2001 Minnesota Statutes

     515B.3-103 Duty of board, officers during, after 
  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) Subject to subsection (d), 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 maximum period of declarant control may extend from the date 
 of the first conveyance of a unit to a unit owner other than a 
 declarant for a period not exceeding five years in the case of a 
 flexible common interest community or three years in the case of 
 any other common interest community.  Regardless of any longer 
 period provided in the declaration or elsewhere, a period of 
 declarant control shall terminate upon the earlier of (i) 
 surrender of control by the declarant or (ii) 60 days after 
 conveyance of 75 percent of the units to unit owners other than 
 a declarant. 

    (d) Not later than 60 days after conveyance of 50 percent 
 of the units that may be created to unit owners other than a 
 declarant or an affiliate of a declarant, a meeting of the unit 
 owners shall be held 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 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 which has been conveyed shall be calculated based upon the 
 assumption that all units which the declarant has built or 
 reserved the right to build in the declaration are included in 
 the common interest community.  The percentages referred to in 
 subsections (c) and (d) shall be calculated without reference to 
 units that are auxiliary to other units, such as garage units or 
 storage units.  A person shall not use a master association or 
 other device to evade the requirements of this section. 

    (g) Except as otherwise provided in this subsection, 
 meetings of the board of directors must be open to the unit 
 owners.  To the extent practicable, the board shall give 
 reasonable notice to the unit owners of the date, time, and 
 place of a board meeting.  If the date, time, and place of 
 meetings are provided for in the declaration, articles, or 
 bylaws, announced at a previous meeting of the board, posted in 
 a location accessible to the unit owners and designated by the 
 board from time to time, or if an emergency requires immediate 
 consideration of a matter by the board, notice is not required.  
 "Notice" has the meaning given in section 317A.011, subdivision 
 14.  Meetings may be closed to discuss the following: 

    (1) personnel matters; 

    (2) pending or potential litigation, arbitration or other 
 potentially adversarial proceedings, between unit owners, 
 between the board or association and unit owners, or other 
 matters in which any unit owner may have an adversarial 
 interest, if the board determines that closing the meeting is 
 necessary to discuss strategy or to otherwise protect the 
 position of the board or association or the privacy of a unit 
 owner or occupant of a unit; or 

    (3) criminal activity arising within the common interest 
 community if the board determines that closing the meeting is 
 necessary to protect the privacy of the victim or that opening 
 the meeting would jeopardize investigation of the activity.  

    Nothing in this subsection imposes a duty on the board to 
 provide special facilities for meetings.  The failure to give 
 notice as required by this subsection shall not invalidate the 
 board meeting or any action taken at the meeting.  The minutes 
 of any part of a meeting that is closed under this subsection 
 may be kept confidential at the discretion of the board. 

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