the foregoing approval standards, with 
        respect to the new common interest community. 
           (2) If the period of declarant control has not expired, the 
        change of form shall also be approved in writing by the 
        declarant. 
           (3) If the existing common interest community is a 
        cooperative, the change of form shall also be approved in 
        writing by (i) each holder of a blanket mortgage of record and 
        (ii) 80 percent of the secured parties holding interests in 
        share loans encumbering the cooperative units or memberships 
        (each secured party having one vote per share loan owned). 
           (b) Upon approval as provided in subsection (a), the 
        association in the existing common interest community shall have 
        authority to execute the declaration of the new common interest 
        community on behalf of the unit owners of, and all other persons 
        holding an interest in, the units or other property which is a 
        part of the existing common interest community, and to do all 
        other acts necessary to create the new common interest community.
           (c) Upon approval as provided in subsection (a), the 
        association in the existing common interest community shall have 
        a power of attorney coupled with an interest to effect the 
        conveyance of the units or any other real estate owned by the 
        unit owners or the association, which is a part of the existing 
        common interest community, on behalf of the unit owners and all 
        other holders of interests in the common interest community, 
        including without limitation the power to execute all 
        instruments of conveyance and related instruments. 
           (d) In a change of legal form under this section, the 
        offer, conveyance or exchange of a unit in the new common 
        interest community to or with the person owning the unit in the 
        existing common interest community shall not be subject to 
        article 4 of this chapter. 
           (e) A change of legal form under this section shall not 
        affect any preexisting obligations or liabilities of a declarant 
        under any statute, or under the disclosure statement, 
        declaration or bylaws of the existing common interest 
        community.  The declarant of the existing common interest 
        community shall continue to have the rights and obligations of a 
        declarant with respect to the offer and sale of units owned by 
        it or its affiliates in the new common interest community. 
           Sec. 20.  Minnesota Statutes 2004, section 515B.2-124, is 
        amended to read: 
           515B.2-124 [SEVERANCE OF COMMON INTEREST COMMUNITY.] 
           (a) Unless the declaration provides otherwise, a part of a 
        common interest community containing one or more units, with or 
        without common elements, may be severed from the common interest 
        community, subject to the requirements of this section.  Subject 
        to any additional requirements contained in the declaration, the 
        severance shall be approved in a written severance 
        agreement satisfying the requirements of complying with this 
        section, executed by: 
           (1) unit owners entitled to cast at least 67 percent of the 
        votes in the association, which approval shall include the 
        approval of unit owners entitled to cast a majority of the votes 
        allocated to units in the remaining common interest community 
        and the approval of unit owners entitled to cast a majority of 
        the votes allocated to units in the part of the common interest 
        community being severed; 
           (2) declarant until the earlier of five years after the 
        recording of the declaration or the time at which declarant no 
        longer owns an unsold unit; and 
           (3) in the case of a cooperative, all holders of mortgages 
        or contracts for deed on the entire real estate constituting the 
        cooperative. 
           (b) The declaration may specify a smaller percentage for 
        unit owner approval only if all of the units are restricted to 
        nonresidential use. 
           (c) The severance agreement shall specify a severance date 
        by which the severance of the common interest community shall be 
        accomplished, after which the severance agreement is void.  The 
        severance agreement shall be deemed to grant to the association 
        a power of attorney coupled with an interest to effect the 
        severance of the common interest community on behalf of the unit 
        owners and the holders of all other interests in the units, 
        including without limit the power to execute the amendment to 
        the declaration, any instruments of conveyance, and all related 
        instruments. 
           (d) The severance agreement shall: 
           (1) Approve an amendment to the declaration complying with 
        this chapter, in substantially the same form to be recorded, 
        which, at a minimum (i) legally describes the real estate 
        constituting the remaining common interest community and the 
        real estate being severed, (ii) restates the number of units in 
        the remaining common interest community, (iii) reallocates the 
        interests of the unit owners in the remaining common interest 
        community among the remaining units in accordance with the 
        allocation formula set forth in the declaration, and (iv) 
        recites any easements to which the severed portion of the common 
        interest community remains subject. 
           (2) Approve an amendment to the articles of incorporation 
        and bylaws of the remaining common interest community, if 
        necessary. 
           (3) Authorize the association to execute and record the 
        amended declaration, articles of incorporation or bylaws on 
        behalf of the unit owners and all other persons holding an 
        interest in the remaining common interest community, and to take 
        other actions necessary to accomplish the severance of the 
        common interest community. 
           (4) Allocate the assets and liabilities of the association 
        between the association and (i) a new association formed 
        pursuant to subsection (g), or (ii) the owners of the units 
        being severed, subject to a lien against their interest in the 
        severed real estate or their share in the assets of the 
        association in favor of any person that held a security interest 
        in their unit. 
           (5) If the units that are being severed from the common 
        interest community will not be included in a new common interest 
        community that is (i) formed simultaneously with the severance 
        of the common interest community, and (ii) includes all of the 
        units and substantially all of the common elements being 
        severed, then the agreement shall contain the written consent of 
        holders of first mortgages on all units that are being severed, 
        and shall describe in detail the proposed disposition of all 
        real estate to be severed and all assets of the association 
        allocated to the severed units, and the distribution of the 
        proceeds of the disposition, if any. 
           (e) The severance agreement or a memorandum of it shall be 
        recorded in every county in which a part of the common interest 
        community is located.  The recording of the severance agreement 
        or memorandum of it shall, from the date of recording, 
        constitute notice to all persons subsequently acquiring an 
        interest in the common interest community that the common 
        interest community is being severed, and that those persons 
        acquire their interests subject to the terms and conditions 
        contained in the severance agreement and the amendment to the 
        declaration. 
           (f) The amendment to the declaration of the remaining 
        common interest community shall be recorded on or before the 
        severance date or the severance agreement and the amendment to 
        the declaration is void as of the day after the severance date.  
        The recording of the amendment to the declaration shall complete 
        the severance of the common interest community and release the 
        severed part of the common interest community from the 
        declaration without further action by any person. 
           (g) If the unit owners whose units are being severed from 
        the common interest community intend to form a new common 
        interest community, then said unit owners shall unanimously, by 
        at least 80 percent of the votes allocated by the existing 
        declaration to said units, approve a new declaration, articles 
        of incorporation and bylaws to govern the new common interest 
        community no later than 60 days before the effective date of the 
        severance.  The new declaration creating the new common interest 
        community shall be recorded simultaneously with the amendment to 
        the existing declaration.  No later than 30 days before after 
        the effective date of the severance agreement, the unit owners 
        shall cause articles of incorporation creating the 
        association governing intended to govern the new common interest 
        community to be created by filing the articles of incorporation 
        of the association shall be filed with the secretary of state 
        and promptly thereafter the unit owners whose units are being 
        severed shall elect a board of directors to act on behalf of the 
        new association.  The board of directors of the new association 
        shall coordinate the completion of the severance cooperate with 
        the board of directors of the existing association to complete 
        the severance.  The existing association shall retain all 
        authority to act on behalf of the common interest community 
        until the amendment to the existing declaration is and the new 
        declaration are recorded. 
           (h) The legal descriptions of the real estate constituting 
        (i) the remaining common interest community, and (ii) the 
        severed portion of the common interest community shall, at the 
        time of recording of the amendment to the declaration referred 
        to in subsection (e), be as follows: 
           (1) In a planned community using a CIC plat that complies 
        with section 515B.2-110, subsection (d), the lot and block 
        descriptions contained in the CIC plat, and any amendments to 
        it, with respect to (i) the remaining common interest community, 
        and (ii) the severed portion of the common interest community. 
           (2) In a condominium, or cooperative or planned community 
        using a CIC plat that complies with section 515B.2-110, 
        subsection (c), (i) the CIC plat description relating to the 
        remaining common interest community, and (ii) the part of the 
        underlying legal description of the real estate in the 
        declaration creating the common interest community, and any 
        amendments to it, relating to the severed part of the common 
        interest community. 
           (3) The recording officer for each county in which the 
        common interest community is located shall index the property 
        located in that county in its records under the legal 
        descriptions required by this subsection as of the date of 
        recording of the amendment to the declaration.  In the case of 
        registered property, the registrar of titles shall cancel the 
        existing certificates of title for the severed part of the 
        common interest community and issue certificates of title for 
        the property using the legal descriptions required by this 
        subsection. 
           (i) In a condominium or planned community, if the severed 
        part of the common interest community is not to be reconstituted 
        as a new common interest community following severance, title to 
        the common elements and, in a common interest community in which 
        all units have upper and lower boundaries described in the 
        declaration title to all the real estate in the severed part of 
        the common interest community, vests in the unit owners of the 
        units being severed, upon severance, as tenants in common in 
        proportion to their respective allocated interests in the 
        declaration, and liens on the units shift accordingly.  While 
        the tenancy in common exists, each unit owner and the unit 
        owner's successors in interest have an exclusive right to 
        occupancy of the portion of the real estate that formerly 
        constituted the unit, and a nonexclusive easement across, over 
        and under any common elements contained in the severed portion 
        of the common interest community for enjoyment, access, 
        utilities, communication services, and other essential services, 
        as applicable. 
           (j) No common interest community shall be severed in such a 
        manner as to materially impair access, utility services, 
        communication services, or other essential services with respect 
        to either the remaining common interest community or the severed 
        part of the common interest community. 
           Sec. 21.  Minnesota Statutes 2004, section 515B.3-101, is 
        amended to read: 
           515B.3-101 [ORGANIZATION OF UNIT OWNERS' ASSOCIATION.] 
           A common interest community shall be administered by a unit 
        owners' an association.  The unit owners' association shall be 
        incorporated no later than the date the common interest 
        community is created.  The membership of the association at all 
        times consists exclusively of all unit owners or, following 
        termination of the common interest community, of all former unit 
        owners entitled to distributions of proceeds under section 
        515B.2-119 or their heirs, successors, or assigns.  The 
        association shall be organized as a Minnesota profit or 
        nonprofit corporation, or may, in the case of a cooperative, be 
        organized under chapter 308A.  In the event of a conflict 
        between this chapter and any other chapter under which the 
        association is incorporated, this chapter shall control. 
           Sec. 22.  Minnesota Statutes 2004, section 515B.3-102, is 
        amended to read: 
           515B.3-102 [POWERS OF UNIT OWNERS' ASSOCIATION.] 
           (a) Except as provided in subsection (b), and subject to 
        the provisions of the declaration or bylaws, the association 
        shall have the power to: 
           (1) adopt, amend and revoke rules and regulations not 
        inconsistent with the articles of incorporation, bylaws and 
        declaration, as follows:  (i) regulating the use of the common 
        elements; (ii) regulating the use of the units, and conduct of 
        unit occupants, which may jeopardize the health, safety or 
        welfare of other occupants, which involves noise or other 
        disturbing activity, or which may damage the common elements or 
        other units; (iii) regulating or prohibiting animals; (iv) 
        regulating changes in the appearance of the common elements and 
        conduct which may damage the common interest community; (v) 
        regulating the exterior appearance of the common interest 
        community, including, for example, balconies and patios, window 
        treatments, and signs and other displays, regardless of whether 
        inside a unit; (vi) implementing the articles of incorporation, 
        declaration and bylaws, and exercising the powers granted by 
        this section; and (vii) otherwise facilitating the operation of 
        the common interest community; 
           (2) adopt and amend budgets for revenues, expenditures and 
        reserves, and levy and collect assessments for common expenses 
        from unit owners; 
           (3) hire and discharge managing agents and other employees, 
        agents, and independent contractors; 
           (4) institute, defend, or intervene in litigation or 
        administrative proceedings (i) in its own name on behalf of 
        itself or two or more unit owners on matters affecting the 
        common elements or other matters affecting the common interest 
        community or, (ii) with the consent of the owners of the 
        affected units on matters affecting only those units; 
           (5) make contracts and incur liabilities; 
           (6) regulate the use, maintenance, repair, replacement, and 
        modification of the common elements and the units; 
           (7) cause improvements to be made as a part of the common 
        elements, and, in the case of a cooperative, the units; 
           (8) acquire, hold, encumber, and convey in its own name any 
        right, title, or interest to real estate or personal property, 
        but (i) common elements in a condominium or planned community 
        may be conveyed or subjected to a security interest only 
        pursuant to section 515B.3-112, or (ii) part of a cooperative 
        may be conveyed, or all or part of a cooperative may be 
        subjected to a security interest, only pursuant to section 
        515B.3-112; 
           (9) grant easements for public utility easements utilities, 
        public rights-of-way or other public purposes, and cable 
        television or other communications, through, over or under the 
        common elements,; grant easements, leases, or licenses to unit 
        owners for purposes authorized by the declaration; and, subject 
        to approval by resolution of unit owners other than declarant or 
        its affiliates at a meeting duly called, grant other public or 
        private easements, leases, and licenses through, over or under 
        the common elements; 
           (10) impose and receive any payments, fees, or charges for 
        the use, rental, or operation of the common elements, other than 
        limited common elements, and for services provided to unit 
        owners; 
           (11) impose charges for late payment of assessments and, 
        after notice and an opportunity to be heard, levy reasonable 
        fines for violations of the declaration, bylaws, and rules and 
        regulations of the association; 
           (12) impose reasonable charges for the review, preparation 
        and recordation of amendments to the declaration, resale 
        certificates required by section 515B.4-107, statements of 
        unpaid assessments, or furnishing copies of association records; 
           (13) provide for the indemnification of its officers and 
        directors, and maintain directors' and officers' liability 
        insurance; 
           (14) provide for reasonable procedures governing the 
        conduct of meetings and election of directors; 
           (15) exercise any other powers conferred by law, or by the 
        declaration, articles of incorporation or bylaws; and 
           (16) exercise any other powers necessary and proper for the 
        governance and operation of the association. 
           (b) Notwithstanding subsection (a) the declaration or 
        bylaws may not impose limitations on the power of the 
        association to deal with the declarant which are more 
        restrictive than the limitations imposed on the power of the 
        association to deal with other persons. 
           Sec. 23.  Minnesota Statutes 2004, section 515B.3-103, is 
        amended to read: 
           515B.3-103 [DUTY OF BOARD OF DIRECTORS, OFFICERS DURING, 
        AFTER AND DECLARANT CONTROL.] 
           (a) An association shall be governed by a board of 
        directors.  Except as expressly prohibited by the declaration, 
        the articles of incorporation, bylaws, subsection (b), or other 
        provisions of this chapter, the board may act in all instances 
        on behalf of the association.  In the performance of their 
        duties, the officers and directors are required to exercise (i) 
        if appointed by the declarant, the care required of fiduciaries 
        of the unit owners and (ii) if elected by the unit owners, the 
        care required of a director by section 302A.251 or 317A.251, as 
        applicable. 
           (b) The board may not act unilaterally to amend the 
        declaration, to terminate the common interest community, to 
        elect directors to the board, or to determine the 
        qualifications, powers and duties, or terms of office of 
        directors, but the board may fill vacancies in its membership 
        created other than by removal by the vote of the association 
        members for the unexpired portion of any term. 
           (c) Subject to subsection (d), The declaration may provide 
        for a period of declarant control of the association, during 
        which a declarant, or persons designated by the declarant, may 
        appoint and remove the officers and directors of the 
        association.  The maximum period of declarant control may extend 
        from begins on the date of the first conveyance of a unit to a 
        unit owner other than a declarant for a period not 
        exceeding creation of the common interest community and 
        terminates upon the earliest of the following events:  (i) five 
        years after the date of the first conveyance of a unit to a unit 
        owner other than a declarant in the case of a flexible common 
        interest community or three years in the case of any other 
        common interest community.  Regardless of any longer period 
        provided in the declaration or elsewhere, a period of declarant 
        control shall terminate upon the earlier of (i) surrender of 
        control by the declarant or (ii) 60 days after, (ii) the 
        declarant's voluntary surrender of control by giving written 
        notice to the unit owners pursuant to section 515B.1-115, or 
        (iii) the conveyance of 75 percent of the units to unit owners 
        other than a declarant. 
           (d) Not later than 60 days after conveyance of The board 
        shall cause a meeting of the unit owners to be called, as 
        follows: 
           (1) If the period of declarant control has terminated 
        pursuant to subsection (c), a meeting of the unit owners shall 
        be called and held within 60 days after said termination, at 
        which the board shall be elected by all unit owners, including 
        declarant, subject to the requirements of subsection (e). 
           (2) If 50 percent of the units that may be created to unit 
        owners other than a declarant or an affiliate of a declarant, a 
        meeting of the unit owners shall be held a declarant is 
        authorized by the declaration to create have been conveyed prior 
        to the termination of the declarant control period, a meeting of 
        the unit owners shall be called and held within 60 days 
        thereafter, at which not less than 33-1/3 percent of the members 
        of the board shall be elected by unit owners other than a 
        declarant or an affiliate of a declarant. 
           (e) Following the termination of any period of declarant 
        control, the unit owners shall elect the board.  All unit 
        owners, including the declarant and its affiliates, may cast the 
        votes allocated to any units owned by them.  The board shall 
        thereafter be subject to the following requirements. 
           (1) A majority of the directors shall be unit owners other 
        than a declarant or an affiliate of a declarant, or a natural 
        person designated by a unit owner that is not a natural person.  
        The remaining directors need not be unit owners unless required 
        by the articles of incorporation or bylaws. 
           (2) Subject to the requirements of subsection (1), the 
        articles of incorporation or bylaws may authorize (i) the 
        appointment or election of one director, who need not be a unit 
        owner, by a declarant or by a person or persons other than a 
        unit owner, (ii) classes of directors, and (iii) the election of 
        certain directors by unit owners of a certain class or classes 
        of units.  The articles of incorporation or bylaws shall not be 
        amended to change or terminate the authorization described in 
        (i) without the written consent of the declarant or other person 
        possessing the power to appoint or elect. 
           (3) Subject to the requirements of subsection (1), if 
        separate classes of directors are authorized under subsection 
        (2), the articles of incorporation or bylaws may authorize class 
        voting by classes of directors on specified issues affecting 
        only a certain class of units, or to protect the legitimate 
        interests of the class.  A person shall not use special class 
        voting to evade any limit imposed on declarants by this chapter. 
           (4) The board shall elect the officers.  The directors and 
        officers shall take office upon election. 
           (f) In determining whether the period of declarant control 
        has terminated under subsection (c), or whether unit owners 
        other than a declarant are entitled to elect members of the 
        board of directors under subsection (d), the percentage of the 
        units which has been conveyed shall be calculated based upon the 
        assumption that all units which the declarant has built or 
        reserved the right to build in the declaration are included in 
        the common interest community using as a numerator the number of 
        units conveyed and as a denominator the number of units subject 
        to the declaration plus the number of units which the declarant 
        is authorized by the declaration to create on any additional 
        real estate.  The percentages referred to in subsections (c) and 
        (d) shall be calculated without reference to units that are 
        auxiliary to other units, such as garage units or storage 
        units.  A person shall not use a master association or other 
        device to evade the requirements of this section. 
           (g) Except as otherwise provided in this subsection, 
        meetings of the board of directors must be open to the unit 
        owners.  To the extent practicable, the board shall give 
        reasonable notice to the unit owners of the date, time, and 
        place of a board meeting.  If the date, time, and place of 
        meetings are provided for in the declaration, articles, or 
        bylaws, announced at a previous meeting of the board, posted in 
        a location accessible to the unit owners and designated by the 
        board from time to time, or if an emergency requires immediate 
        consideration of a matter by the board, notice is not required.  
        "Notice" has the meaning given in section 317A.011, subdivision 
        14.  Meetings may be closed to discuss the following: 
           (1) personnel matters; 
           (2) pending or potential litigation, arbitration or other 
        potentially adversarial proceedings, between unit owners, 
        between the board or association and unit owners, or other 
        matters in which any unit owner may have an adversarial 
        interest, if the board determines that closing the meeting is 
        necessary to discuss strategy or to otherwise protect the 
        position of the board or association or the privacy of a unit 
        owner or occupant of a unit; or 
           (3) criminal activity arising within the common interest 
        community if the board determines that closing the meeting is 
        necessary to protect the privacy of the victim or that opening 
        the meeting would jeopardize investigation of the activity.  
           Nothing in this subsection imposes a duty on the board to 
        provide special facilities for meetings.  The failure to give 
        notice as required by this subsection shall not invalidate the 
        board meeting or any action taken at the meeting.  The minutes 
        of any part of a meeting that is closed under this subsection 
        may be kept confidential at the discretion of the board. 
           Sec. 24.  Minnesota Statutes 2004, section 515B.3-105, is 
        amended to read: 
           515B.3-105 [TERMINATION OF DECLARANT'S CONTRACTS, LEASES.] 
           (a) If entered into prior to expiration termination of the 
        period of declarant control pursuant to section 515B.3-103, (i) 
        any management contract, employment contract, or lease of 
        recreational facilities, units, or garages or other parking 
        facilities, (ii) any contract, lease, or license binding the 
        association, and to which a declarant or an affiliate of a 
        declarant is a party, or (iii) any contract, lease or license 
        binding the association or any unit owner other than the 
        declarant or an affiliate of the declarant which is not bona 
        fide or which was unconscionable to the unit owners at the time 
        entered into under the circumstances then prevailing, may be 
        terminated without penalty by the association at any time after 
        the expiration of declarant control upon not less than 90 days' 
        notice to the other party under the procedures described in this 
        section.  
           (b) If, during prior to expiration of the suspension period 
        described in section 515B.2-121, subsection (c), paragraph (3), 
        a contract, lease, or license of a type described in this 
        section subsection (a) is entered into by a person having 
        authority to appoint the directors of the master association and 
        is binding upon a the master association, then the master 
        association, and not any association, may terminate the 
        contract, lease, or license under the procedures described in 
        this section.  
           (c) Termination shall be upon no less than 90 days' notice. 
        Notice of termination shall be given by the association or 
        master association, as applicable, in accordance with section 
        515B.1-115; provided, that notice shall be effective only if 
        given within two years following the termination of the period 
        of declarant control or the suspension period described in 
        section 515B.2-121, subsection (c), paragraph (3), as applicable.
           (d) This section does not apply to (i): 
           (1) any lease the termination of which would terminate the 
        common interest community, (ii) a proprietary lease, or (iii); 
           (2) in the case of a cooperative, a mortgage or contract 
        for deed encumbering all real estate constituting the common 
        interest community. owned by the association, except that if the 
        mortgage or contract for deed contains a contractual obligation 
        involving a type of contract, lease, or license which may be 
        terminated pursuant to subsection (a) or (b), then that 
        contractual obligation may be terminated pursuant to subsection 
        (c); or 
           (3) an agreement between a declarant or an affiliate of a 
        declarant, or a person having authority pursuant to section 
        515B.2-121(c)(3) to appoint the directors of the master 
        association, and any governmental entity, if such agreement is 
        necessary to obtain governmental approvals, provide financing 
        under any type of government program, or provide for 
        governmentally required access, conservation, drainage, or 
        utilities. 
           Sec. 25.  Minnesota Statutes 2004, section 515B.3-106, is 
        amended to read: 
           515B.3-106 [BYLAWS; ANNUAL REPORT.] 
           (a) A common interest community shall have bylaws which 
        comply with this chapter and the requirements of the statute 
        under which the association is incorporated.  The bylaws and any 
        amendments may be recorded, but need not be recorded to be 
        effective unless so provided in the bylaws. 
           (b) The bylaws shall provide that, in addition to any 
        statutory requirements: 
           (1) A meeting of the members shall be held at least once 
        each year, and a specified officer of the association shall give 
        notice of the meeting as provided in section 515B.3-108. 
           (2) An annual report shall be prepared by the association 
        and a copy of the report shall be provided to each unit owner at 
        or prior to the annual meeting. 
           (c) The annual report shall contain at a minimum: 
           (1) a statement of any capital expenditures in excess of 
        two percent of the current budget or $5,000, whichever is 
        greater, approved by the association for the current fiscal year 
        or succeeding two fiscal years; 
           (2) a statement of the balance in any reserve or 
        replacement fund; 
           (3) a copy of the statement of revenues and expenses for 
        the association's last fiscal year, and a balance sheet as of 
        the end of said fiscal year; 
           (4) a statement of the status of any pending litigation or 
        judgments to which the association is a party; 
           (5) a detailed description of the insurance coverage 
        provided by the association including a statement as to which, 
        if any, of the items referred to in section 515B.3-113, 
        subsection (b), are insured by the association; and 
           (6) a statement of the total past due assessments on all 
        units, current as of not more than 60 days prior to the date of 
        the meeting. 
           Sec. 26.  Minnesota Statutes 2004, section 515B.3-110, is 
        amended to read: 
           515B.3-110 [VOTING; PROXIES.] 
           (a) At any meeting of the association an owner or the 
        holder of the owner's proxy shall be entitled to cast the vote 
        which is allocated to the unit.  If there is more than one owner 
        of a unit, only one of the owners may cast the vote.  If the 
        owners of a unit fail to agree and notify the association as to 
        who shall cast the vote, the vote shall not be cast.  Any 
        provision in the articles of incorporation, bylaws, declaration, 
        or other document restricting a unit owner's right to vote, or 
        affecting quorum requirements, by reason of nonpayment of 
        assessments, or a purported violation of any provision of the 
        documents governing the common interest community, shall be void.
           (b) If permitted by the articles or bylaws, votes allocated 
        to a unit may be cast pursuant to a proxy executed by the unit 
        owner entitled to cast the vote for that unit.  The board may 
        specify the form of proxy and proxy rules, consistent with law. 
           (c) The entire vote on any single issue (except the 
        election of directors), may be by mailed ballots, subject to (i) 
        any prohibition or requirement contained in the articles of 
        incorporation, bylaws, or declaration and (ii) any requirements 
        of the statute under which the association is created.  Such a 
        vote shall have the force and effect of a vote taken at a 
        meeting; provided, that the total votes cast are at least equal 
        to the votes required for a quorum.  The board shall set a 
        voting period within which the ballots must be returned, which 
        period shall be not less than ten nor more than 30 days after 
        the date of mailing or hand delivery of the ballots to the 
        owners.  The board of directors shall provide written notice of 
        the results of the vote to the members within 30 days after the 
        expiration of the voting period.  All requirements in this 
        chapter, the declaration or the bylaws for a meeting of the 
        members, or being present in person, shall be deemed satisfied 
        by a vote taken by mail in compliance with the requirements of 
        this section. 
           (d) The articles of incorporation or bylaws may authorize 
        class voting by unit owners for directors or on specified issues 
        affecting the class.  Class voting may only be used to address 
        operational, physical, or administrative differences within the 
        common interest community.  A declarant shall not use class 
        voting to evade any limit imposed on declarants by this chapter 
        and units shall not constitute a class because they are owned by 
        a declarant.  
           (e) The declaration or bylaws may provide that votes on 
        specified matters affecting the common interest community be 
        cast by lessees or secured parties rather than unit owners; 
        provided that (i) the provisions of subsections (a), (b), and (c)
        apply to those persons as if they were unit owners; (ii) unit 
        owners who have so delegated their votes to other persons may 
        not cast votes on those specified matters; (iii) lessees or 
        secured parties are entitled to notice of meetings, access to 
        records, and other rights respecting those matters as if they 
        were unit owners, and (iv) the lessee or secured party has filed 
        satisfactory evidence of its interest with the secretary of the 
        association prior to the meeting.  Unit owners must also be 
        given notice, in the manner provided in section 515B.3-108(b), 
        of meetings at which lessees or secured parties are entitled to 
        vote. 
           (f) No votes allocated to a unit owned by the association 
        may be cast nor counted toward a quorum. 
           Sec. 27.  Minnesota Statutes 2004, section 515B.3-112, is 
        amended to read: 
           515B.3-112 [CONVEYANCE OR ENCUMBRANCE OF, OR CREATION OF 
        SECURITY INTERESTS IN, COMMON ELEMENTS.] 
           (a) In a condominium or planned community, unless the 
        declaration provides otherwise, portions of the common elements 
        may be conveyed or subjected to a security interest by the 
        association if persons entitled to cast at least 67 percent of 
        the votes in the association, including 67 percent of the votes 
        allocated to units not owned by a declarant, or any larger 
        percentage the declaration specifies, approve that action in 
        writing or at a meeting; but all unit owners of units to which 
        any limited common element is allocated must agree in order to 
        convey that limited common element or subject it to a security 
        interest.  The declaration may specify a smaller percentage only 
        if all of the units are restricted to nonresidential use. 
           (b) In a cooperative, unless the declaration provides 
        otherwise, part of a cooperative may be conveyed, or all or a 
        part subjected to a security interest, by the association if 
        persons entitled to cast at least 67 percent of the votes in the 
        association, including 67 percent of the votes allocated to 
        units in which the declarant has no interest, or any larger 
        percentage the declaration specifies, approves that action in 
        writing or at a meeting.  If fewer than all of the units or 
        limited common elements are to be conveyed or subjected to a 
        security interest, then all unit owners of those units, or the 
        units to which those limited common elements are allocated, must 
        agree in order to convey those units or limited common elements 
        or subject them to a security interest.  The declaration may 
        specify a smaller percentage only if all of the units are 
        restricted to nonresidential use.  Any purported conveyance or 
        other voluntary transfer of an entire cooperative is void, 
        unless made pursuant to section 515B.2-119. 
           (c) The association, on behalf of the unit owners, may 
        contract to convey or encumber an interest in the common 
        elements of a common interest community pursuant to this 
        subsection, subject to the required approval.  After the 
        approval has been obtained, the association shall have a power 
        of attorney coupled with an interest to effect the conveyance or 
        encumbrance on behalf of all unit owners in the common interest 
        community, including the power to execute deeds, mortgages, or 
        other instruments of conveyance or security.  The instrument 
        conveying or creating the interest in the common interest 
        community shall be recorded and shall include as exhibits (i) an 
        affidavit of the secretary of the association certifying that 
        the approval required by this section has been obtained and (ii) 
        a schedule of the names of all unit owners and units in the 
        common interest community as of the date of the approval. 
           (d) Except as provided in section 515B.3-102(a)(9), Unless 
        made pursuant to this section, any purported conveyance, 
        encumbrance, creation of a security interest in or other 
        voluntary transfer of any interest in the common elements, or of 
        any part of a cooperative, is void.  The grant of an easement, 
        lease, or license pursuant to section 515B.3-102(a)(9) is not 
        subject to this section. 
           (e) In the case of a conveyance involving a condominium, a 
        planned community utilizing a CIC plat complying with section 
        515B.2-110(c), or a cooperative in which the unit owners' 
        interests are characterized as real estate, the association 
        shall record, simultaneously with the recording of the 
        instrument of conveyance, an amended CIC plat showing the real 
        estate constituting the common interest community exclusive of 
        the real estate conveyed.  In all common interest communities, 
        upon recording of the instrument of conveyance, the declaration, 
        and all rights and obligations arising therefrom, shall be 
        deemed released and terminated as to the real estate conveyed. 
           (f) A conveyance or encumbrance of common elements, or of a 
        cooperative, pursuant to this section shall not deprive any unit 
        of its rights of support, reasonable access or utility services. 
           (g) Except as provided in subsection (a), or unless the 
        declaration otherwise provides, a conveyance or encumbrance of 
        common elements pursuant to this section does not affect the 
        priority or validity of preexisting encumbrances. 
           (h) Any proceeds of the conveyance or creation of a 
        security interest under this section are an asset of the 
        association. 
           (i) This section shall not apply to any conveyance or 
        encumbrance of any interest in a proprietary lease. 
           Sec. 28.  Minnesota Statutes 2004, section 515B.3-113, is 
        amended to read: 
           515B.3-113 [INSURANCE.] 
           (a) Commencing not later than the time of the first 
        conveyance of a unit to a unit owner other than a declarant, the 
        association shall maintain, to the extent reasonably available: 
           (1) subject to subsection (b), property insurance (i) on 
        the common elements and, in a planned community, also on 
        property that must become common elements, (ii) for broad form 
        covered causes of loss, and (iii) in a total amount of not less 
        than the full insurable replacement cost of the insured 
        property, less deductibles, at the time the insurance is 
        purchased and at each renewal date, exclusive of items normally 
        excluded from property policies; and 
           (2) commercial general liability insurance against claims 
        and liabilities arising in connection with the ownership, 
        existence, use or management of the property in an amount, if 
        any, specified by the common interest community instruments or 
        otherwise deemed sufficient in the judgment of the board, 
        insuring the board, the association, the management agent, and 
        their respective employees, agents and all persons acting as 
        agents.  The declarant shall be included as an additional 
        insured in its capacity as a unit owner or board member.  The 
        unit owners shall be included as additional insureds but only 
        for claims and liabilities arising in connection with the 
        ownership, existence, use or management of the common elements.  
        The insurance shall cover claims of one or more insured parties 
        against other insured parties. 
           (b) In the case of a common interest community that 
        contains units, or structures within units, sharing or having 
        contiguous walls, siding or roofs, the insurance maintained 
        under subsection (a)(1) shall include those units, or structures 
        within those units, and the common elements.  The insurance need 
        not cover the following items within the units:  (i) ceiling or 
        wall finishing materials, (ii) floor coverings, (iii) cabinetry, 
        (iv) finished millwork, (v) electrical or plumbing fixtures 
        serving a single unit, (vi) built-in appliances, or (vii) other 
        improvements and betterments, regardless of when installed.  If 
        any improvements and betterments are covered, any increased cost 
        may be assessed by the association against the units affected.  
        The association may, in the case of a claim for damage to a unit 
        or units, (i) pay the deductible amount as a common expense, 
        (ii) assess the deductible amount against the units affected in 
        any reasonable manner, or (iii) require the unit owners of the 
        units affected to pay the deductible amount directly. 
           (c) If the insurance described in subsections (a) and (b) 
        is not reasonably available, the association shall promptly 
        cause notice of that fact to be hand delivered or sent prepaid 
        by United States mail to all unit owners.  The declaration may 
        require the association to carry any other insurance, and the 
        association in any event may carry any other insurance it 
        considers appropriate to protect the association, the unit 
        owners or officers, directors or agents of the association. 
           (d) Insurance policies carried pursuant to subsections (a) 
        and (b) shall provide that: 
           (1) each unit owner and secured party is an insured person 
        under the policy with respect to liability arising out of the 
        unit owner's interest in the common elements or membership in 
        the association; 
           (2) the insurer waives its right to subrogation under the 
        policy against any unit owner of the condominium or members of 
        the unit owner's household and against the association and 
        members of the board of directors; 
           (3) no act or omission by any unit owner or secured party, 
        unless acting within the scope of authority on behalf of the 
        association, shall void the policy or be a condition to recovery 
        under the policy; and 
           (4) if at the time of a loss under the policy there is 
        other insurance in the name of a unit owner covering the same 
        property covered by the policy, the association's policy is 
        primary insurance. 
           (e) Any loss covered by the property policy under 
        subsection (a)(1) shall be adjusted by and with the 
        association.  The insurance proceeds for that loss shall be 
        payable to the association, or to an insurance trustee 
        designated by the association for that purpose.  The insurance 
        trustee or the association shall hold any insurance proceeds in 
        trust for unit owners and secured parties as their interests may 
        appear.  The proceeds shall be disbursed first for the repair or 
        restoration of the damaged common elements and units.  Unit 
        owners and secured parties are not entitled to receive any 
        portion of the proceeds unless If there is a surplus of proceeds 
        after the common elements and units have been completely 
        repaired or restored or the common interest community is 
        terminated, the board of directors may retain the surplus for 
        use by the association or distribute the surplus among the 
        owners on an equitable basis as determined by the board. 
           (f) Unit owners may obtain insurance for personal benefit 
        in addition to insurance carried by the association. 
           (g) An insurer that has issued an insurance policy under 
        this section shall issue certificates or memoranda of insurance, 
        upon request, to any unit owner or secured party.  The insurance 
        may not be canceled until 60 days after notice of the proposed 
        cancellation has been mailed to the association, each unit owner 
        and each secured party for an obligation to whom certificates of 
        insurance have been issued. 
           (h) Any portion of the common interest community which is 
        damaged or destroyed as the result of a loss covered by the 
        association's insurance shall be promptly repaired or replaced 
        by the association unless (i) the common interest community is 
        terminated and the association votes not to repair or replace 
        all or part thereof, (ii) repair or replacement would be illegal 
        under any state or local health or safety statute or ordinance, 
        or (iii) 80 percent of the unit owners, including every unit 
        owner and holder of a first mortgage on a unit or assigned 
        limited common element which will not be rebuilt, vote not to 
        rebuild.  Subject to subsection (b), the cost of repair or 
        replacement of the common elements in excess of insurance 
        proceeds and reserves shall be paid as a common expense, and the 
        cost of repair of a unit in excess of insurance proceeds shall 
        be paid by the respective unit owner. 
           (i) If less than the entire common interest community is 
        repaired or replaced, (i) the insurance proceeds attributable to 
        the damaged common elements shall be used to restore the damaged 
        area to a condition compatible with the remainder of the common 
        interest community, (ii) the insurance proceeds attributable to 
        units and limited common elements which are not rebuilt shall be 
        distributed to the owners of those units, including units to 
        which the limited common elements were assigned, and the secured 
        parties of those units, as their interests may appear, and (iii) 
        the remainder of the proceeds shall be distributed to all the 
        unit owners and secured parties as their interests may appear in 
        proportion to their common element interest in the case of a 
        condominium or in proportion to their common expense liability 
        in the case of a planned community or cooperative. 
           (j) If the unit owners and holders of first mortgages vote 
        not to rebuild a unit, that unit's entire common element 
        interest, votes in the association, and common expense liability 
        are automatically reallocated upon the vote as if the unit had 
        been condemned under section 515B.1-107, and the association 
        shall promptly prepare, execute and record an amendment to the 
        declaration reflecting the reallocations.  Notwithstanding the 
        provisions of this subsection, if the common interest community 
        is terminated, insurance proceeds not used for repair or 
        replacement shall be distributed in the same manner as sales 
        proceeds pursuant to section 515B.2-119. 
           (k) The provisions of this section may be varied or waived 
        in the case of a common interest community in which all units 
        are restricted to nonresidential use. 
           Sec. 29.  Minnesota Statutes 2004, section 515B.3-114, is 
        amended to read: 
           515B.3-114 [RESERVES; SURPLUS FUNDS.] 
           (a) The annual budgets of the association shall provide 
        from year to year, on a cumulative basis, for adequate reserve 
        funds to cover the replacement of those parts of the 
        common elements and limited common elements interest community 
        which the association is obligated to maintain, repair, or 
        replace.  These reserve requirements shall not apply to a common 
        interest community which is restricted to nonresidential use.  
           (b) Unless the declaration provides otherwise, any surplus 
        funds that the association has remaining after payment of or 
        provision for common expenses and reserves shall be (i) credited 
        to the unit owners to reduce their future common expense 
        assessments or (ii) credited to reserves, or any combination 
        thereof, as determined by the board of directors. 
           Sec. 30.  Minnesota Statutes 2004, section 515B.3-115, is 
        amended to read: 
           515B.3-115 [ASSESSMENTS FOR COMMON EXPENSES.] 
           (a) The obligation of a unit owner to pay common expense 
        assessments shall be as follows: 
           (1) If a common expense assessment has not been levied, the 
        declarant shall pay all accrued operating expenses of the common 
        interest community, and shall fund the replacement reserve 
        component of the common expenses as required by subsection (b).  
           (2) If a common expense assessment has been levied, all 
        unit owners including the declarant shall pay the assessments 
        allocated to their units, subject to subsection (b). the 
        following: 
           (i) If the declaration so provides, a declarant's 
        liability, and the assessment lien, for the common expense 
        assessments, exclusive of replacement reserves, on any unit 
        owned by the declarant may be limited to 25 percent or more of 
        any assessment, exclusive of replacement reserves, until the 
        unit or any building located in the unit is substantially 
        completed.  Substantial completion shall be evidenced by a 
        certificate of occupancy in any jurisdiction that issues the 
        certificate. 
           (ii) If the declaration provides for a reduced assessment 
        pursuant to paragraph (2)(i), the declarant shall be obligated, 
        within 60 days following the termination of the period of the 
        declarant control, to make up any operating deficit incurred by 
        the association during the period of declarant control. 
           (3) Notwithstanding subsections (a)(1), (a)(2), and (b), if 
        the association maintains the exteriors of the buildings 
        constituting or contained within the units, that part of any 
        assessment that is allocated to replacement reserves referred to 
        in section 515B.3-114 shall be fully levied against a unit, 
        including any unit owned by a declarant, on the earlier of 
        substantial completion of the exterior of (i) the building 
        containing the unit or (ii) any building located within the unit.
           (b) Subject to subsection (a)(3), if the declaration so 
        provides, a declarant's liability, and the assessment lien, for 
        assessments, other than replacement reserves, on any unit owned 
        by the declarant may be limited to 25 percent or any greater 
        percentage of any assessment levied, until the unit or any 
        building located in it The replacement reserve component of the 
        common expenses shall be funded for each unit in accordance with 
        the projected annual budget required by section 515B.4-102(23); 
        provided, that the funding of replacement reserves with respect 
        to a unit shall commence no later than the date that the unit or 
        any building located within the unit boundaries is substantially 
        completed.  Substantial completion shall be evidenced by a 
        certificate of occupancy in any jurisdiction that issues the 
        certificate. 
           (c) After an assessment has been levied by the association, 
        assessments shall be levied at least annually, based upon a 
        budget approved at least annually by the association. 
           (d) Except as modified by subsections (a)(1) and (2), (e), 
        (f), and (g), all common expenses shall be assessed against all 
        the units in accordance with the allocations established by the 
        declaration pursuant to section 515B.2-108. 
           (e) Unless otherwise required by the declaration: 
           (1) any common expense associated with the maintenance, 
        repair, or replacement of a limited common element shall be 
        assessed against the units to which that limited common element 
        is assigned, equally, or in any other proportion the declaration 
        provides; 
           (2) any common expense or portion thereof benefiting fewer 
        than all of the units may be assessed exclusively against the 
        units benefited, equally, or in any other proportion the 
        declaration provides; 
           (3) the costs of insurance may be assessed in proportion to 
        risk or coverage, and the costs of utilities may be assessed in 
        proportion to usage; 
           (4) reasonable attorneys fees and costs incurred by the 
        association in connection with (i) the collection of assessments 
        and, (ii) the enforcement of this chapter, the articles, bylaws, 
        declaration, or rules and regulations, against a unit owner, may 
        be assessed against the unit owner's unit; and 
           (5) fees, charges, late charges, fines and interest may be 
        assessed as provided in section 515B.3-116(a). 
           (f) Assessments levied under section 515B.3-116 to pay a 
        judgment against the association may be levied only against the 
        units in the common interest community at the time the judgment 
        was entered, in proportion to their common expense liabilities. 
           (g) If any damage to the common elements or another unit is 
        caused by the act or omission of any unit owner, or occupant of 
        a unit, or their invitees, the association may assess the costs 
        of repairing the damage exclusively against the unit owner's 
        unit to the extent not covered by insurance. 
           (h) Subject to any shorter period specified by the 
        declaration or bylaws, if any installment of an assessment 
        becomes more than 60 days past due, then the association may, 
        upon ten days' written notice to the unit owner, declare the 
        entire amount of the assessment immediately due and payable in 
        full. 
           (i) If common expense liabilities are reallocated for any 
        purpose authorized by this chapter, common expense assessments 
        and any installment thereof not yet due shall be recalculated in 
        accordance with the reallocated common expense liabilities. 
           (j) An assessment against fewer than all of the units must 
        be levied within three years after the event or circumstances 
        forming the basis for the assessment, or shall be barred. 
           Sec. 31.  Minnesota Statutes 2004, section 515B.3-116, is 
        amended to read: 
           515B.3-116 [LIEN FOR ASSESSMENTS.] 
           (a) The association has a lien on a unit for any assessment 
        levied against that unit from the time the assessment becomes 
        due.  If an assessment is payable in installments, the full 
        amount of the assessment is a lien from the time the first 
        installment thereof becomes due.  Unless the declaration 
        otherwise provides, fees, charges, late charges, fines and 
        interest charges pursuant to section 515B.3-102(a)(10), (11) and 
        (12) are liens, and are enforceable as assessments, under this 
        section.  
           (b) A lien under this section is prior to all other liens 
        and encumbrances on a unit except (i) liens and encumbrances 
        recorded before the declaration and, in a cooperative, liens and 
        encumbrances which the association creates, assumes, or takes 
        subject to, (ii) any first mortgage encumbering the fee simple 
        interest in the unit, or, in a cooperative, any first security 
        interest encumbering only the unit owner's interest in the unit, 
        and (iii) liens for real estate taxes and other governmental 
        assessments or charges against the unit, and (iv) a master 
        association lien under section 515B.2-121(i).  If a first 
        mortgage on a unit is foreclosed, the first mortgage was 
        recorded after June 1, 1994, and no owner redeems during the 
        owner's period of redemption provided by chapter 580, 581, or 
        582, the holder of the sheriff's certificate of sale from the 
        foreclosure of the first mortgage shall take title to the unit 
        subject to a lien in favor of the association for unpaid 
        assessments for common expenses levied pursuant to section 
        515B.3-115(a), (e)(1) to (3), (f), and (i) which became due, 
        without acceleration, during the six months immediately 
        preceding the first day following the end of the owner's period 
        of redemption.  If a first security interest encumbering a unit 
        owner's interest in a cooperative unit which is personal 
        property is foreclosed, the secured party or the purchaser at 
        the sale shall take title to the unit subject to unpaid 
        assessments for common expenses levied pursuant to section 
        515B.3-115(a), (e)(1) to (3), (f), and (i) which became due, 
        without acceleration, during the six months immediately 
        preceding the first day following either the disposition date 
        pursuant to section 336.9-610 or the date on which the 
        obligation of the unit owner is discharged pursuant to section 
        336.9-622.  This subsection shall not affect the priority of 
        mechanics' liens. 
           (c) Recording of the declaration constitutes record notice 
        and perfection of any lien under this section, and no further 
        recordation of any notice of or claim for the lien is required. 
           (d) Proceedings to enforce an assessment lien shall be 
        instituted within three years after the last installment of the 
        assessment becomes payable, or shall be barred. 
           (e) The unit owner of a unit at the time an assessment is 
        due shall be personally liable to the association for payment of 
        the assessment levied against the unit.  If there are multiple 
        owners of the unit, they shall be jointly and severally liable. 
           (f) This section does not prohibit actions to recover sums 
        for which subsection (a) creates a lien nor prohibit an 
        association from taking a deed in lieu of foreclosure.  The 
        commencement of an action to recover the sums is not an election 
        of remedies if it is dismissed before commencement of 
        foreclosure of the lien provided for by this section.  
           (g) The association shall furnish to a unit owner or the 
        owner's authorized agent upon written request of the unit owner 
        or the authorized agent a statement setting forth the amount of 
        unpaid assessments currently levied against the owner's unit.  
        If the unit owner's interest is real estate, the statement shall 
        be in recordable form.  The statement shall be furnished within 
        ten business days after receipt of the request and is binding on 
        the association and every unit owner. 
           (h) The association's lien may be foreclosed as provided in 
        this subsection. 
           (1) In a condominium or planned community, the 
        association's lien may be foreclosed in a like manner as a 
        mortgage containing a power of sale pursuant to chapter 580, or 
        by action pursuant to chapter 581.  The association shall have a 
        power of sale to foreclose the lien pursuant to chapter 580.  
           (2) In a cooperative whose unit owners' interests are real 
        estate, the association's lien shall be foreclosed in a like 
        manner as a mortgage on real estate as provided in paragraph (1).
           (3) In a cooperative whose unit owners' interests in the 
        units are personal property, the association's lien shall be 
        foreclosed in a like manner as a security interest under article 
        9 of chapter 336.  In any disposition pursuant to section 
        336.9-610 or retention pursuant to sections 336.9-620 to 
        336.9-622, the rights of the parties shall be the same as those 
        provided by law, except (i) notice of sale, disposition, or 
        retention shall be served on the unit owner 90 days prior to 
        sale, disposition, or retention, (ii) the association shall be 
        entitled to its reasonable costs and attorney fees not exceeding 
        the amount provided by section 582.01, subdivision 1a, (iii) the 
        amount of the association's lien shall be deemed to be adequate 
        consideration for the unit subject to disposition or retention, 
        notwithstanding the value of the unit, and (iv) the notice of 
        sale, disposition, or retention shall contain the following 
        statement in capital letters with the name of the association or 
        secured party filled in: 
           "THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of 
        association or secured party) HAS BEGUN PROCEEDINGS UNDER 
        MINNESOTA STATUTES, CHAPTER 515B, TO FORECLOSE ON YOUR INTEREST 
        IN YOUR UNIT FOR THE REASON SPECIFIED IN THIS NOTICE.  YOUR 
        INTEREST IN YOUR UNIT WILL TERMINATE 90 DAYS AFTER SERVICE OF 
        THIS NOTICE ON YOU UNLESS BEFORE THEN: 
           (a) THE PERSON AUTHORIZED BY (fill in the name of 
        association or secured party) AND DESCRIBED IN THIS NOTICE TO 
        RECEIVE PAYMENTS RECEIVES FROM YOU: 
           (1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS 
           (2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS 
           (3) $500 TO APPLY TO ATTORNEYS FEES ACTUALLY EXPENDED OR 
        INCURRED; PLUS 
           (4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO 
        (fill in name of association or secured party) AFTER THE DATE OF 
        THIS NOTICE; OR 
           (b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE 
        FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL YOUR 
        CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR 
        SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND 
        GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES. 
           IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS 
        WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP 
        RIGHTS IN YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU 
        WILL LOSE ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL 
        LOSE YOUR RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR 
        RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND 
        YOU WILL BE EVICTED.  IF YOU HAVE ANY QUESTIONS ABOUT THIS 
        NOTICE, CONTACT AN ATTORNEY IMMEDIATELY." 
           (4) In any foreclosure pursuant to chapter 580, 581, or 
        582, the rights of the parties shall be the same as those 
        provided by law, except (i) the period of redemption for unit 
        owners shall be six months from the date of sale or a lesser 
        period authorized by law, (ii) in a foreclosure by advertisement 
        under chapter 580, the foreclosing party shall be entitled to 
        costs and disbursements of foreclosure and attorneys fees 
        authorized by the declaration or bylaws, notwithstanding the 
        provisions of section 582.01, subdivisions 1 and 1a, (iii) in a 
        foreclosure by action under chapter 581, the foreclosing party 
        shall be entitled to costs and disbursements of foreclosure and 
        attorneys fees as the court shall determine, and (iv) the amount 
        of the association's lien shall be deemed to be adequate 
        consideration for the unit subject to foreclosure, 
        notwithstanding the value of the unit. 
           (i) If a holder of a sheriff's certificate of sale, prior 
        to the expiration of the period of redemption, pays any past due 
        or current assessments, or any other charges lienable as 
        assessments, with respect to the unit described in the sheriff's 
        certificate, then the amount paid shall be a part of the sum 
        required to be paid to redeem under section 582.03. 
           (j) In a cooperative, following foreclosure if the unit 
        owner fails to redeem before the expiration of the redemption 
        period in a foreclosure of the association's assessment lien, 
        the association may bring an action for eviction against the 
        unit owner and any persons in possession of the unit, and in 
        that case section 504B.291 shall not apply. 
           (k) An association may assign its lien rights in the same 
        manner as any other secured party. 
           Sec. 32.  Minnesota Statutes 2004, section 515B.3-117, is 
        amended to read: 
           515B.3-117 [OTHER LIENS.] 
           (a) Except in a cooperative and except as otherwise 
        provided in this chapter or in a security instrument, an 
        individual unit owner may have the unit owner's unit released 
        from a lien if the unit owner pays the lienholder the portion of 
        the amount which the lien secures that is attributable to the 
        unit.  Upon the receipt of payment, the lienholder shall 
        promptly deliver to the unit owner a recordable partial 
        satisfaction and release of lien releasing the unit from the 
        lien.  The release shall be deemed to include a release of any 
        rights in the common elements appurtenant to the unit.  The 
        portion of the amount which a lien secures that is attributable 
        to the unit shall be equal to the total amount which the lien 
        secures multiplied by a percentage calculated by dividing the 
        common expense liability attributable to the unit by the common 
        expense liability attributable to all units against which the 
        lien has been recorded, or in the case of a lien under 
        subsection (b), the units against which the lien is permitted or 
        required to be recorded.  At the request of a lien claimant or 
        unit owners, the association shall provide a written statement 
        of the percentage of common expense liability attributable to 
        all units.  After a unit owner's payment pursuant to this 
        section, the association may not assess the unit for any common 
        expense incurred thereafter in connection with the satisfaction 
        or defense against the lien. 
           (b) Labor performed or materials furnished for the 
        improvement of a unit shall be the basis for the recording of a 
        lien against that unit pursuant to the provisions of chapter 514 
        but shall not be the basis for the recording of a lien against 
        the common elements.  Labor performed or materials furnished for 
        the improvement of common elements, for which a lien may be 
        recorded under chapter 514, if duly authorized by the 
        association, shall be deemed to be performed or furnished with 
        the express consent of each unit owner, and shall be perfected 
        by recording a lien against all the units in the common interest 
        community pursuant to the provisions of chapter 514, but shall 
        not be the basis for the recording of a lien against the common 
        elements except in the case of a condominium on registered land, 
        in which case a lien must be filed pursuant to section 508.351, 
        subdivision 3, or 508A.351, subdivision 3.  Where a lien is 
        recorded against the units for labor performed or material 
        furnished for the improvement of common elements, the 
        association shall be deemed to be the authorized agent of the 
        unit owners for purposes of receiving the notices required under 
        sections 514.011 and 514.08, subdivision 1, clause (2). 
           (c) A security interest in a cooperative whose unit owners' 
        interests in the units are personal property shall be perfected 
        by recording a financing statement in the UCC filing section of 
        the office of the recording officer for the county in which the 
        unit is located central filing system operated by the Office of 
        the Secretary of State.  In any disposition by a secured party 
        pursuant to section 336.9-610 or retention pursuant to sections 
        336.9-620 to 336.9-622, the rights of the parties shall be the 
        same as those provided by law, subject to the exceptions and 
        requirements set forth in section 515B.3-116(h)(3), and except 
        that the unit owner has the right to reinstate the debt owing to 
        the secured party by paying to the secured party, prior to the 
        effective date of the disposition or retention, the amount which 
        would be required to reinstate the debt under section 580.30 if 
        the unit were wholly real estate. 
           Sec. 33.  Minnesota Statutes 2004, section 515B.3-120, is 
        amended to read: 
           515B.3-120 [DECLARANT DUTIES; TURNOVER OF RECORDS.] 
           (a) During any period of declarant control pursuant to 
        section 515B.3-103(c), declarant and any of its representatives 
        who are acting as officers or directors of the association shall:
           (1) cause the association to be operated and administered 
        in accordance with its articles of incorporation and bylaws, the 
        declaration and applicable law; 
           (2) be subject to all fiduciary obligations and obligations 
        of good faith applicable to any persons serving a corporation in 
        that capacity; 
           (3) cause the association's funds to be maintained in a 
        separate bank account or accounts solely in the association's 
        name, from and after the date of creation of the association; 
        and 
           (4) cause the association to maintain complete and accurate 
        records in compliance with section 515B.3-118. 
           (b) At such time as any period of declarant control 
        terminates, declarant shall cause to be delivered to the board 
        elected by the unit owners exclusive control of all funds of the 
        association, all contracts and agreements to which are binding 
        on the association was or is a party, all corporate records of 
        the association including financial records, copies of all CIC 
        plats and supplementary CIC plats, personal property owned or 
        represented to be owned by the association, assignments of all 
        declarant's rights and interests under the warranties if not in 
        the name of the association, and, to the extent they are in the 
        control or possession of the declarant, copies of all plans and 
        specifications in its control or possession relating to the 
        common interest community buildings and related 
        improvements which are part of the common elements, and 
        operating manuals and warranty materials relating to any 
        equipment or personal property utilized in the operation of the 
        common interest community.  The declarant's obligation to turn 
        over the foregoing items shall continue to include additional 
        new or changed items in its possession or control. 
           (c) A declarant in control person entitled to appoint the 
        directors of a master association pursuant to section 
        515B.2-121(c)(3), and the master association's officers and 
        directors, shall be subject to the same duties and obligations 
        with respect to the master association as are described in 
        subsections (a), and (b) and (c), to the extent 
        applicable.  The period of declarant control of the master 
        association shall terminate as provided in section 
        515B.2-121(f).  A master association may not be used to 
        circumvent or avoid any obligation or restriction imposed on a 
        declarant or its affiliates by this chapter. 
           Sec. 34.  Minnesota Statutes 2004, section 515B.4-101, is 
        amended to read: 
           515B.4-101 [APPLICABILITY; DELIVERY OF DISCLOSURE 
        STATEMENT.] 
           (a) Sections 515B.4-101 through 515B.4-118 apply to all 
        units subject to this chapter, except as provided in subsection 
        (c) or as modified or waived by written agreement of purchasers 
        of a unit which is restricted to nonresidential use. 
           (b) Subject to subsections (a) and (c), a declarant who 
        offers a unit to a purchaser shall deliver to the purchaser a 
        current disclosure statement which complies with the 
        requirements of section 515B.4-102.  The disclosure statement 
        shall include any material amendments to the disclosure 
        statement made prior to the conveyance of the unit to the 
        purchaser.  The declarant shall be liable to the purchaser to 
        whom it delivered the disclosure statement for any false or 
        misleading statement set forth therein or for any omission of a 
        material fact therefrom. 
           (c) Neither a disclosure statement nor a resale disclosure 
        certificate need be prepared or delivered in the case of: 
           (1) a gratuitous transfer; 
           (2) a transfer pursuant to a court order; 
           (3) a transfer to a government or governmental agency; 
           (4) a transfer to a secured party by foreclosure or deed in 
        lieu of foreclosure; 
           (5) an option to purchase a unit, until exercised; 
           (6) a transfer to a person who "controls" or is "controlled 
        by," the grantor as those terms are defined with respect to a 
        declarant under section 515B.1-103(2); 
           (7) a transfer by inheritance; 
           (8) a transfer of special declarant rights under section 
        515B.3-104; or 
           (9) a transfer in connection with a change of form of 
        common interest community under section 515B.2-123. 
           (d) A purchase agreement for a unit shall contain the 
        following notice:  "The following notice is required by 
        Minnesota Statutes.  The purchaser is entitled to receive a 
        disclosure statement or resale disclosure certificate, as 
        applicable.  The disclosure statement or resale disclosure 
        certificate contains important information regarding the common 
        interest community and the purchaser's cancellation rights." 
           (e) A purchase agreement for the sale, to the initial 
        occupant, of a platted lot or other parcel of real estate (i) 
        which is subject to a master declaration, (ii) which is intended 
        for residential occupancy, and (iii) which does not and is not 
        intended to constitute a unit, shall contain the following 
        notice:  "The following notice is required by Minnesota 
        Statutes:  The real estate to be conveyed under this agreement 
        is or will be subject to a master association as defined in 
        Minnesota Statutes, chapter 515B.  The master association is 
        obligated to provide to the purchaser, pursuant to Minnesota 
        Statutes, section 515B.4-102(c), upon the purchaser's request, a 
        statement containing the information required by Minnesota 
        Statutes, section 515B.4-102(a)(20), with respect to the master 
        association, prior to the time that the purchaser signs a 
        purchase agreement for the real estate.  The statement contains 
        important information regarding the master association and the 
        purchaser's obligations thereunder."  A claim by a purchaser 
        based upon a failure to include the foregoing notice in a 
        purchase agreement: 
           (1) shall be limited to legal, and not equitable, remedies; 
           (2) shall be barred unless it is commenced within the time 
        period specified in section 515B.4-115(a); or 
           (3) may be waived by a separate written document signed by 
        the seller and purchaser. 
           Sec. 35.  Minnesota Statutes 2004, section 515B.4-102, is 
        amended to read: 
           515B.4-102 [DISCLOSURE STATEMENT; GENERAL PROVISIONS.] 
           (a) A disclosure statement shall fully and accurately 
        disclose: 
           (1) the name and, if available, the number of the common 
        interest community; 
           (2) the name and principal address of the declarant; 
           (3) the number of units which the declarant has the right 
        to include in the common interest community and a statement that 
        the common interest community is either a condominium, 
        cooperative, or planned community; 
           (4) a general description of the common interest community, 
        including, at a minimum, (i) the number of buildings, (ii) the 
        number of dwellings per building, (iii) the type of 
        construction, (iv) whether the common interest community 
        involves new construction or rehabilitation, (v) whether any 
        building was wholly or partially occupied, for any purpose, 
        before it was added to the common interest community and the 
        nature of the occupancy, and (vi) a general description of any 
        roads, trails, or utilities that are located on the common 
        elements and that the association or a master association will 
        be required to maintain; 
           (5) declarant's schedule of commencement and completion of 
        construction of any buildings and other improvements that the 
        declarant is obligated to build pursuant to section 515B.4-117; 
           (6) any expenses or services, not reflected in the budget, 
        that the declarant pays or provides, which may become a common 
        expense; the projected common expense attributable to each of 
        those expenses or services; and an explanation of declarant's 
        limited assessment liability under section 515B.3-115, 
        subsection (b); 
           (7) any initial or special fee due from the purchaser to 
        the declarant or the association at closing, together with a 
        description of the purpose and method of calculating the fee; 
           (8) identification of any liens, defects, or encumbrances 
        which will continue to affect the title to a unit or to any real 
        property owned by the association after the contemplated 
        conveyance; 
           (9) a description of any financing offered or arranged by 
        the declarant; 
           (10) a statement as to whether application has been made 
        for any project approvals for the common interest community from 
        the Federal National Mortgage Association (FNMA), Federal Home 
        Loan Mortgage Corporation (FHLMC), Department of Housing and 
        Urban Development (HUD) or Department of Veterans Affairs (VA), 
        and which, if any, such final approvals have been received; 
           (11) the terms of any warranties provided by the declarant, 
        including copies of chapter 327A, and sections 515B.4-112 
        through 515B.4-115, and any other applicable statutory 
        warranties, and a statement of any limitations on the 
        enforcement of the applicable warranties or on damages; 
           (12) a statement that:  (i) within ten days after the 
        receipt of a disclosure statement, a purchaser may cancel any 
        contract for the purchase of a unit from a declarant; provided, 
        that the right to cancel terminates upon the purchaser's 
        voluntary acceptance of a conveyance of the unit from the 
        declarant or by the purchaser agreeing to modify or waive the 
        right to cancel in the manner provided by section 515B.4-106, 
        paragraph (a); (ii) if a purchaser receives a disclosure 
        statement more than ten days before signing a purchase 
        agreement, the purchaser cannot cancel the purchase agreement; 
        and (iii) if a declarant obligated to deliver a disclosure 
        statement fails to deliver a disclosure statement which 
        substantially complies with this chapter to a purchaser to whom 
        a unit is conveyed, the declarant shall be liable to the 
        purchaser as provided in section 515B.4-106(d); 
           (13) a statement disclosing to the extent of the 
        declarant's or an affiliate of a declarant's actual knowledge, 
        after reasonable inquiry, any unsatisfied judgments or lawsuits 
        to which the association is a party, and the status of those 
        lawsuits which are material to the common interest community or 
        the unit being purchased; 
           (14) a statement (i) describing the conditions under which 
        earnest money will be held in and disbursed from the escrow 
        account, as set forth in section 515B.4-109, (ii) that the 
        earnest money will be returned to the purchaser if the purchaser 
        cancels the contract pursuant to section 515B.4-106, and (iii) 
        setting forth the name and address of the escrow agent; 
           (15) a detailed description of the insurance coverage 
        provided by the association for the benefit of unit owners, 
        including a statement as to which, if any, of the items referred 
        to in section 515B.3-113, subsection (b), are insured by the 
        association; 
           (16) any current or expected fees or charges, other than 
        assessments for common expenses, to be paid by unit owners for 
        the use of the common elements or any other improvements or 
        facilities; 
           (17) the financial arrangements, including any 
        contingencies, which have been made to provide for completion of 
        all improvements that the declarant is obligated to build 
        pursuant to section 515B.4-118, or a statement that no such 
        arrangements have been made; 
           (18) in a cooperative:  (i) whether the unit owners will be 
        entitled for federal and state tax purposes, to deduct payments 
        made by the association for real estate taxes and interest paid 
        to the holder of a security interest encumbering the 
        cooperative; and (ii) a statement as to the effect on the unit 
        owners if the association fails to pay real estate taxes or 
        payments due the holder of a security interest encumbering the 
        cooperative; and (iii) the principal amount and a general 
        description of the terms of any blanket mortgage, contract for 
        deed, or other blanket security instrument encumbering the 
        cooperative property; 
           (19) a statement:  (i) that real estate taxes for the unit 
        or any real property owned by the association are not delinquent 
        or, if there are delinquent real estate taxes, describing the 
        property for which the taxes are delinquent, stating the amount 
        of the delinquent taxes, interest and penalties, and stating the 
        years for which taxes are delinquent, and (ii) setting forth the 
        amount of real estate taxes, including the amount of any special 
        assessment certified for payment with the real estate taxes, due 
        and payable with respect to the unit in the year in which the 
        disclosure statement is given, if real estate taxes have been 
        separately assessed against the unit; 
           (20) if the association or the purchaser of the unit will 
        be a member of a master association, a statement to that effect, 
        and all of the following information with respect to the master 
        association:  (i) a copy of the master declaration, if any 
        (other than any CIC plat), the articles of incorporation, 
        bylaws, and rules and regulations for the master association, 
        together with any amendments thereto; (ii) the name, address and 
        general description of the master association, including a 
        general description of any other association, unit owners, or 
        other persons which are or may become members; (iii) a 
        description of any nonresidential use permitted on any property 
        subject to the master association; (iv) a statement as to the 
        estimated maximum number of associations, unit owners or other 
        persons which may become members of the master association, and 
        the degree and period of control of the master association by a 
        declarant or other person; (v) a description of any facilities 
        intended for the benefit of the members of the master 
        association and not located on property owned or controlled by a 
        member or the master association; (vi) the financial 
        arrangements, including any contingencies, which have been made 
        to provide for completion of the facilities referred to in 
        subsection (v), or a statement that no arrangements have been 
        made; (vii) any current balance sheet of the master association 
        and a projected or current annual budget, as applicable, which 
        budget shall include with respect to the master association 
        those items in paragraph (23), clauses (i) through (iv) (iii), 
        and the projected monthly common expense assessment for each 
        type of unit, lot, or other parcel of real estate which is or is 
        planned to be subject to assessment; (viii) a description of any 
        expenses or services not reflected in the budget, paid for or 
        provided by a declarant or a person executing the master 
        declaration, which may become an expense of the master 
        association in the future; (ix) a description of any powers 
        delegated to and accepted by the master association pursuant to 
        section 515B.2-121(f)(2); (x) identification of any liens, 
        defects or encumbrances that will continue to affect title to 
        property owned or operated by the master association for the 
        benefit of its members; (xi) the terms of any warranties 
        provided by any person for construction of facilities in which 
        the members of the master association have or may have an 
        interest, and any known defects in the facilities which would 
        violate the standards described in section 515B.4-112(b); (xii) 
        a statement disclosing, to the extent of the declarant's 
        knowledge, after inquiry of the master association, any 
        unsatisfied judgments or lawsuits to which the master 
        association is a party, and the status of those lawsuits which 
        are material to the master association; (xiii) a description of 
        any insurance coverage provided for the benefit of its members 
        by the master association; and (xiv) any current or expected 
        fees or charges, other than assessments by the master 
        association, to be paid by members of the master association for 
        the use of any facilities intended for the benefit of the 
        members; 
           (21) a statement as to whether the unit will be 
        substantially completed at the time of conveyance to a 
        purchaser, and if not substantially completed, who is 
        responsible to complete and pay for the construction of the 
        unit; 
           (22) a copy of the declaration and any amendments thereto, 
        (exclusive of the CIC plat), any other recorded covenants, 
        conditions restrictions, and reservations affecting the common 
        interest community; the articles of incorporation, bylaws and 
        any rules or regulations of the association; any agreement 
        excluding or modifying any implied warranties; any agreement 
        reducing the statute of limitations for the enforcement of 
        warranties; any contracts or leases to be signed by purchaser at 
        closing; and a brief narrative description of any (i) contracts 
        or leases that are or may be subject to cancellation by the 
        association under section 515B.3-105 and (ii) any material 
        agreements entered into between the declarant and a governmental 
        entity that affect the common interest community; and 
           (23) any current a balance sheet for the association, 
        current within 90 days; a projected annual budget for the 
        association for the year in which the first unit is conveyed to 
        a purchaser, and thereafter the current annual budget of the 
        association; and a statement identifying the party responsible 
        for the preparation of the budget.  The budget shall assume that 
        all units intended to be included in the common interest 
        community, based upon the declarant's good faith estimate, have 
        been subjected to the declaration; provided, that additional 
        budget portrayals based upon a lesser number of units are 
        permitted.  The budget shall include, without limitation:  (i) a 
        statement of the amount included in the budget as a reserve for 
        maintenance, repair and replacement; (ii) a statement of any 
        other reserves; (iii) the projected common expense for each 
        category of expenditures for the association; and (iv) the 
        projected monthly common expense assessment for each type of 
        unit; and (v) a footnote or other reference to those components 
        of the common interest community the maintenance, repair, or 
        replacement of which the budget assumes will be funded by 
        assessments under section 515B.3-115(e) rather than by 
        assessments included in the association's annual budget, and a 
        statement referencing section 515B.3-115(e)(1) or (2) as the 
        source of funding.  If, based upon the association's then 
        current budget, the monthly common expense assessment for the 
        unit at the time of conveyance to the purchaser is anticipated 
        to exceed the monthly assessment stated in the budget, a 
        statement to such effect shall be included. 
           (b) A declarant shall promptly amend the disclosure 
        statement to reflect any material change in the information 
        required by this chapter. 
           (c) The master association, within ten days after a request 
        by a declarant, or any a holder of declarant rights, or a 
        purchaser referred to in section 515B.4-101(e), or the 
        authorized representative of any of them, shall furnish the 
        information required to be provided by subsection (a)(20).  A 
        declarant or other person who provides information pursuant to 
        subsection (a)(20) is not liable to the purchaser for any 
        erroneous information if the declarant or other person:  (i) is 
        not an affiliate of or related in any way to a person authorized 
        to appoint the master association board pursuant to section 
        515B.2-121(c)(3), and (ii) has no actual knowledge that the 
        information is incorrect. 
           Sec. 36.  Minnesota Statutes 2004, section 515B.4-105, is 
        amended to read: 
           515B.4-105 [COMMON INTEREST COMMUNITY WITH BUILDING ONCE 
        OCCUPIED.] 
           The disclosure statement of a common interest community 
        containing any building that was at any time before the creation 
        of the common interest community wholly or partially occupied, 
        for any purpose, by persons other than purchasers or persons who 
        occupied with the consent of purchasers, shall contain, in 
        addition to the information required by sections 515B.4-102, 
        515B.4-103 and 515B.4-104: 
           (1) a professional opinion prepared by a registered 
        professional architect or engineer, licensed in this state, 
        describing the present current condition of all structural 
        components, and mechanical and electrical installations, 
        material to the use and enjoyment of the building, to the extent 
        reasonably ascertainable without disturbing the improvements or 
        dismantling the equipment, which will be in place or be 
        operational at the time of conveyance of the first unit to a 
        person other than a declarant; 
           (2) a statement by the declarant of the expected useful 
        life of each item reported on in paragraph (1) or a statement 
        that no representations are made in that regard; and 
           (3) a list of any outstanding notices of uncured violations 
        of building code or other municipal regulations, together with 
        the estimated cost of curing those violations. 
           Sec. 37.  Minnesota Statutes 2004, section 515B.4-106, is 
        amended to read: 
           515B.4-106 [PURCHASER'S RIGHT TO CANCEL.] 
           (a) A person required to deliver a disclosure statement 
        pursuant to section 515B.4-101(b) shall provide at least one of 
        the purchasers of the unit with a copy of the disclosure 
        statement and all amendments thereto before conveyance of the 
        unit.  If a purchaser is not given a disclosure statement more 
        than five ten days before execution of the purchase agreement, 
        the purchaser may, before conveyance, cancel the purchase 
        agreement within five ten days after first receiving the 
        disclosure statement.  If a purchaser is given the disclosure 
        statement more than five ten days before execution of the 
        purchase agreement, the purchaser may not cancel the purchase 
        agreement pursuant to this section.  Except as expressly 
        provided in this chapter, The five-day ten-day rescission period 
        cannot be waived may be modified or waived, in writing, by 
        agreement of the purchaser of a unit only after the purchaser 
        has received and had an opportunity to review the disclosure 
        statement.  The person required to deliver a disclosure 
        statement may not condition the sale of the unit on the 
        purchaser agreeing to modify or waive the purchaser's ten-day 
        right of rescission, may not contractually obligate the 
        purchaser to modify or waive the purchaser's ten-day right of 
        rescission, and may not include a modification or waiver of the 
        ten-day right of rescission in any purchase agreement for the 
        unit.  To be effective, a modification or waiver of a 
        purchaser's ten-day right of rescission must be evidenced by an 
        instrument separate from the purchase agreement signed by the 
        purchaser more than three days after the purchaser signs the 
        purchase agreement. 
           (b) If an amendment to the disclosure statement materially 
        and adversely affects a purchaser, then the purchaser shall have 
        five ten days after delivery of the amendment to cancel the 
        purchase agreement in accordance with this section.  The ten-day 
        rescission period may be modified or waived, in writing, by 
        agreement of the purchaser of a unit only after the purchaser 
        has received and had an opportunity to review the disclosure 
        statement.  To be effective, a modification or waiver of a 
        purchaser's ten-day right of rescission under this section must 
        be evidenced by a written instrument separate from the purchase 
        agreement signed by the purchaser more than three days after the 
        purchaser receives the amendment. 
           (c) If a purchaser elects to cancel a purchase agreement 
        pursuant to this section, the purchaser may do so by giving 
        notice thereof pursuant to section 515B.1-115.  Cancellation is 
        without penalty, and all payments made by the purchaser before 
        cancellation shall be refunded promptly.  Notwithstanding 
        anything in this section to the contrary, the purchaser's 
        cancellation rights under this section terminate upon the 
        purchaser's acceptance of a conveyance of the unit. 
           (d) If a declarant obligated to deliver a disclosure 
        statement fails to deliver to the purchaser a disclosure 
        statement which substantially complies with this chapter, the 
        declarant shall be liable to the purchaser in the amount of 
        $1,000, in addition to any damages or other amounts recoverable 
        under this chapter or otherwise.  Any action brought under this 
        subsection shall be commenced within the time period specified 
        in section 515B.4-115, subsection (a). 
           Sec. 38.  Minnesota Statutes 2004, section 515B.4-107, is 
        amended to read: 
           515B.4-107 [RESALE OF UNITS.] 
           (a) In the event of a resale of a unit by a unit owner 
        other than a declarant, unless exempt under section 
        515B.4-101(c), the unit owner shall furnish to a purchaser, 
        before execution of any purchase agreement for a unit or 
        otherwise before conveyance, the following documents relating to 
        the association or to the master association, if applicable: 
           (1) copies of the declaration (other than any CIC plat), 
        the articles of incorporation and bylaws, any rules and 
        regulations, and any amendments thereto or supplemental 
        declarations; 
           (2) the organizational and operating documents relating to 
        the master association, if any; and 
           (3) a resale disclosure certificate from the association 
        dated not more than 90 days prior to the date of the purchase 
        agreement or the date of conveyance, whichever is earlier, 
        containing the information set forth in subsection (b). 
           (b) The resale disclosure certificate must be in 
        substantially the following form: 
                           COMMON INTEREST COMMUNITY
                         RESALE DISCLOSURE CERTIFICATE
        Name of Common Interest Community:.............................. 
        Name of Association:............................................ 
        Address of Association:......................................... 
        Unit Number(s) (include principal unit and any garage, storage, 
        or other auxiliary unit(s)):.....................................
           The following information is furnished by the association 
        named above according to Minnesota Statutes, section 515B.4-107. 
           1.  There is no right of first refusal or other restraint 
        on the free alienability of the above unit(s) contained in the 
        declaration, bylaws, rules and regulations, or any amendment to 
        them, except as follows:........................................ 
        ................................................................
        ................................................................
        ................................................................
           2.  The following periodic installments of common expense 
        assessments and special assessments are payable with respect to 
        the above unit(s): 
             a.  Annual assessment 
                 installments:      $.......   Due: .............
             b.  Special assessment
                 installments:      $.......   Due: .............
             c.  Unpaid assessments, fines, or other charges:
                   (1)   Annual          $.......
                   (2)   Special         $.......
                   (3)   Fines           $.......
                   (4)   Other Charges   $.......
             d.  The association has/has not (strike one) approved
                 a plan for levying certain common expense
                 assessments against fewer than all the units
                 according to Minnesota Statutes, section 515B.3-115,
                 subsection (e).  If a plan is approved, a description
                 of the plan is attached to this certificate.
           3.  In addition to the amounts due under paragraph 2, the 
        following additional fees or charges other than assessments are 
        payable by unit owners (include late payment charges, user fees, 
        etc.):..........................................................
        ................................................................
        ................................................................
           4.  There are no extraordinary expenditures approved by the 
        association, and not yet assessed, for the current and two 
        succeeding fiscal years, except as follows:..................... 
        ................................................................
        ................................................................
           5.  The association has reserved the following amounts for 
        maintenance, repair, or replacement:............................ 
        ................................................................
        ................................................................
        The following portions of these reserves are designated for the 
        following specified projects or uses:........................... 
        ................................................................ 
           6.  The following documents are furnished with this 
        certificate according to statute: 
             a.  The most recent regularly prepared balance sheet and
                 income and expense statement of the association.
             b.  The current budget of the association.
           7.  There are no unsatisfied judgments against the 
        association, except as follows (identify creditor and amount):.. 
        ................................................................
        ................................................................
           8.  There are no pending lawsuits to which the association 
        is a party, except as follows (identify and summarize status):.. 
        ................................................................ 
        ................................................................
        ................................................................
           9.  Description of insurance coverages: 
           a.  The association provides the following insurance 
        coverage for the benefit of unit owners:  (Reference may be made 
        to applicable sections of the declaration or bylaws; however, 
        any additional coverages should be described in this space) 
        ................................................................
        ................................................................
        ................................................................
           b.  The following described fixtures, decorating items, or 
        construction items within the unit referred to in Minnesota 
        Statutes, section 515B.3-113, subsection (b), are insured by the 
        association (check as applicable):  
        ..._____Ceiling or wall finishing materials                     
        ..._____Floor coverings                                         
        ..._____Cabinetry                                               
        ..._____Finished millwork                                       
        ..._____Electrical or plumbing fixtures serving a single unit   
        ..._____Built-in appliances                                     
        ..._____Improvements and betterments as originally constructed  
        ..._____Additional improvements and betterments installed by
                   unit owners                                          
           10.  The board of directors of the association has not 
        notified the unit owner (i) that any alterations or improvements 
        to the unit or to the limited common elements assigned to it 
        violate any provision of the declaration; or (ii) that the unit 
        is in violation of any governmental statute, ordinance, code, or 
        regulation, except as follows:...................................
        .................................................................
           11.  The remaining term of any leasehold estate affecting 
        the common interest community and the premises governing any 
        extension or renewal of it are as follows:...................... 
        ................................................................
        ................................................................
           12.  In addition to the above, the following matters 
        affecting the unit or the unit owner's obligations with respect 
        to the unit are deemed material.  .............................. 
        ................................................................
             I hereby certify that the foregoing information and
        statements are true and correct as of .............
                                                (Date)
                                            By:  .......................
                                            Title: .....................
                                            (Association representative)
                                            Address:....................
                                            Phone Number:...............
                                    RECEIPT 
        In addition to the foregoing information furnished by the 
        association, the unit owner is obligated to furnish to the 
        purchaser before execution of any purchase agreement for a unit 
        or otherwise before conveyance, copies of the following 
        documents relating to the association or to the master 
        association (as applicable):  the declaration (other than any 
        common interest community plat), articles of incorporation, 
        bylaws, rules and regulations (if any), and any amendments to 
        these documents.  Receipt of the foregoing documents, and the 
        resale disclosure certificate, is acknowledged by the 
        undersigned buyer(s). 
             Dated:  ............        .........................
                                         (Buyer)
                                         .........................
                                         (Buyer)
           (c) If the association is subject to a master association 
        to which has been delegated the association's powers under 
        section 515B.3-102(a)(2), then the financial information 
        required to be disclosed under subsection (b) may be disclosed 
        on a consolidated basis. 
           (d) The association, within ten days after a request by a 
        unit owner, or the unit owner's authorized representative, shall 
        furnish the certificate required in subsection (a).  The 
        association may charge a reasonable fee for furnishing the 
        certificate and any association documents related thereto.  A 
        unit owner providing a certificate pursuant to subsection (a) is 
        not liable to the purchaser for any erroneous information 
        provided by the association and included in the certificate. 
           (e) A purchaser is not liable for any unpaid common expense 
        assessments, including special assessments, if any, not set 
        forth in the certificate required in subsection (a).  A 
        purchaser is not liable for the amount by which the annual or 
        special assessments exceed the amount of annual or special 
        assessments stated in the certificate for assessments payable in 
        the year in which the certificate was given, except to the 
        extent of any increases subsequently approved in accordance with 
        the declaration or bylaws.  A unit owner is not liable to a 
        purchaser for the failure of the association to provide the 
        certificate, or a delay by the association in providing the 
        certificate in a timely manner. 
           Sec. 39.  Minnesota Statutes 2004, section 515B.4-108, is 
        amended to read: 
           515B.4-108 [PURCHASER'S RIGHT TO CANCEL RESALE.] 
           (a) Unless a purchaser is given the information required to 
        be delivered by section 515B.4-107, by a delivery method 
        described in that section, more than five ten days prior to the 
        execution of the purchase agreement for the unit the purchaser 
        may, prior to the conveyance, cancel the purchase agreement 
        within five ten days after receiving the information.  Except as 
        expressly provided in this chapter, the five-day rescission 
        period cannot be waived.  The ten-day rescission period may be 
        modified or waived, in writing, by agreement of the purchaser of 
        a unit only after the purchaser has received and had an 
        opportunity to review the information required to be delivered 
        by section 515B.4-107.  The person required to deliver the 
        information required to be delivered by section 515B.4-107 may 
        not condition the sale of the unit on the purchaser agreeing to 
        modify or waive the purchaser's ten-day right of rescission, may 
        not contractually obligate the purchaser to modify or waive the 
        purchaser's ten-day right of rescission, and may not include a 
        modification or waiver of the ten-day right of rescission in any 
        purchase agreement for the unit.  To be effective, a 
        modification or waiver of a purchaser's ten-day right of 
        rescission must be evidenced by an instrument separate from the 
        purchase agreement signed by the purchaser more than three days 
        after the purchaser signs the purchase agreement. 
           (b) A purchaser who elects to cancel a purchase agreement 
        pursuant to subsection (a), may do so by hand delivering notice 
        thereof or mailing notice by postage prepaid United States mail 
        to the seller or the agent.  Cancellation is without penalty and 
        all payments made by the purchaser shall be refunded promptly. 
           Sec. 40.  Minnesota Statutes 2004, section 515B.4-109, is 
        amended to read: 
           515B.4-109 [ESCROW DEPOSITS.] 
           All earnest money paid or deposits made in connection with 
        the purchase or reservation of units from or with a declarant 
        shall be deposited in an escrow account controlled jointly by 
        the declarant and the purchaser, or controlled by a licensed 
        title insurance company or agent thereof, an attorney 
        representing either the declarant or the purchaser, a licensed 
        real estate broker or, an independent bonded escrow company, or 
        a governmental agency or instrumentality.  The escrow account 
        shall be in an institution whose deposits are insured by a 
        governmental agency or instrumentality.  The money or deposits 
        shall be held in the escrow account until (i) delivered to the 
        declarant at closing; (ii) delivered to the declarant because of 
        the purchaser's default under a reservation agreement or a 
        contract to purchase the unit; (iii) delivered to the purchaser 
        pursuant to the provisions of section 515B.4-106 or the 
        provisions of a reservation agreement or a contract to purchase; 
        or (iv) delivered for payment of construction costs pursuant to 
        a written agreement between the declarant and the purchaser. 
           Sec. 41.  Minnesota Statutes 2004, section 515B.4-111, is 
        amended to read: 
           515B.4-111 [CONVERSION PROPERTY.] 
           (a) A unit owner of a unit occupied for residential use in 
        a common interest community containing conversion property shall 
        not, for a period of one year following the recording of the 
        declaration creating the common interest community, require any 
        occupant of the unit to vacate the unit unless the unit owner 
        gives notice to the occupant in the manner described in this 
        section.  The notice shall be given no later than 120 days 
        before the occupant is required to vacate the unit.  The notice 
        shall be sufficient as to all occupants of a unit if it is hand 
        delivered or mailed to the unit to be vacated, addressed to the 
        occupants thereof.  If the holder of the lessee's interest in 
        the unit has given the unit owner an address different than that 
        of the unit, then the notice shall also be given to the holder 
        of the lessee's interest at the designated address.  The notice 
        shall satisfy comply with the following requirements: 
           (1) The notice shall set forth generally the rights 
        conferred by this section. 
           (2) The notice shall have attached to the notice intended 
        for the holder of the lessee's interest a form of purchase 
        agreement setting forth the terms of sale contemplated by 
        subsection (d) and a statement of any significant restrictions 
        on the use and occupancy of the unit to be imposed by the 
        declarant. 
           (3) The notice shall state that the occupants of the 
        residential unit may demand to be given 60 additional days 
        before being required to vacate, if any of them, or any person 
        residing with them, is (i) 62 years of age or older, (ii) a 
        person with a disability as defined in section 268A.01, or (iii) 
        a minor child on the date the notice is given.  This demand must 
        be in writing, contain reasonable proof of qualification, and be 
        given to the declarant within 30 days after the notice of 
        conversion is delivered or mailed. 
           (4) The notice shall be contained in an envelope upon which 
        the following shall be boldly printed:  "Notice of Conversion." 
           (b) Notwithstanding subsection (a), an occupant may be 
        required to vacate a unit upon less than 120 days' notice by 
        reason of nonpayment of rent, utilities or other monetary 
        obligations, violations of law, waste, or conduct that disturbs 
        other occupants' peaceful enjoyment of the premises.  The terms 
        of the tenancy may not be altered during the notice period, 
        except that the holder of the lessee's interest or other party 
        in possession may vacate and terminate the tenancy upon one 
        month's written notice to the declarant.  Nothing in this 
        section prevents the unit owner and any occupant from agreeing 
        to a right of occupancy on a month-to-month basis beyond the 
        120-day notice period, or to an earlier termination of the right 
        of occupancy. 
           (c) No repair work or remodeling may be commenced or 
        undertaken in the occupied units or common areas of the building 
        during the notice period, unless reasonable precautions are 
        taken to ensure the safety and security of the occupants. 
           (d) For 60 days after delivery or mailing of the notice 
        described in subsection (a), the holder of the lessee's interest 
        in the unit on the date the notice is mailed or delivered shall 
        have an option to purchase that unit on the terms set forth in 
        the purchase agreement attached to the notice.  The purchase 
        agreement shall contain no terms or provisions which violate any 
        state or federal law relating to discrimination in housing.  If 
        the holder of the lessee's interest fails to purchase the unit 
        during that 60-day period, the unit owner may not offer to 
        dispose of an interest in that unit during the following 180 
        days at a price or on terms more favorable to the offeree than 
        the price or terms offered to the holder.  This subsection does 
        not apply to any unit in a conversion building if that unit will 
        be restricted exclusively to nonresidential use or if the 
        boundaries of the converted unit do not substantially conform to 
        the boundaries of the residential unit before conversion. 
           (e) If a unit owner, in violation of subsection (b), 
        conveys a unit to a purchaser for value who has no knowledge of 
        the violation, the recording of the deed conveying the unit or, 
        in a cooperative, the conveyance of the right to possession of 
        the unit, extinguishes any right a holder of a lessee's interest 
        who is not in possession of the unit may have under subsection 
        (d) to purchase that unit, but the conveyance does not affect 
        the right of the holder to recover damages from the unit owner 
        for a violation of subsection (d). 
           (f) If a notice of conversion specifies a date by which a 
        unit or proposed unit must be vacated or otherwise complies with 
        the provisions of chapter 504B, the notice also constitutes a 
        notice to vacate specified by that statute. 
           (g) Nothing in this section permits a unit owner to 
        terminate a lease in violation of its terms. 
           (h) Failure to give notice as required by this section is a 
        defense to an action for possession until a notice complying 
        with this section is given and the applicable notice period 
        terminates. 
           Sec. 42.  Minnesota Statutes 2004, section 515B.4-115, is 
        amended to read: 
           515B.4-115 [STATUTE OF LIMITATIONS FOR WARRANTIES.] 
           (a) A judicial proceeding for breach of an obligation 
        arising under section 515B.4-101(e) or 515B.4-106(d), shall be 
        commenced within six months after the conveyance of the unit or 
        other parcel of real estate. 
           (b) A judicial proceeding for breach of an obligation 
        arising under section 515B.4-112 or 515B.4-113 shall be 
        commenced within six years after the cause of action accrues, 
        but the parties may agree to reduce the period of limitation to 
        not less than two years.  An agreement reducing the period of 
        limitation shall be binding on the purchaser's successor assigns.
        With respect to a unit that may be occupied for residential use, 
        an agreement to reduce the period of limitation must be 
        evidenced by an instrument separate from the purchase agreement 
        signed by the purchaser. 
           (c) Subject to subsection (d), a cause of action under 
        section 515B.4-112 or 515B.4-113, regardless of the purchasers 
        lack of knowledge of the breach, accrues: 
           (1) as to a unit, at the earlier of the time of conveyance 
        of the unit by the declarant to a bona fide purchaser of the 
        unit other than an affiliate of a declarant, or the time the 
        purchaser enters into possession of the unit; and 
           (2) as to each common element, the latest of (i) the time 
        the common element is completed, (ii) the time the first unit in 
        the common interest community is conveyed to a bona fide 
        purchaser, or if the common element is located on property that 
        is additional real estate at the time the first unit therein is 
        conveyed to a bona fide purchaser, or (iii) the termination of 
        the period of declarant control. 
           (d) If a warranty explicitly extends to future performance 
        or duration of any improvement or component of the common 
        interest community, the cause of action accrues at the time the 
        breach is discovered or at the end of the period for which the 
        warranty explicitly extends, whichever is earlier. 
           Presented to the governor May 24, 2005 
           Signed by the governor May 27, 2005, 3:35 p.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569