2005 Minnesota Statutes

CHAPTER 515B. Minnesota common interest ownership act

ARTICLE 1

APPLICABILITY, DEFINITIONS AND OTHER GENERAL PROVISIONS

     515B.1-101 Short title. 

    Sections 515B.1-101 through 515B.4-118 may be cited as the 
 Minnesota Common Interest Ownership Act. 

    HIST: 1993 c 222 art 1 s 1 

     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 comply with section 
 515B.2-118(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 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 which consists of two units, 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 is not 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. 

    HIST: 1993 c 222 art 1 s 2; 1994 c 388 art 4 s 1; 1995 c 92 s 
 4; 1999 c 11 art 2 s 1; 2000 c 260 s 72; 2000 c 320 s 3; 2001 c 
 7 s 82; 2005 c 121 s 1 

     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 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, 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 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) 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 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. 

    HIST: 1993 c 222 art 1 s 3; 1994 c 388 art 4 s 2; 1995 c 92 s 
 5; 1999 c 11 art 2 s 2; 2000 c 260 s 73; 2005 c 121 s 2 

     515B.1-104 Variation by agreement. 

    The provisions of this chapter may not be varied by 
 agreement, and rights conferred by it may not be waived, except 
 as expressly provided in this chapter.  A declarant may not act 
 under a power of attorney, or use any other device, to evade the 
 limitations or prohibitions of this chapter or the declaration. 

    HIST: 1993 c 222 art 1 s 4 

     515B.1-105 Separate titles and taxation. 

    (a) In a cooperative: 

    (1) The unit owners' interests in units and their allocated 
 interests are wholly personal property, unless the declaration 
 provides that the interests are wholly real estate.  The 
 characterization of these interests as real or personal property 
 shall not affect whether homestead exemptions or classifications 
 apply. 

    (2) The ownership interest in a unit which may be sold, 
 conveyed, voluntarily or involuntarily encumbered, or otherwise 
 transferred by a unit owner, is the right to possession of that 
 unit under a proprietary lease coupled with the allocated 
 interests of that unit, and the association's interest in that 
 unit is not affected by the transaction. 

    (b) In a condominium or planned community: 

    (1) Each unit, and its allocated interest in the common 
 elements, constitutes a separate parcel of real estate. 

    (2) If there is any unit owner other than a declarant, each 
 unit shall be separately taxed and assessed, and no separate tax 
 or assessment may be rendered against any common elements. 

    (c) A unit used for residential purposes together with not 
 more than three units used for vehicular parking, and their 
 common element interests, shall be treated as one parcel of real 
 estate in determining whether homestead exemptions or 
 classifications apply. 

    HIST: 1993 c 222 art 1 s 5; 1994 c 388 art 4 s 3; 1997 c 84 
 art 1 s 5 

     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. 

    HIST: 1993 c 222 art 1 s 6; 2005 c 121 s 3 

     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. 

    HIST: 1993 c 222 art 1 s 7; 2005 c 121 s 4 

     515B.1-108 This chapter prevails; supplemental law. 

    The principles of law and equity, including the law of 
 corporations, the law of real property, the law relative to 
 capacity to contract, principal and agent, eminent domain, 
 estoppel, fraud, misrepresentation, duress, coercion, mistake, 
 receivership, substantial performance, or other validating or 
 invalidating cause supplement the provisions of this chapter, 
 except to the extent inconsistent with this chapter. 

    HIST: 1993 c 222 art 1 s 8 

     515B.1-109 Construction against implicit repeal. 

    This chapter being a general act intended as a unified 
 coverage of its subject matter, no part of it shall be construed 
 to be impliedly repealed by subsequent legislation if that 
 construction can reasonably be avoided. 

    HIST: 1993 c 222 art 1 s 9 

  515B.1-110 Repealed, 1996 c 310 s 1 

  515B.1-111 Repealed, 1996 c 310 s 1 

     515B.1-112 Unconscionable agreement or term of contract. 

    (a) The court, upon finding as a matter of law that a 
 contract or contract clause was unconscionable at the time the 
 contract was made, may refuse to enforce the contract, enforce 
 the remainder of the contract without the unconscionable clause, 
 or limit the application of any unconscionable clause in order 
 to avoid an unconscionable result. 

    (b) Whenever it is claimed, or appears to the court, that a 
 contract or any contract clause is or may be unconscionable, the 
 parties, in order to aid the court in making the determination, 
 shall be afforded a reasonable opportunity to present evidence 
 as to: 

    (1) the commercial setting of the negotiations; 

    (2) whether a party has knowingly taken advantage of the 
 inability of the other party reasonably to protect the other 
 party's interests by reason of physical or mental infirmity, 
 illiteracy, inability to understand the language of the 
 agreement, or similar factors; 

    (3) the effect and purpose of the contract or clause; and 

    (4) if a sale, any gross disparity, at the time of 
 contracting, between the amount charged for the property and the 
 value of that property measured by the price at which similar 
 property was readily obtainable in similar transaction, 
 provided, that this factor shall not, of itself, render the 
 contract unconscionable. 

    HIST: 1993 c 222 art 1 s 12 

     515B.1-113 Obligation of good faith. 

    Every contract or duty governed by this chapter imposes an 
 obligation of good faith in its performance or enforcement. 

    HIST: 1993 c 222 art 1 s 13 

     515B.1-114 Remedies to be liberally administered. 

    (a) The remedies provided by this chapter shall be 
 liberally administered to the end that the aggrieved party is 
 put in as good a position as if the other party had fully 
 performed.  However, consequential, special, or punitive damages 
 may not be awarded except as specifically provided in this 
 chapter or by other rule of law. 

    (b) Any right or obligation declared by this chapter is 
 enforceable by judicial proceeding, unless the provision 
 declaring it provides otherwise. 

    HIST: 1993 c 222 art 1 s 14 

     515B.1-115 Notice. 

    Except as otherwise stated in this chapter all notices 
 required by this chapter shall be in writing and shall be 
 effective upon hand delivery, or upon mailing if properly 
 addressed with postage prepaid and deposited in the United 
 States mail. 

    HIST: 1993 c 222 art 1 s 15 

     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, 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 $46 for the first ten affected certificates and 
 $10 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. 

    HIST: 1993 c 222 art 1 s 16; 1994 c 388 art 4 s 4; 1995 c 92 s 
 6; 1997 c 84 art 1 s 6; 1999 c 11 art 2 s 3; 2000 c 320 s 4; 
 2001 c 50 s 28; 2003 c 127 art 5 s 45; 2005 c 121 s 5; 2005 c 
 136 art 14 s 11; 1Sp2005 c 7 s 15 

ARTICLE 2

CREATION, ALTERATION AND TERMINATION

     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 a cooperative 
 where the unit boundaries are delineated by a structure, a 
 declaration, or an amendment to a declaration adding units, 
 shall not be recorded unless the structural components of the 
 structures containing the units and the mechanical systems 
 serving more than one unit, 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. 

    HIST: 1993 c 222 art 2 s 1; 1999 c 11 art 2 s 4; 2005 c 121 s 
 6 

     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, 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, 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, ceilings, doors, 
 windows, and door and window frames, are a part of the common 
 elements. 

    (c) In a planned community 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 lot lines 
 designated on a plat recorded pursuant to chapter 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 
 boundaries of 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 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. 

    HIST: 1993 c 222 art 2 s 2; 2005 c 121 s 7 

     515B.2-103 Construction and validity of declaration and 
  bylaws. 

    (a) All provisions of the declaration and bylaws are 
 severable. 

    (b) The rule against perpetuities may not be applied to 
 defeat any provision of the declaration or this chapter, or any 
 instrument executed pursuant to the declaration or this chapter. 

    (c) In the event of a conflict between the provisions of 
 the declaration and the bylaws, the declaration prevails except 
 to the extent that the declaration is inconsistent with this 
 chapter. 

    (d) The declaration and bylaws must comply with section 
 500.215. 

    HIST: 1993 c 222 art 2 s 3; 2005 c 168 s 3 

     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 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. 

    HIST: 1993 c 222 art 2 s 4; 1994 c 388 art 4 s 5; 1995 c 92 s 
 7; 1999 c 11 art 2 s 5; 2005 c 121 s 8 

     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; 

    (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. 

    HIST: 1993 c 222 art 2 s 5; 1994 c 388 art 4 s 6; 1995 c 92 s 
 8; 1999 c 11 art 2 s 6; 2000 c 260 s 74; 2001 c 7 s 83; 2005 c 
 121 s 9 

     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. 

    HIST: 1993 c 222 art 2 s 6; 2005 c 121 s 10 

     515B.2-107 Declaration of leasehold common interest 
  communities. 

    (a) Any lease the expiration or termination of which may 
 terminate the common interest community or reduce its size, or a 
 memorandum thereof, shall be recorded.  The declaration of a 
 leasehold common interest community shall include: 

    (1) the recording data for the lease, or the memorandum of 
 lease, and a statement of where the complete lease may be 
 inspected if only a memorandum is recorded; 

    (2) the date on which the lease expires; 

    (3) a legally sufficient description of the real estate 
 subject to the lease; 

    (4) any right of the unit owners to purchase the lessor's 
 interest in the lease and the procedure for exercise of those 
 rights, or a statement that they do not have those rights; 

    (5) any right of the unit owners to remove any improvements 
 within a reasonable time after the expiration or termination of 
 the lease, or a statement that they do not have those rights; 
 and 

    (6) any rights of the unit owners to renew the lease and 
 the conditions of any renewal, or a statement that they do not 
 have those rights. 

    (b) After the declaration of a leasehold condominium or 
 leasehold planned community is recorded, neither the lessor who 
 has joined in the declaration nor any successor in interest may 
 terminate the leasehold interest of a unit owner who makes 
 timely payment of the unit owner's share of the rent and 
 otherwise complies with all covenants which, if violated, would 
 entitle the lessor to terminate the lease.  A unit owner's 
 leasehold interest in a condominium or planned community is not 
 affected by failure of any other person to pay rent or fulfill 
 any other covenant. 

    (c) Acquisition of the leasehold interest of any unit owner 
 by the owner of the reversion or remainder does not merge the 
 leasehold and fee simple interest unless the leasehold interest 
 of all unit owners subject to that reversion or remainder are 
 acquired. 

    (d) If the expiration or termination of a lease decreases 
 the number of units in a common interest community, the 
 allocated interests shall be reallocated in accordance with 
 section 515B.1-107 as if those units had been taken by eminent 
 domain.  Reallocations must be confirmed by an amendment to the 
 declaration prepared, executed, and recorded by the association. 

    HIST: 1993 c 222 art 2 s 7 

     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.  The declaration need 
 not allocate votes 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 formulas 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. 

    HIST: 1993 c 222 art 2 s 8; 1999 c 11 art 2 s 7; 2005 c 121 s 
 11 

     515B.2-109 Common elements and limited common elements. 

    (a) Except as limited by the declaration or this chapter, 
 common elements other than limited common elements may be used 
 in common by all unit owners.  Limited common elements are 
 designated for the exclusive use of the unit owners of the unit 
 or units to which the limited common elements are allocated, 
 subject to subsection (b) and the rights of the association as 
 set forth in the declaration, the bylaws or this chapter. 

    (b) Except for the limited common elements described in 
 section 515B.2-102, subsections (d) and (f), the declaration 
 shall specify to which unit or units each limited common element 
 is allocated. 

    (c) An allocation of limited common elements may be changed 
 by an amendment to the declaration executed by the unit owners 
 between or among whose units the reallocation is made and the 
 association.  The amendment shall be approved by the board of 
 directors of the association as to form, and compliance with the 
 declaration and this chapter.  The association shall establish 
 fair and reasonable procedures and time frames for the 
 submission and processing of the reallocations, and shall 
 maintain records thereof.  If approved, the association shall 
 cause the amendment to be recorded promptly.  The amendment 
 shall be effective when recorded.  The association may require 
 the unit owners requesting the reallocation to pay all fees and 
 costs for reviewing, preparing and recording the amendment and 
 any amended CIC plat.  

    HIST: 1993 c 222 art 2 s 9; 1995 c 92 s 9; 1999 c 11 art 2 s 8 

     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 before the 
 recording of the declaration; provided, that if the CIC plat 
 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 licensed professional land surveyor 
 and 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 
 burdening any portion of the 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) comply with chapter 505; and 

    (2) 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 or limited common elements thus created. 

    (g) A CIC plat which complies with subsection (c) is not 
 subject to chapter 505. 

    HIST: 1993 c 222 art 2 s 10; 1994 c 388 art 4 s 7; 1995 c 92 s 
 10; 1999 c 11 art 2 s 9; 2005 c 121 s 12 

     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(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 a supplemental 
 declaration as provided in this section.  The supplemental 
 declaration shall be titled a "supplemental declaration," shall 
 be limited to matters authorized by this section, and shall 
 include: 

    (1) a legally sufficient description of the real estate 
 added by the supplemental declaration; 

    (2) 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; 

    (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 

    (7) an attached affidavit attesting to the giving of the 
 notice required by subsection (b), if such notice is required. 

    (b) If the period of declarant control has terminated, a 
 declarant shall give notice of its intention to add additional 
 real estate 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. 

    (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. 

    HIST: 1993 c 222 art 2 s 11; 2005 c 121 s 13 

     515B.2-112 Subdivision, combination, or conversion of 
  units. 

    (a) If the declaration so provides, (i) 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 one or more units, limited common elements, 
 common elements, or a combination of units, limited common 
 elements or common elements. 

    (b) If the unit or units are not owned exclusively by a 
 declarant, the unit owners of the units to be combined or 
 subdivided shall cause to be prepared and 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 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 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 each unit to be combined 
 or subdivided; 

    (2) assign a unit identifier to each unit 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 resulting from the 
 subdivision or combination on the basis of the formula described 
 in the declaration; and 

    (4) conform to the requirements of the declaration and this 
 chapter.  

    (d) If the association determines that the amendment and 
 amended CIC plat conform to the approved application, the 
 declaration, and this chapter, the association shall execute the 
 amendment and cause the amendment and the amended CIC plat to be 
 recorded.  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. 

    (e) If the unit 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 subsections 
 (c)(1), (2), (3), and (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. 

    (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's interest and remedies shall be deemed 
 to apply to the unit or units that result from the subdivision 
 or 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, all instruments and notices relating to the 
 foreclosure shall describe the subject property in terms of the 
 amendment and the amended CIC plat which created the resulting 
 units. 

    HIST: 1993 c 222 art 2 s 12; 2005 c 121 s 14 

     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 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. 

    HIST: 1993 c 222 art 2 s 13; 1999 c 11 art 2 s 10; 2005 c 121 
 s 15 

     515B.2-114 Relocation of boundaries between adjoining 
  units. 

    (a) Subject to the provisions of the declaration and 
 applicable law, the boundaries between adjoining units may be 
 relocated by an amendment to the declaration upon the submission 
 of an application to the association by the owners of those 
 units and approval by the association.  The application shall 
 contain, at a minimum, a general description of the proposed 
 relocation, and shall specify in detail the matters required by 
 subsection (b)(2) and (3). 

    (b) The association shall establish fair and reasonable 
 procedures and time frames for the submission and prompt 
 processing of the applications.  The basis for disapproval shall 
 be limited to structural or safety considerations, or a failure 
 to comply with the declaration, this chapter, or governmental 
 laws, ordinances or regulations.  If the application is 
 approved, the unit owners making the application shall cause an 
 amendment and amended CIC plat to be prepared based upon the 
 approved application, and submit them to the association for 
 approval.  The amendment shall: 

    (1) be executed by the unit owners and by any secured party 
 with respect to the units; 

    (2) identify the units involved; 

    (3) reallocate the common element interest, votes in the 
 association and common expense liability formerly allocated to 
 the units among the newly defined units on the basis described 
 in the declaration; 

    (4) contain words of conveyance between them; 

    (5) contain such other provisions as may be reasonably 
 required by the association; and 

    (6) conform to the requirements of the declaration and this 
 chapter. 

    (c) The interest and remedies of a secured party which 
 joins in the amendment pursuant to this section shall be deemed 
 to be modified as provided in the amendment. 

    (d) The association may require the unit owners making the 
 application to build a boundary wall and other common elements 
 between the units, and 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. 

    (e) The applicant shall deliver a copy of the recorded 
 amendment and amended CIC plat to the association. 

    HIST: 1993 c 222 art 2 s 14 

     515B.2-115 Minor variations in boundaries. 

    The existing physical boundaries of a unit, or of a unit 
 reconstructed in substantial accordance with the description 
 contained in the original declaration, are its legal boundaries, 
 regardless of vertical or lateral movement of the building or 
 minor variances due to shifting or settling.  This section does 
 not relieve a declarant or any other person of liability for 
 failure to adhere to the CIC plat or for any representation in a 
 disclosure statement. 

    HIST: 1993 c 222 art 2 s 15 

     515B.2-116 Use for sales purposes. 

    A declarant may maintain sales offices, management offices, 
 and models in units or on common elements in the common interest 
 community only if the declaration so provides and specifies the 
 rights of a declarant with regard to the number and location 
 thereof.  If the declaration so provides, a declarant may 
 maintain signs on the common elements and in model units 
 advertising the common interest community.  Rights granted 
 pursuant to this section are subject to the provisions of other 
 state laws and to local ordinances. 

    HIST: 1993 c 222 art 2 s 16 

     515B.2-117 Declarant's easement rights. 

    Subject to the provisions of the declaration, a declarant 
 has an easement through the common elements as may be reasonably 
 necessary for the purpose of discharging the declarant's 
 obligations or exercising special declarant rights, whether 
 arising under this chapter or reserved in the declaration. 

    HIST: 1993 c 222 art 2 s 17 

     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. 

    HIST: 1993 c 222 art 2 s 18; 1994 c 388 art 4 s 8; 1999 c 11 
 art 2 s 11; 2005 c 121 s 16 

     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 shall be measured by:  (i) in a condominium, their 
 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 
 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. 

    HIST: 1993 c 222 art 2 s 19; 1994 c 388 art 4 s 9; 1999 c 11 
 art 2 s 12; 2005 c 121 s 17 

     515B.2-120 Rights of secured parties. 

    Notwithstanding any requirement in the declaration, the 
 articles of incorporation or the bylaws that a percentage of 
 secured parties approve specified actions of the unit owners or 
 the association as a condition to the effectiveness of those 
 actions, no requirement for approval may operate to (i) deny or 
 delegate control over the general administrative affairs of the 
 association by the unit owners or the board of directors, or 
 (ii) prevent the association or the board of directors from 
 commencing, intervening in, or settling any litigation or 
 proceeding, or (iii) prevent the association or its appointed 
 insurance trustee from receiving and distributing any insurance 
 proceeds except pursuant to section 515B.3-113. 

    HIST: 1993 c 222 art 2 s 20 

     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 
 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 any person, whether or not the person 
 is a member of, or otherwise subject to, the master association, 
 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 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, 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 
 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 formulas governing the allocation 
 of assessments and member voting rights, including any special 
 classes or allocations referred to in subsection (d); 

    (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 located 
 on property subject to a master declaration may: 

    (i) delegate any of the powers described in section 
 515B.3-102 to 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 the master association. 

    (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. 

    (4) If a declaration or other recorded instrument 
 authorizes the board or 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. 

    (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 any 
 other person or persons required by the master declaration, 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 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 include associations or 
 property 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 
 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, or any other person, and exempt any 
 unit or other parcel of real estate owned by the person from a 
 lien for such assessments, until a 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. 

    HIST: 1993 c 222 art 2 s 21; 1999 c 11 art 2 s 13; 2005 c 121 
 s 18 

     515B.2-122 Merger or consolidation of common interest 
  communities. 

    (a) Any two or more common interest communities of the same 
 form of ownership, by agreement of the unit owners as provided 
 in subsection (b), may be merged or consolidated into a single 
 common interest community.  The resultant common interest 
 community shall be the legal successor, for all purposes, of all 
 of the preexisting common interest communities, and the 
 operations and activities of the preexisting common interest 
 communities are merged or consolidated into a single common 
 interest community that holds all powers, rights, obligations, 
 assets, and liabilities of the preexisting common interest 
 communities. 

    (b) An agreement of two or more common interest communities 
 to merge or consolidate pursuant to subsection (a) shall be 
 evidenced by an agreement executed by the president of the 
 association of each of the preexisting common interest 
 communities following approval by owners of units to which are 
 allocated the votes in each common interest community required 
 to terminate that common interest community. 

    (c) Every merger or consolidation agreement shall contain: 

    (1) the names of the resultant common interest community 
 and its association; 

    (2) the number of the resultant common interest community, 
 which shall be a new common interest community number assigned 
 to the resultant common interest community by the recording 
 officer; 

    (3) a requirement that the associations of the common 
 interest communities shall be merged pursuant to the applicable 
 statute; 

    (4) a reallocation of the allocated interests in the 
 preexisting common interest communities among the units of the 
 resultant common interest community by stating the reallocations 
 and the formulas upon which they are based; 

    (5) a statement that the common interest communities have 
 approved and will, within 90 days after the execution of the 
 merger agreement, record a declaration as provided in subsection 
 (d) or commence an appropriate proceeding to accomplish the 
 recording if necessary. 

    (d) A declaration, including a new or amended CIC plat if 
 necessary, complying with this chapter and governing the 
 resultant common interest community shall be recorded in every 
 county in which a portion of each preexisting common interest 
 community is located, and the merger or consolidation is not 
 effective until the declaration is recorded.  In addition to 
 other matters required by this chapter, the declaration shall 
 contain: 

    (1) a reference to the names and numbers of the preexisting 
 common interest communities, and the names of their 
 associations; 

    (2) a statement that the preexisting common interest 
 communities and their associations have been merged or 
 consolidated pursuant to this chapter and the applicable 
 corporate statute; and 

    (3) a statement that the declaration supersedes the 
 declarations of the preexisting common interest communities and 
 governs the resultant common interest community. 

    (e) Upon approval as provided in subsection (b), the 
 association for the resultant common interest community may 
 execute the declaration, and a new or amended CIC plat if 
 necessary, on behalf of the unit owners of, and all other 
 persons holding an interest in, the units or other property that 
 is a part of the preexisting common interest communities, and to 
 do all other acts necessary to merge or consolidate the common 
 interest communities. 

    (f) The declaration and CIC plat for the resultant common 
 interest community may be recorded without the necessity of 
 paying the current or delinquent real estate taxes on any of the 
 units. 

    HIST: 1993 c 222 art 2 s 22; 1999 c 11 art 2 s 14 

     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.  A 
 declaration and bylaws 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. 

    HIST: 1993 c 222 art 2 s 23; 2005 c 121 s 19 

     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 
 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, 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 shall be recorded simultaneously with the 
 amendment to the existing declaration.  No later than 30 days 
 after the date of the severance agreement, the articles of 
 incorporation creating the association intended to govern the 
 new common interest community 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 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 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. 

    HIST: 1999 c 11 art 2 s 15; 2005 c 121 s 20 

     515B.2-125 Addition of common elements. 

    (a) Unless the declaration provides otherwise, real estate 
 owned by the association may be added to the common interest 
 community, as common elements only, subject to the requirements 
 of this section.  Subject to any additional requirements 
 contained in the declaration, the addition of the real estate 
 shall be approved by: 

    (1) unit owners entitled to cast at least 67 percent of the 
 votes in the association; 

    (2) declarant until the earlier of (i) five years after the 
 recording of the declaration, or (ii) 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.  A part of the common elements shall not be 
 designated as limited common elements unless approved 
 unanimously in writing by the unit owners. 

    (c) The approval by the unit owners shall be deemed to 
 grant to the association a power of attorney coupled with an 
 interest to acquire title to the real estate, if not previously 
 acquired, and to add the real estate to 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 an amendment to the declaration and any other 
 instruments relating to the acquisition. 

    (d) Following the required approvals, the association shall 
 record an amendment to the declaration complying with this 
 chapter, that, at a minimum, (i) legally describes the real 
 estate added, (ii) designates the real estate as part of the 
 common elements, and (iii) subjects the real estate to the 
 declaration. 

    (e) In the case of a common interest community using a plat 
 complying with section 515B.2-110, subsection (c), the 
 association shall record an amended CIC plat reflecting the 
 change in the common elements with the amendment to the 
 declaration.  The recording of the amendment to the declaration, 
 and amended CIC plat if required, shall complete the addition of 
 the real estate without further action by any person. 

    HIST: 1999 c 11 art 2 s 16 

ARTICLE 3

ORGANIZATION AND OPERATION

     515B.3-101 Organization of unit owners' association. 

    A common interest community shall be administered by an 
 association.  The 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. 

    HIST: 1993 c 222 art 3 s 1; 2005 c 121 s 21 

     515B.3-102 Powers of unit owners' association. 

    (a) Except as provided in subsections (b) and (c), 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 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, grant other easements, leases, and licenses 
 through, over or under the common elements; 

    (10) impose and receive any payments, fees, or charges for 
 the use, rental, or operation of the common elements, other than 
 limited common elements, and for services provided to unit 
 owners; 

    (11) impose 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. 

    (c) Notwithstanding subsection (a), powers exercised under 
 this section must comply with section 500.215. 

    HIST: 1993 c 222 art 3 s 2; 2005 c 121 s 22; 2005 c 168 s 4 

     515B.3-103 Board of directors, officers 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) 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 period of declarant 
 control begins on the date of 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, (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) 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 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 conveyed shall be calculated 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. 

    HIST: 1993 c 222 art 3 s 3; 1999 c 11 art 2 s 17; 2005 c 121 s 
 23 

     515B.3-104 Transfer of special declarant rights. 

    (a) A special declarant right created or reserved under 
 this chapter may be voluntarily transferred only by a separate 
 instrument evidencing the transfer recorded in every county in 
 which any part of the common interest community is located.  The 
 separate instrument shall be recorded against all units in the 
 common interest community, or in the case of a cooperative, 
 against the real estate owned by the cooperative, or in the case 
 of a condominium on registered land, the instrument must be 
 filed pursuant to section 508.351, subdivision 3, or 508A.351, 
 subdivision 3.  The instrument may provide for the conveyance of 
 less than all of the special declarant rights, and is not 
 effective unless executed by the transferor and transferee.  A 
 deed in lieu of foreclosure, or other conveyance arising out of 
 a foreclosure or cancellation, shall not be deemed a voluntary 
 transfer within the meaning of this section. 

    (b) Upon the voluntary transfer of any special declarant 
 right, the liability of a transferor declarant is as follows: 

    (1) A transferor is not relieved of any obligation or 
 liability arising before the transfer and remains liable for 
 warranty obligations imposed on the transferor by this chapter.  
 Lack of privity does not deprive any unit owner of standing to 
 maintain an action to enforce any obligation of the transferor. 

    (2) If a successor to any special declarant right is an 
 affiliate of a declarant, the transferor is jointly and 
 severally liable with the successor for any obligations or 
 liabilities of the successor relating to the common interest 
 community. 

    (3) If a transferor retains any special declarant rights, 
 but transfers other special declarant rights to a successor who 
 is not an affiliate of the declarant, the transferor is liable 
 for any obligations or liabilities imposed on a declarant by 
 this chapter or by the declaration relating to the retained 
 special declarant rights and arising before or after the 
 transfer. 

    (4) A transferor has no liability for any act or omission 
 or any breach of a contractual or warranty obligation arising 
 from the exercise of a special declarant right by a successor 
 declarant who is not an affiliate of the transferor. 

    (c) Upon the voluntary transfer of any special declarant 
 right, the liability of a successor declarant is as follows: 

    (1) A successor to any special declarant right who is an 
 affiliate of a declarant is subject to all obligations and 
 liabilities imposed on the transferor by this chapter or by the 
 declaration. 

    (2) A successor to any special declarant right who is not 
 an affiliate of a declarant is subject to all obligations and 
 liabilities imposed by this chapter or the declaration, except:  
 (i) misrepresentations by any previous declarant; (ii) warranty 
 obligations on improvements made by any previous declarant, or 
 made before the common interest community was created; (iii) 
 breach of any fiduciary obligation by any previous declarant or 
 the declarant's appointees to the board; (iv) any liability or 
 obligation imposed on the transferor as a result of the 
 transferor's acts or omissions after the transfer; and (v) any 
 liability arising out of a special declarant right which was not 
 transferred as provided in subsection (a). 

    (d) In case of foreclosure of a mortgage or cancellation of 
 a contract for deed or other security interest (or conveyance in 
 lieu thereof), sale by a trustee under an agreement creating a 
 security interest, tax sale, judicial sale, or sale under 
 bankruptcy code or receivership proceedings, of any units or 
 additional real estate, or interest therein, owned by a 
 declarant, a person acquiring title to the property or interests 
 succeeds to all special declarant rights related to the property 
 or interests held by that declarant and acquired by it unless (i)
 the mortgage instrument or other instrument creating the 
 security interest, (ii) the instrument conveying title or (iii) 
 a separate instrument signed by the person and recorded within 
 60 days after the person acquires title to the property or 
 interests, provides for transfer of less than all special 
 declarant rights.  The separate instrument need be recorded only 
 against the title to the units or interests other than those 
 being acquired under this subsection, or in the case of a 
 cooperative, against the real estate owned by the cooperative.  
 The declarant shall cease to have or exercise any special 
 declarant rights which are transferred.  If the person has 
 limited the transfer of certain special declarant rights as 
 provided in this subsection, then it and its successor's 
 liability shall be limited, as follows: 

    (1) If the person or its successor limits its rights and 
 liabilities only to maintain models, sales office and signs, and 
 if that party is not an affiliate of a declarant, it is not 
 subject to any liability or obligations as a declarant, except 
 the obligation to provide a disclosure statement and any 
 liability arising from that obligation, and it may not exercise 
 any other special declarant rights. 

    (2) If the person or its successor is not an affiliate of a 
 declarant, it may declare its intention in a recorded instrument 
 as provided in subsection (a) to acquire all special declarant 
 rights and hold those rights solely for transfer to another 
 person.  Thereafter, until the special declarant rights are 
 transferred to a person acquiring title to any unit owned by the 
 successor, or until a separate instrument is recorded permitting 
 exercise of all of those rights, that successor may not exercise 
 any of those rights other than the right to control the board of 
 directors in accordance with the provisions of section 
 515B.3-103 for the duration of any period of declarant control.  
 So long as any successor may not exercise its special declarant 
 rights under this subsection, it is not subject to any liability 
 or obligation as a declarant other than liability for its acts 
 and omissions under section 515B.3-103. 

    (e) Any attempted exercise by a purported successor to a 
 special declarant right which is not transferred as provided in 
 this section is void, and any purported successor attempting to 
 exercise that right shall be liable for any damages arising out 
 of its actions. 

    (f) Nothing in this section shall subject any successor to 
 a special declarant right to any claims against or other 
 obligations of a transferor declarant, other than claims and 
 obligations arising under this chapter, or the declaration or 
 bylaws. 

    HIST: 1993 c 222 art 3 s 4; 2001 c 50 s 29 

     515B.3-105 Termination of contracts, leases. 

    (a) If entered into prior to termination of the period of 
 declarant control, (i) any management contract, employment 
 contract, or lease of recreational facilities, 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 under the 
 procedures described in this section.  

    (b) If 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 subsection 
 (a) is entered into by a person having authority to appoint the 
 directors of the master association and is binding upon 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: 

    (1) any lease the termination of which would terminate the 
 common interest community; 

    (2) in the case of a cooperative, a mortgage or contract 
 for deed encumbering real estate 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. 

    HIST: 1993 c 222 art 3 s 5; 1999 c 11 art 2 s 18; 2000 c 260 s 
 75; 2005 c 121 s 24 

     515B.3-106 Bylaws; annual report. 

    (a) A common interest community shall have bylaws which 
 comply with this chapter and 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. 

    HIST: 1993 c 222 art 3 s 6; 1999 c 11 art 2 s 19; 2005 c 121 s 
 25 

     515B.3-107 Upkeep of common interest community. 

    (a) Except to the extent provided by the declaration, this 
 subsection or section 515B.3-113, the association is responsible 
 for the maintenance, repair and replacement of the common 
 elements, and each unit owner is responsible for the 
 maintenance, repair and replacement of the unit owner's unit.  
 Damage to the common elements or any unit as a result of the 
 acts or omissions of a unit owner or the association is the 
 responsibility of the person causing the damage, or whose agents 
 or invitees caused the damage. 

    (b) The association shall have access through and into each 
 unit for purposes of performing maintenance, repair or 
 replacement for which the association may be responsible.  The 
 association and any public safety personnel shall also have 
 access for purposes of abating or correcting any condition in 
 the unit which violates any governmental law, ordinance or 
 regulation, which may cause material damage to or jeopardize the 
 safety of the common interest community, or which may constitute 
 a health or safety hazard for occupants of units. 

    (c) Neither the association, nor any unit owner other than 
 the declarant or its affiliates, is subject to a claim for 
 payment of expenses incurred in connection with any additional 
 real estate. 

    HIST: 1993 c 222 art 3 s 7 

     515B.3-108 Meetings. 

    (a) A meeting of the association shall be held at least 
 once each year.  At each annual meeting, there shall be, at a 
 minimum, (i) an election of successor directors for those 
 directors whose terms have expired, (ii) a report on the 
 activities and financial condition of the association and (iii) 
 consideration of and action on any other matters included in the 
 notice of meeting.  Unless the bylaws provide otherwise, special 
 meetings of the association may be called by the president and 
 shall be called by the president or secretary upon the written 
 petition of a majority of the board or unit owners entitled to 
 cast at least 20 percent of the votes in the association. 

    (b) Not less than 21 nor more than 30 days in advance of 
 any annual meeting, and not less than seven nor more than 30 
 days in advance of any special meeting, the secretary or other 
 officer specified in the bylaws shall cause notice to be hand 
 delivered or sent postage prepaid by United States mail to the 
 mailing address of each unit, or to any other address designated 
 in writing by the unit owner to the association as provided in 
 the bylaws or by statute. 

    (c) The notice of any meeting shall state the date, time 
 and place of the meeting, the purposes of the meeting, and, if 
 proxies are permitted, the procedures for appointing proxies. 

    (d) The board may provide for reasonable procedures 
 governing the conduct of meetings and elections. 

    HIST: 1993 c 222 art 3 s 8 

     515B.3-109 Quorums. 

    (a) Unless the bylaws provide otherwise, a quorum is 
 present throughout any meeting of the association if unit owners 
 entitled to cast in excess of 20 percent of the votes in the 
 association are present in person or by proxy at the beginning 
 of the meeting. 

    (b) Unless the bylaws provide otherwise, a quorum is 
 present throughout any meeting of the board if persons entitled 
 to cast in excess of 50 percent of the votes on that board are 
 present in person at the beginning of the meeting. 

    HIST: 1993 c 222 art 3 s 9 

     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. 

    HIST: 1993 c 222 art 3 s 10; 1999 c 11 art 2 s 20; 2005 c 121 
 s 26 

     515B.3-111 Tort and contract liability. 

    (a) Neither the association nor any unit owner except the 
 declarant is liable for that declarant's torts in connection 
 with any part of the common interest community.  An action 
 alleging a tort or contract violation by the association shall 
 not be brought against a unit owner solely by reason of 
 ownership.  If the tort or contract violation occurred during 
 any period of declarant control and the association or a unit 
 owner gives the declarant reasonable notice of and an 
 opportunity to defend against the action, the declarant who then 
 controlled the association is liable to the association or to 
 any unit owner for (i) all losses not covered by insurance 
 suffered by the association or that unit owner, and (ii) all 
 costs that the association would not have incurred but for the 
 tort or contract violation. 

    (b) Whenever the declarant is liable to the association or 
 a unit owner under this section, the declarant is also liable 
 for all expenses of litigation, including reasonable attorney's 
 fees, incurred by the association or unit owner.  Any statute of 
 limitation affecting a right of action under this section is 
 tolled until the period of declarant control terminates.  A unit 
 owner is not precluded from maintaining an action contemplated 
 by this section because of being a unit owner or an officer or 
 director of the association. 

    (c) Except as provided in subsections (a) and (b) with 
 respect to a declarant, no unit owner shall have tort liability 
 arising out of ownership of the common elements if the 
 association has liability insurance coverage on the occurrence 
 in an amount not less than $1,000,000. 

    HIST: 1993 c 222 art 3 s 11 

     515B.3-112 Conveyance 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) Unless made pursuant to this section, any purported 
 conveyance, 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. 

    HIST: 1993 c 222 art 3 s 12; 1995 c 92 s 11; 2005 c 121 s 27 

     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.  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. 

    HIST: 1993 c 222 art 3 s 13; 1994 c 388 art 4 s 10; 1995 c 258 
 s 65; 1999 c 11 art 2 s 21; 2005 c 121 s 28 

     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 
 interest community which the association is obligated to 
 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. 

    HIST: 1993 c 222 art 3 s 14; 2005 c 121 s 29 

     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 operating expenses of the common 
 interest community, and shall fund the replacement reserve 
 component of the common expenses as required by subsection (b).  

    (2) If a common expense assessment has been levied, all 
 unit owners including the declarant shall pay the assessments 
 allocated to their units, subject to the following: 

    (i) If the declaration so provides, a declarant's 
 liability, and the assessment lien, for the common expense 
 assessments, exclusive of replacement reserves, on any unit 
 owned by the declarant may be limited to 25 percent or more of 
 any assessment, exclusive of replacement reserves, until the 
 unit or any building located in the unit is substantially 
 completed.  Substantial completion shall be evidenced by a 
 certificate of occupancy in any jurisdiction that issues the 
 certificate. 

    (ii) If the declaration provides for a reduced assessment 
 pursuant to paragraph (2)(i), the declarant shall be obligated, 
 within 60 days following the termination of the period of the 
 declarant control, to make up any operating deficit incurred by 
 the association during the period of declarant control. 

    (b) The replacement reserve component of the common 
 expenses shall be funded for each unit in accordance with the 
 projected annual budget required by section 515B.4-102(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. 

    HIST: 1993 c 222 art 3 s 15; 1995 c 92 s 12; 1999 c 11 art 2 s 
 22; 2000 c 260 s 76; 2005 c 121 s 30 

     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, 
 (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.  

    (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, 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. 

    HIST: 1993 c 222 art 3 s 16; 1994 c 388 art 4 s 11; 1999 c 11 
 art 2 s 23; 1999 c 199 art 2 s 30; 2000 c 260 s 77; 2001 c 195 
 art 2 s 32; 2003 c 2 art 2 s 16; 2005 c 121 s 31 

     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, 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 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. 

    HIST: 1993 c 222 art 3 s 17; 1994 c 388 art 4 s 12; 2001 c 50 
 s 30; 2001 c 195 art 2 s 33; 2005 c 121 s 32 

     515B.3-118 Association records. 

    The association shall keep adequate records of its 
 membership, unit owners meetings, board of directors meetings, 
 committee meetings, contracts, leases and other agreements to 
 which the association is a party, and material correspondence 
 and memoranda relating to its operations.  The association shall 
 keep financial records sufficiently detailed to enable the 
 association to comply with sections 515B.3-106(b) and 
 515B.4-107.  All records shall be made reasonably available for 
 examination by any unit owner or the unit owner's authorized 
 agent, subject to the applicable statutes. 

    HIST: 1993 c 222 art 3 s 18 

     515B.3-119 Association as trustee. 

    With respect to a third person dealing with the association 
 in the association's capacity as a trustee, the existence of 
 trust powers and their proper exercise by the association may be 
 assumed without inquiry.  A third person is not bound to inquire 
 whether the association has power to act as trustee or is 
 properly exercising trust powers and third person, without 
 actual knowledge that the association is exceeding its powers or 
 improperly exercising them, is fully protected in dealing with 
 the association as if it possessed and properly exercised the 
 powers it purports to exercise.  A third person is not bound to 
 assure the proper application of trust assets paid or delivered 
 to the association in its capacity as trustee. 

    HIST: 1993 c 222 art 3 s 19 

     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 which are binding on 
 the association, 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 
 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 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), to the 
 extent applicable.  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. 

    HIST: 1993 c 222 art 3 s 20; 2005 c 121 s 33 

     515B.3-121 Accounting controls. 

    (a) Subject to any additional or greater requirements set 
 forth in the declaration or bylaws, a review of the 
 association's financial statements shall be made at the end of 
 the association's fiscal year, unless prior to 60 days after the 
 end of that fiscal year, at a meeting or by mailed ballot, unit 
 owners of units to which at least 30 percent of the votes in the 
 association are allocated vote to waive the review requirement 
 for that fiscal year.  A waiver vote shall not apply to more 
 than one fiscal year, and shall not affect the board's authority 
 to cause a review or audit to be made.  The reviewed financial 
 statements shall be delivered to all members of the association 
 within 180 days after the end of the association's fiscal year. 

    (b) The review shall be made by a licensed, independent 
 certified public accountant.  A licensed, independent certified 
 public accountant means an accountant who (i) is not an employee 
 of the declarant or its affiliates, (ii) is professionally 
 independent of the control of the declarant or its affiliates, 
 (iii) is licensed by the Minnesota State Board of Accountancy 
 and (iv) satisfies the tests for independence as promulgated by 
 the American Institute of Certified Public Accountants. 

    (c) Where the financial statements are prepared by an 
 independent certified public accountant, they shall be prepared 
 in accordance with generally accepted accounting principles as 
 established from time to time by the American Institute of 
 Certified Public Accountants, and shall be reviewed in 
 accordance with standards for accounting and review services.  
 In such case, the financial statements shall be presented on the 
 full accrual basis using an accounting format that separates 
 operating activity from replacement reserve activity. 

    HIST: 1993 c 222 art 3 s 21; 1999 c 11 art 2 s 24 

ARTICLE 4

PROTECTION OF PURCHASERS

     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. 

    HIST: 1993 c 222 art 4 s 1; 1999 c 11 art 2 s 25; 2005 c 121 s 
 34 

     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 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 five 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 five 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; (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, 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 (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, 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) a balance sheet for the association, current within 90 
 days; a projected annual budget for 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 replacement; (ii) a 
 statement of any other reserves; (iii) the projected common 
 expense for each category of expenditures for the association; 
 (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, 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. 

    HIST: 1993 c 222 art 4 s 2; 1999 c 11 art 2 s 26; 2005 c 10 
 art 1 s 74; 2005 c 121 s 35 

     515B.4-103 Common interest communities subject to rights 
  to add realty. 

    If the declaration provides that a common interest 
 community is subject to any rights to add additional real estate:

    (1) the disclosure statement shall include the following 
 notice: 

    "The following notice is required by Minnesota Statutes.  
 The declarant has reserved in the declaration certain rights to 
 add additional real estate.  These rights allow a declarant to 
 add units or common elements to a common interest community, and 
 to make other changes to the community over a specified period 
 of time.  These changes may have a substantial effect upon the 
 units or rights of unit owners, by changing relative voting 
 power and share of common expenses, by increasing the number of 
 persons using the common elements, by altering the size and 
 appearance of the common interest community and by making other 
 changes which may affect the value or utility of the units.  A 
 purchaser of units in this common interest community should 
 consider the possible effects of the declarant's rights reserved 
 for this project"; and 

    (2) the disclosure statement shall include, in addition to 
 the information required by section 515B.4-102, a statement 
 referencing the provisions of the declaration where rights to 
 add additional real estate are reserved. 

    HIST: 1993 c 222 art 4 s 3 

     515B.4-104 Time shares. 

    If the declaration permits time shares, the disclosure 
 statement shall contain or disclose, in addition to the 
 information required by sections 515B.4-102 and 515B.4-103: 

    (1) the unit identifiers of the units in which time shares 
 may be created; 

    (2) the total number of time shares that may be created; 

    (3) the minimum duration of any time shares that may be 
 created; 

    (4) the extent to which the creation of time shares will or 
 may affect the enforceability of the association's lien for 
 assessments provided in section 515B.3-116; 

    (5) a statement as to whether the time share interest is a 
 fixed time period in a designated unit or if either the time 
 period or unit may vary; 

    (6) copies of all organizational documents, contracts, 
 leases and other documents affecting the time share association 
 or the time shares, or the purchaser's rights therein; 

    (7) any state or federal ruling or nonaction letter 
 regarding the time shares classification as a security or a 
 statement that there is no ruling or nonaction letter; 

    (8) a statement as to whether the time share is registered 
 with the state under the Subdivided Land Sales Act or with the 
 federal government under the Interstate Land Sales Act and, if 
 the time share is so registered, a copy of the public offering 
 statement or other disclosure document required by those acts; 
 and 

    (9) if the time share owners are to be permitted or 
 required to become members of or to participate in a program for 
 the exchange of occupancy rights among themselves or with the 
 owners of time shares in other projects or both, a general 
 description of the program. 

    HIST: 1993 c 222 art 4 s 4 

     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 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. 

    HIST: 1993 c 222 art 4 s 5; 2005 c 121 s 36 

     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 ten days before execution of the purchase agreement, the 
 purchaser may, before conveyance, cancel the purchase agreement 
 within ten days after first receiving the disclosure statement.  
 If a purchaser is given the disclosure statement more than ten 
 days before execution of the purchase agreement, the purchaser 
 may not cancel the purchase agreement pursuant to 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.  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 receives the 
 disclosure statement. 

    (b) If an amendment to the disclosure statement materially 
 and adversely affects a purchaser, then the purchaser shall have 
 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 amendment.  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). 

    HIST: 1993 c 222 art 4 s 6; 1999 c 11 art 2 s 27; 2000 c 260 s 
 78; 2004 c 203 art 1 s 7; 2005 c 121 s 37; 1Sp2005 c 7 s 23 

     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 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. 

    HIST: 1993 c 222 art 4 s 7; 1999 c 11 art 2 s 28; 2000 c 450 s 
 5; 2005 c 121 s 38 

     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 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 ten days after receiving the information.  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 receives the 
 resale disclosure certificate. 

    (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. 

    HIST: 1993 c 222 art 4 s 8; 1999 c 11 art 2 s 29; 2004 c 203 
 art 1 s 8; 2005 c 121 s 39; 1Sp2005 c 7 s 24 

     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, 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. 

    HIST: 1993 c 222 art 4 s 9; 2005 c 121 s 40 

     515B.4-110 Obligation to release liens. 

    (a) In the case of a transfer of a unit where a disclosure 
 statement is required, the declarant, before conveying the unit, 
 shall: 

    (1) record or furnish to the purchaser recordable releases 
 of all liens that the purchaser does not agree in writing to 
 take subject to or assume, that encumber: 

    (i) in a condominium, that unit and its common element 
 interest, and 

    (ii) in a cooperative or planned community, that unit and 
 any common elements; or 

    (2) if the purchaser agrees in writing, provide the 
 purchaser with a surety bond, substitute collateral or title 
 insurance assuring against loss or damage from the enforcement 
 of the lien. 

    (b) Before conveying real estate to the association, the 
 declarant shall have the real estate released from:  (1) all 
 liens the foreclosure of which would deprive unit owners of any 
 material right of access to a unit or any material easements 
 appurtenant to a unit, and (2) all other liens on that real 
 estate, unless the disclosure statement specifically states that 
 the declarant may convey the real estate to the association 
 subject to liens and discloses the maximum amount and all other 
 relevant terms of the lien. 

    HIST: 1993 c 222 art 4 s 10 

     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 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. 

    HIST: 1993 c 222 art 4 s 11; 1999 c 11 art 2 s 30; 1999 c 199 
 art 2 s 31; 2005 c 121 s 41 

     515B.4-112 Express warranties. 

    (a) Express warranties made by a declarant or an affiliate 
 of a declarant to a purchaser of a unit, if reasonably relied 
 upon by the purchaser, are created as follows: 

    (1) Any affirmation of fact or promise which relates to the 
 unit; use of the unit; rights appurtenant to the unit; 
 improvements to the common interest community that would 
 directly benefit the purchaser or the unit; or the right to use 
 or have the benefit of facilities which are not a part of the 
 common interest community, creates an express warranty that the 
 unit and related rights and uses will conform to the affirmation 
 or promise. 

    (2) Any model or description of the physical 
 characteristics of a unit or the common interest community, 
 including plans and specifications of or for a unit or other 
 improvements located in the common interest community, creates 
 an express warranty that the unit and the common interest 
 community will conform to the model or description.  A notice 
 prominently displayed on a model or included in a description 
 shall prevent a purchaser from reasonably relying upon the model 
 or description to the extent of the disclaimer set forth in the 
 notice. 

    (3) Any description of the quantity or extent of the real 
 estate comprising the common interest community, including plats 
 or surveys, creates an express warranty that the common interest 
 community will conform to the description, subject to customary 
 tolerances. 

    (b) Neither the form of the word "warranty" or "guaranty", 
 nor a specific intention to make a warranty, are necessary to 
 create an express warranty of quality, but a statement 
 purporting to be merely an opinion or commendation of the real 
 estate or its value does not create a warranty. 

    (c) Any conveyance of a unit transfers to the purchaser all 
 express warranties. 

    HIST: 1993 c 222 art 4 s 12 

     515B.4-113 Implied warranties. 

    (a) A declarant warrants to a purchaser that a unit will be 
 in at least as good condition at the earlier of the time of the 
 conveyance or delivery of possession as it was at the time of 
 contracting, reasonable wear and tear excepted. 

    (b) A declarant warrants to a purchaser that: 

    (1) a unit and the common elements in the common interest 
 community are suitable for the ordinary uses of real estate of 
 its type; and 

    (2) any improvements subject to use rights by the 
 purchaser, made or contracted for by the declarant, or made by 
 any person in contemplation of the creation of the common 
 interest community, will be (i) free from defective materials 
 and (ii) constructed in accordance with applicable law, 
 according to sound engineering and construction standards, and 
 in a workmanlike manner. 

    (c) In addition, a declarant warrants to a purchaser of a 
 unit which under the declaration is available for residential 
 use that the residential use will not violate applicable law at 
 the earlier of the time of conveyance or delivery of possession. 

    (d) Warranties imposed by this section may be excluded or 
 modified only as specified in section 515B.4-114. 

    (e) For purposes of this section, improvements made or 
 contracted for by an affiliate of a declarant are made or 
 contracted for by the declarant. 

    (f) Any conveyance of a unit transfers to the purchaser all 
 implied warranties. 

    (g) This section does not in any manner abrogate the 
 provisions of chapter 327A relating to statutory warranties for 
 housing, or affect any other cause of action under a statute or 
 the common law. 

    HIST: 1993 c 222 art 4 s 13 

     515B.4-114 Exclusion or change of implied warranties. 

    (a) With respect to a unit available for residential use, 
 no general disclaimer of implied warranties is effective, but a 
 declarant may disclaim liability in an instrument separate from 
 the purchase agreement signed by the purchaser for a specified 
 defect or specified failure to comply with applicable law, if 
 the defect or failure entered into and became a part of the 
 basis of the bargain. 

    (b) With respect to a unit restricted to nonresidential 
 use, implied warranties: 

    (1) may be excluded or modified by agreement of the 
 parties; and 

    (2) are excluded by expression of disclaimer, such as "as 
 is," "with all faults," or other language that in common 
 understanding calls the purchaser's attention to the exclusion 
 of warranties. 

    HIST: 1993 c 222 art 4 s 14 

     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. 

    HIST: 1993 c 222 art 4 s 15; 1999 c 11 art 2 s 31; 2005 c 121 
 s 42 

     515B.4-116 Rights of action; attorney's fees. 

    (a) In addition to any other rights to recover damages, 
 attorney's fees, costs or expenses, whether authorized by this 
 chapter or otherwise, if a declarant or any other person 
 violates any provision of this chapter, or any provision of the 
 declaration, bylaws, or rules and regulations any person or 
 class of persons adversely affected by the failure to comply has 
 a claim for appropriate relief.  The association shall have 
 standing to pursue claims on behalf of the unit owners of two or 
 more units.  

    (b) The court may award reasonable attorney's fees and 
 costs of litigation to the prevailing party.  Punitive damages 
 may be awarded for a willful failure to comply. 

    (c) The remedies provided for under this chapter are not 
 exclusive and do not abrogate any remedies under other statutes 
 or the common law, notwithstanding whether those remedies are 
 referred to in this chapter. 

    HIST: 1993 c 222 art 4 s 16 

     515B.4-117 Labeling of promotional material. 

    No promotional material may be displayed or delivered to 
 prospective purchasers which describes or portrays an 
 improvement that is not in existence unless the description or 
 portrayal of the improvement in the promotional material is 
 conspicuously labeled or identified either as "MUST BE BUILT" or 
 as "NEED NOT BE BUILT". 

    HIST: 1993 c 222 art 4 s 17 

     515B.4-118 Declarant's obligation to complete and 
  restore. 

    (a) Except for improvements labeled "NEED NOT BE BUILT", 
 the declarant shall complete all improvements depicted on any 
 CIC plat prepared pursuant to section 515B.2-110, whether or not 
 the plat is contained in the disclosure statement. 

    (b) The declarant is liable for the prompt repair and 
 restoration of any portion of the common interest community 
 damaged by the declarant's exercise of any special declarant 
 rights. 

    HIST: 1993 c 222 art 4 s 18