2001 Minnesota Statutes

     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 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.  The directors of a master association shall be 
 elected or, if a nonprofit corporation, elected or appointed, in 
 a manner consistent with the requirements of the statute under 
 which the master association is formed and of the master 
 association's articles of incorporation and bylaws, and subject 
 to the following requirements: 

    (1) Except as set forth in subsections (2) and (3), the 
 members of the master association shall elect the board of 
 directors.  A majority of the directors shall be members of the 
 master association or members of a member of the master 
 association, and shall be persons other than a declarant or 
 affiliate of a declarant.  If the member is not a natural 
 person, it may designate a natural person to act on its behalf. 

    (2) The articles of incorporation or bylaws of the master 
 association may authorize a person other than a member of the 
 master association or a unit owner, including a declarant, to 
 appoint or elect one director.  

    (3) A master association's articles of incorporation may 
 suspend the members' right to elect or, in the case of a 
 nonprofit corporation, elect or appoint, the master 
 association's board of directors for a specified time period.  
 During this period, the person or persons who execute the master 
 declaration under subsection (f)(1), or their successors or 
 assigns, may appoint the directors.  The period during which the 
 person or persons may appoint the directors begins when the 
 master declaration is recorded and terminates upon the earliest 
 of: 

    (i) the voluntary surrender of the right to appoint 
 directors; 

    (ii) the date ten years after the date the master 
 declaration is recorded; 

    (iii) the date, if any, in the articles of incorporation; 
 or 

    (iv) the date when at least 75 percent of the associations 
 that are members of the master association or whose members are 
 members of the master association are controlled by their 
 members.  An association's members control the association when 
 they have the right to elect or appoint a majority of the 
 association's voting directors. 

    (4) The term of any director appointed under subsection (3) 
 expires 60 days after the right to appoint directors 
 terminates.  The master association's board of directors shall 
 call an annual or special meeting of the master association's 
 members to elect or appoint successor directors within the 
 60-day period. 

    (5) The system for the election of directors shall be fair 
 and equitable and shall take into account the number of members 
 of each association any of whose powers are delegated to the 
 master association, the needs of the members of the master 
 association, the allocation of liability for master association 
 common expenses, and the types of common interest communities 
 and other real estate subject to the master association. 

    (d) The articles of incorporation or bylaws of the master 
 association may authorize special classes of directors and 
 allocations of director voting rights, as follows:  (i) classes 
 of directors that are elected by different classes of members, 
 to address operational, physical, or administrative differences 
 within the master association, or (ii) class voting by the 
 classes of directors on specific issues affecting only a certain 
 class or classes of members or units, or 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 powers to be exercised by the 
 master association on behalf of its members and on behalf of the 
 members of its members in the case of members that are common 
 interest communities.  The provisions of the master declaration 
 with respect to the grant and exercise of powers for common 
 interest communities subject to the master association shall be 
 consistent with the declarations of the common interest 
 communities that delegate powers to the master association; 

    (vi) a description of the formula governing the allocation 
 of assessments and member voting rights, including any special 
 classes or allocations referred to in subsection (d); and 

    (vii) the requirements for amendment of the master 
 declaration, other than an amendment under subsection (g). 

    (2) The declaration of a common interest community subject 
 to the master association shall contain provisions delegating, 
 or authorizing the delegation of, powers to the master 
 association in accordance with subsection (f)(3).  The 
 provisions of the declarations relating to the delegation shall 
 be consistent with the provisions of the master declaration 
 granting or reserving those powers to the master association.  

    (3) The declaration may: 

    (i) delegate any of the powers described in section 
 515B.3-102 to a master association.  A delegation of the powers 
 described in section 515B.3-102(a)(2) is effective only if 
 expressly stated in the declaration; and 

    (ii) authorize the board to delegate any of the powers 
 described in section 515B.3-102, except for the powers described 
 in section 515B.3-102(a)(2), to a master association. 

    (4) With respect to any other property subject to a master 
 association, there need not be an instrument other than the 
 master declaration recorded against the property to empower the 
 master association to exercise powers with respect to the 
 property. 

    (5) If a declaration or other recorded instrument 
 authorizes a board or owner to delegate powers to a master 
 association, the master association board may refuse any 
 delegation of powers that does not comply with (i) this chapter, 
 (ii) the declaration or other recorded instrument, or (iii) the 
 organizational documents of the master association. 

    (6) The failure of a declaration, a board or an owner of 
 property subject to a master association to properly delegate 
 some or all of the powers to the master association does not 
 affect the authority of the master association to exercise those 
 and other powers with respect to other common interest 
 communities or owners of properties that are subject to the 
 master association. 

    (g) The master declaration may authorize other real estate 
 to be subjected to the master declaration.  The other real 
 estate shall be subjected to the master declaration by an 
 amendment executed by the owner of the other real estate and 
 approved in writing by the person who executed the master 
 declaration, if other than the owner of the other real estate. 

    (h) Sections 515B.3-103, 515B.3-108, 515B.3-109, 
 515B.3-110, and 515B.3-112 shall apply in the conduct of the 
 affairs of a master association.  But the rights of voting, 
 notice, and other rights enumerated in those sections apply only 
 to persons who elect or appoint the board of a master 
 association, whether or not those persons are otherwise unit 
 owners within the meaning of this chapter. 

    (i) If so provided in the master declaration, a master 
 association may levy assessments for common expenses of the 
 master association against the property subject to the master 
 declaration, and have and foreclose liens securing the 
 assessments.  The liens shall have the same priority against 
 secured parties, shall include the same fees and charges, and 
 may be foreclosed in the same manner, as assessment liens under 
 section 515B.3-116.  The master association's lien shall have 
 priority as against the lien of an association or property 
 owner's association subject to the master association, 
 regardless of when the lien arose or was perfected. 

    (1) Master association common expenses shall be allocated 
 among the members of the master association in a fair and 
 equitable manner.  If the members are associations or property 
 owners' associations, then the master assessments may be 
 allocated among and levied directly against the units or other 
 parcels owned by the members of the association or property 
 owner's association.  If so provided in the master declaration, 
 master assessments levied against a member association or 
 property owner's association are allocated among and levied 
 against the units or other parcels owned by the members of the 
 association or property owner's association.  If applicable and 
 appropriate, the formulas and principles described in section 
 515B.2-108, subsections (b), (c), (d), and (e), shall be used in 
 making the allocations.  The assessment formulas and procedures 
 described in the declarations of any common interest communities 
 or any instruments governing other real estate subject to the 
 master association shall not conflict with the formulas and 
 procedures described in the master declaration. 

    (2) The master declaration may exempt from liability any 
 person authorized by subsection (c)(3) to appoint the members of 
 the master association board for master association common 
 expenses, and exempt any unit owned by the person from a lien 
 for such common expenses, until a dwelling constituting or 
 located within the unit is substantially completed.  Substantial 
 completion shall be evidenced by a certificate of occupancy in a 
 jurisdiction that issues that certificate. 

    (j) A master association shall not be used, directly or 
 indirectly, to avoid or nullify any warranties or other 
 obligations for which a declarant of a common interest community 
 subject to the master association is responsible, or to 
 otherwise avoid the requirements of this chapter. 

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