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Office of the Revisor of Statutes

CHAPTER 515B. MINNESOTA COMMON INTEREST OWNERSHIP ACT

Table of Sections
SectionHeadnote
515B.1-100APPLICATION OF LAWS 2005, CHAPTER 56, TERMINOLOGY CHANGES.

ARTICLE 1

APPLICABILITY, DEFINITIONS AND OTHER GENERAL PROVISIONS

515B.1-101SHORT TITLE.
515B.1-102APPLICABILITY.
515B.1-103DEFINITIONS.
515B.1-104VARIATION BY AGREEMENT.
515B.1-105SEPARATE TITLES AND TAXATION.
515B.1-106APPLICABILITY OF LOCAL REQUIREMENTS.
515B.1-107EMINENT DOMAIN.
515B.1-108THIS CHAPTER PREVAILS; SUPPLEMENTAL LAW.
515B.1-109CONSTRUCTION AGAINST IMPLICIT REPEAL.
515B.1-110Repealed, 1996 c 310 s 1
515B.1-111Repealed, 1996 c 310 s 1
515B.1-112UNCONSCIONABLE AGREEMENT OR TERM OF CONTRACT.
515B.1-113OBLIGATION OF GOOD FAITH.
515B.1-114REMEDIES TO BE LIBERALLY ADMINISTERED.
515B.1-115NOTICE.
515B.1-116RECORDING.

ARTICLE 2

CREATION, ALTERATION AND TERMINATION

515B.2-101CREATION OF COMMON INTEREST COMMUNITIES.
515B.2-102UNIT BOUNDARIES.
515B.2-103CONSTRUCTION AND VALIDITY OF DECLARATION AND BYLAWS.
515B.2-104DESCRIPTION OF UNITS.
515B.2-105DECLARATION CONTENTS; ALL COMMON INTEREST COMMUNITIES.
515B.2-106DECLARATION OF FLEXIBLE COMMON INTEREST COMMUNITIES.
515B.2-107DECLARATION OF LEASEHOLD COMMON INTEREST COMMUNITIES.
515B.2-108ALLOCATION OF INTERESTS.
515B.2-109COMMON ELEMENTS AND LIMITED COMMON ELEMENTS.
515B.2-110COMMON INTEREST COMMUNITY PLAT (CIC PLAT).
515B.2-111EXPANSION OF FLEXIBLE COMMON INTEREST COMMUNITY.
515B.2-112SUBDIVISION, COMBINATION, OR CONVERSION OF UNITS.
515B.2-113ALTERATIONS OF UNITS.
515B.2-114RELOCATION OF BOUNDARIES BETWEEN ADJOINING UNITS.
515B.2-115MINOR VARIATIONS IN BOUNDARIES.
515B.2-116USE FOR SALES PURPOSES.
515B.2-117DECLARANT'S EASEMENT RIGHTS.
515B.2-118AMENDMENT OF DECLARATION.
515B.2-119TERMINATION OF COMMON INTEREST COMMUNITY.
515B.2-120RIGHTS OF SECURED PARTIES.
515B.2-121MASTER ASSOCIATIONS.
515B.2-122MERGER OR CONSOLIDATION OF COMMON INTEREST COMMUNITIES.
515B.2-123CHANGE OF FORM OF COMMON INTEREST COMMUNITY.
515B.2-124SEVERANCE OF COMMON INTEREST COMMUNITY.
515B.2-125ADDITION OF COMMON ELEMENTS.

ARTICLE 3

ORGANIZATION AND OPERATION

515B.3-101ORGANIZATION OF UNIT OWNERS' ASSOCIATION.
515B.3-102POWERS OF UNIT OWNERS' ASSOCIATION.
515B.3-103BOARD OF DIRECTORS, OFFICERS AND DECLARANT CONTROL.
515B.3-104TRANSFER OF SPECIAL DECLARANT RIGHTS.
515B.3-105TERMINATION OF CONTRACTS, LEASES.
515B.3-106BYLAWS; ANNUAL REPORT.
515B.3-107UPKEEP OF COMMON INTEREST COMMUNITY.
515B.3-108MEETINGS.
515B.3-109QUORUMS.
515B.3-110VOTING; PROXIES.
515B.3-111TORT AND CONTRACT LIABILITY.
515B.3-112CONVEYANCE OF, OR CREATION OF SECURITY INTERESTS IN, COMMON ELEMENTS.
515B.3-113INSURANCE.
515B.3-114RESERVES; SURPLUS FUNDS.
515B.3-115ASSESSMENTS FOR COMMON EXPENSES.
515B.3-116LIEN FOR ASSESSMENTS.
515B.3-117OTHER LIENS.
515B.3-118ASSOCIATION RECORDS.
515B.3-119ASSOCIATION AS TRUSTEE.
515B.3-120DECLARANT DUTIES; TURNOVER OF RECORDS.
515B.3-121ACCOUNTING CONTROLS.

ARTICLE 4

PROTECTION OF PURCHASERS

515B.4-101APPLICABILITY; DELIVERY OF DISCLOSURE STATEMENT.
515B.4-102DISCLOSURE STATEMENT; GENERAL PROVISIONS.
515B.4-103COMMON INTEREST COMMUNITIES SUBJECT TO RIGHTS TO ADD ADDITIONAL REAL ESTATE.
515B.4-104TIME SHARES.
515B.4-105COMMON INTEREST COMMUNITY WITH BUILDING ONCE OCCUPIED.
515B.4-106PURCHASER'S RIGHT TO CANCEL.
515B.4-107RESALE OF UNITS.
515B.4-108PURCHASER'S RIGHT TO CANCEL RESALE.
515B.4-109ESCROW DEPOSITS.
515B.4-110OBLIGATION TO RELEASE LIENS.
515B.4-111CONVERSION PROPERTY.
515B.4-112EXPRESS WARRANTIES.
515B.4-113IMPLIED WARRANTIES.
515B.4-114EXCLUSION OR CHANGE OF IMPLIED WARRANTIES.
515B.4-115STATUTE OF LIMITATIONS FOR WARRANTIES.
515B.4-116RIGHTS OF ACTION; ATTORNEY'S FEES.
515B.4-117LABELING OF PROMOTIONAL MATERIAL.
515B.4-118DECLARANT'S OBLIGATION TO COMPLETE AND RESTORE.
515B.1-100 APPLICATION OF LAWS 2005, CHAPTER 56, TERMINOLOGY CHANGES.
State agencies shall use the terminology changes specified in Laws 2005, chapter 56, section
1, when printed material and signage are replaced and new printed material and signage are
obtained. State agencies do not have to replace existing printed material and signage to comply
with Laws 2005, chapter 56, sections 1 and 2. Language changes made according to Laws 2005,
chapter 56, sections 1 and 2, shall not expand or exclude eligibility to services.
History: 2005 c 56 s 3

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.
History: 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 CIC 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 CIC 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.4-101(e) applies to any platted lot or other parcel of real estate that is
subject to a master declaration and is not subject to or is exempt from this chapter.
(g) Section 515B.1-106 shall apply to all common interest communities.
History: 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; 2006 c 221 s 7
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 owners' 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.
History: 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.
History: 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.
History: 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 that prohibits the conversion of
buildings to the common interest community form of ownership shall not be effective for a
period exceeding 18 months.
History: 1993 c 222 art 1 s 6; 2005 c 121 s 3; 2006 c 221 s 8
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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 1993 c 222 art 2 s 1; 1999 c 11 art 2 s 4; 2005 c 121 s 6; 2006 c 221 s 9
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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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 registered land survey complying with subsection (d),
or any combination thereof. The CIC plat or registered land survey 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, 508, or 508A, as applicable; and
(2) comply with the applicable subdivision 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.
History: 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; 2006 c 221 s 10
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.
History: 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. If an application under this subsection is approved, the unit owner shall cause an
amendment and amended CIC plat to be prepared based upon the approved application.
(c) An amendment under this section 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, if approved under subsection (b);
(2) assign a unit identifier to each unit resulting from the subdivision, conversion, 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, converted, or
subdivided among the unit or units resulting from the subdivision or combination, or among all
units in the case of a conversion, as applicable, 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)(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.
History: 1993 c 222 art 2 s 12; 2005 c 121 s 14; 2006 c 221 s 11
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 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.
History: 1993 c 222 art 2 s 13; 1999 c 11 art 2 s 10; 2005 c 56 s 1; 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
(l) 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.
History: 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.
History: 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 owners' 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 owners' 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 owners' 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
private ownership and use 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 owners' 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 owners' 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 owners' associations, then the master assessments may be allocated among and levied
against the associations or property owners' associations, or allocated among and levied against
the units or other parcels of real estate owned by the members of the association or property
owners' association. If so provided in the master declaration, master assessments levied against a
member association or property owners' association are allocated among and levied against
the units or other parcels of real estate owned by the members of the association or property
owners' 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.
History: 1993 c 222 art 2 s 21; 1999 c 11 art 2 s 13; 2005 c 121 s 18; 2006 c 221 s 12
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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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 declarant
control, to make up any operating deficit incurred by the association during the period of declarant
control. The existence and amount, if any, of the operating deficit shall be determined using the
accrual basis of accounting applied as of the date of termination of the period of declarant control,
regardless of the accounting methodology previously used by the association to maintain its
accounts.
(b) The replacement reserve component of the common expenses shall be funded for
each unit in accordance with the projected annual budget required by section 515B.4-102(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.
History: 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; 2006 c 221 s 13
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.
History: 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 5, or 508A.351,
subdivision 5
. 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.
History: 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; 2006 c 221 s 14
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.
History: 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.
History: 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.
History: 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.
History: 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 shall provide to the buyer, pursuant
to Minnesota Statutes, section 515B.4-102(c), upon the buyer'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 buyer signs a purchase agreement for the real estate.
The statement contains important information regarding the master association and the buyer's
obligations thereunder." A claim by a buyer 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 buyer.
History: 1993 c 222 art 4 s 1; 1999 c 11 art 2 s 25; 2005 c 121 s 34; 2006 c 221 s 15
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(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 ten days after the receipt of a disclosure statement, a
purchaser may cancel any contract for the purchase of a unit from a declarant; provided, that the
right to cancel terminates upon the purchaser's voluntary acceptance of a conveyance of the unit
from the declarant or by the purchaser agreeing to modify or waive the right to cancel in the
manner provided by section 515B.4-106(a); (ii) if a purchaser receives a disclosure statement
more than ten days before signing a purchase agreement, the purchaser cannot cancel the purchase
agreement; and (iii) if a declarant obligated to deliver a disclosure statement fails to deliver a
disclosure statement which substantially complies with this chapter to a purchaser to whom a unit
is conveyed, the declarant shall be liable to the purchaser as provided in section 515B.4-106(d);
(13) a statement disclosing to the extent of the declarant's or an affiliate of a declarant's
actual knowledge, after reasonable inquiry, any unsatisfied judgments or lawsuits to which the
association is a party, and the status of those lawsuits which are material to the common interest
community or the unit being purchased;
(14) a statement (i) describing the conditions under which earnest money will be held in
and disbursed from the escrow account, as set forth in section 515B.4-109, (ii) that the earnest
money will be returned to the purchaser if the purchaser cancels the contract pursuant to section
515B.4-106, and (iii) setting forth the name and address of the escrow agent;
(15) a detailed description of the insurance coverage provided by the association for the
benefit of unit owners, including a statement as to which, if any, of the items referred to in section
515B.3-113, subsection (b), are insured by the association;
(16) any current or expected fees or charges, other than assessments for common expenses, to
be paid by unit owners for the use of the common elements or any other improvements or facilities;
(17) the financial arrangements, including any contingencies, which have been made to
provide for completion of all improvements that the declarant is obligated to build pursuant to
section 515B.4-118, or a statement that no such arrangements have been made;
(18) in a cooperative: (i) whether the unit owners will be entitled for federal and state tax
purposes, to deduct payments made by the association for real estate taxes and interest paid to the
holder of a security interest encumbering the cooperative; (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 buyer 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 buyer 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.
History: 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; 2006 c 221 s 16
515B.4-103 COMMON INTEREST COMMUNITIES SUBJECT TO RIGHTS TO ADD
ADDITIONAL REAL ESTATE.
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.
History: 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.
History: 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.
History: 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).
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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.
History: 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".
History: 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.
History: 1993 c 222 art 4 s 18