Minnesota proposes HOA reforms

When it comes to HOAs, Sarah Conlow believes in accountability.

“Times are tough, and if you’re going to increase dues, or if there’s going to be unnecessary fees, homeowners deserve to know that,” she says.

Last summer, Conlow unsuccessfully sued her Lakeville HOA, asking a judge to put a hold on payments for a $17,000 roof repair job she says she didn’t need.

“We got the notice that our roofs were being replaced, and that we’d have to pay $17,000,” she recalls. “Then, in a number of days, roofing materials showed up.”

So now, Conlow says she’s happy to learn that an HOA “Bill of Rights” has passed in the Minnesota Senate and has bipartisan support in the House.

“You know, I put things into three major buckets,” explains Rep. Kristin Bahner, DFL-Maple Grove. “Sort of the idea of transparency, best practices, and consumer protection.”

HOAs are huge in Minnesota — there are about 8,000 of them statewide.

The House bill would require property managers or HOA boards to obtain three bids for maintenance or construction projects, prevent board members from voting on contracts that benefit them or their families, and require boards to create a list of fines for violations, capped at $100.

One section would refer HOA disputes to the new ombudsperson office at the Department of Commerce.

“‘Did we follow the proper procedures? ‘Did we get multiple bids, did we make sure that everything was above board, did we get the best deal that we could for the homeowners?’” Bahner asks. “We want to balance the flexibility of boards and property managers with the needs of consumers and make sure we’re doing justice to both sides of that equation.”

But the HOA Leadership Network, an educational association representing about 1,000 Minnesota HOAs, opposes the legislation.

Co-owner Mark Foster says the measure, “Really takes control away from these board leaders who are in a voluntary position… And also hamstrings them when it comes to being able to levy fines, having to pass along legal fees to residents.”

Conlow says that after 147 HOA members in her neighborhood received that $17,000 bill, the total damage came to $2.5 million. They voted the old board out and created a new one that Conlow now sits on.

As for the House legislation, it’s not a done deal yet.

The measure passed a series of committee votes, and the next step is a vote on the House floor.

Bahner says she feels it has a good chance of passage, and Conlow says she, too, is optimistic.  

“I’m in strong support, the proposed changes and the guardrails that they create around HOA boards,” she declares. “Transparency for homeowners and then also the property.”