2006 Minnesota Statutes

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