2007 Minnesota Statutes

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