2006 Minnesota Statutes

515A.2-120 TERMINATION OF CONDOMINIUM.
(a) Except in the case of a taking of all the units by eminent domain (section 515A.1-107),
a condominium 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 the 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 in
the condominium are restricted exclusively to nonresidential uses.
(b) An agreement of unit owners and mortgagees to terminate a condominium must be
evidenced by their execution of a termination agreement or ratification thereof. If, pursuant to a
termination agreement, the real estate constituting the condominium is to be sold following
termination, the termination agreement shall set forth the terms of the sale. A termination
agreement and all ratifications thereof shall be effective upon recording in every county in which
a portion of the condominium is situated.
(c) If the termination agreement provides that the real estate constituting the condominium is
to be sold following termination, title to that real estate, upon termination, vests in the association
as trustee for the holders of all interests in the units. The association as trustee thereafter has
all powers necessary and appropriate to effect the sale. Until the sale has been concluded and
the proceeds thereof distributed, the association continues in existence with all powers and
responsibilities it had before termination whether under the declaration or otherwise. Unless the
termination agreement otherwise provides, proceeds of the sale shall be paid to the association as
trustee and shall be distributed to the unit owners and holders of an interest as security for an
obligation as their interests may appear and according to the priority enjoyed prior to termination
in proportion to the respective interests of unit owners as provided in subsection (f). Any interest
as security for an obligation formerly affecting a unit shall constitute a claim against the proceeds
in the amount existing at the time of termination plus interest and other amounts accrued until
distribution. Except as otherwise specified in the termination agreement, as long as the association
as trustee holds title to the real estate, each unit owner and successors in interest have the right to
use the real estate that formerly constituted the common elements and have an exclusive right to
occupancy of the portion of the real estate that formerly constituted the unit and limited common
elements. During the period of such occupancy, each unit owner and successors in interest remain
liable for all assessments and other obligations imposed on unit owners by sections 515A.1-101
to 515A.4-117, the declaration, or the termination agreement.
(d) If the real estate constituting the condominium is not to be sold following termination,
title to the real estate, upon termination, vests in the unit owners as tenants in common in
proportion to their respective interests as provided in subsection (f). Any interests held as security
for an obligation and the respective instruments formerly affecting a unit shall be deemed to be an
interest affecting the resulting undivided interest in the same manner as they formerly affected
the unit. As long as the tenancy in common exists, each unit owner and successors in interest
have an exclusive right to occupancy of the portion of the real estate that formerly constituted
that unit owner's unit and limited common elements. Unless the termination agreement otherwise
provides during the period of tenancy in common, the cotenants and the association shall have the
rights and obligations under sections 515A.1-101 to 515A.4-117, the declaration and bylaws and
the termination agreement.
(e) Following termination of the condominium, and after payment of or provision for the
claims of the association's creditors, the assets of the association shall be distributed to unit
owners and holders of an interest as security for an obligation in proportion to their respective
interests as provided in subsection (f). The proceeds of sale described in subsection (c) and held
by the association as trustee are not assets of the association.
(f) The respective interests of unit owners referred to in subsections (c), (d), and (e) are
as follows:
(1) except as provided in paragraph (2), the respective interests of unit owners are the
fair market values of their units, limited common elements, and common element interests
immediately before the termination, as determined by one or more independent appraisers
selected by the association. The decision of the independent appraisers shall be delivered in the
manner provided in section 515A.1-115 addressed to the "Occupant Entitled to Legal Notice" at
each unit and the first mortgagee of each unit at its last known address and becomes final unless
disapproved within 30 days after delivery by unit owners of units to which 25 percent of the votes
in the association are allocated or by 25 percent of the first mortgagees, each mortgagee having
one vote per unit financed. The proportion of any unit owner's interest to that of all unit owners
is determined by dividing the fair market value of that unit owner's interest by the total fair
market values of the interests of all unit owners.
(2) if any unit is destroyed to the extent that an appraisal of the fair market value thereof prior
to destruction cannot be made and there is not satisfactory evidence to afford such an appraisal,
the interests of all unit owners are their respective common element interests immediately before
the termination.
History: 1980 c 582 art 2 s 515.2-120; 1986 c 444