House lawmakers show support for legislation limiting reach of HOAs

More than 1 million Minnesotans live under a homeowners association, and 86% say they are very happy with the results.

But when association boards or the managers they hire are ineffective, a homeowner can find a $56 fine turn into a foreclosure notice.

Time and again members of a legislative working group examining homeowners associations heard stories of homeowners being billed $2,000 in legal fees for asking a simple question, paying for roof repairs scheduled before a hailstorm hit, and receiving $20,000 assessments for septic repairs with no way to arrange a payment plan.

Even more troubling, say work group members, homeowners have no legal recourse to contest even egregious oversteps by property managers.

Addressing these issues is the goal of HF1268, which, as amended, was approved on a voice vote by the House Housing Finance and Policy Committee Tuesday and sent to the House Judiciary Finance and Civil Law Committee.

The bill aims to establish guidelines so the dream of home ownership doesn’t turn into a nightmare, said Rep. Kristin Bahner (DFL-Maple Grove), the bill sponsor, adding it would put common sense guardrails in place and would ensure board members know what their responsibilities are. 

Provisions in the bill are based on recommendations made by the Working Group on Common Interest Communities and Homeowners Associations established by the Legislature last year.

The bipartisan, bicameral group met more than 10 times since Sept. 1, 2024, culminating in a consensus list of 41 recommendations. Some that come with a price tag, such as establishing an ombudsman in the attorney general’s office, are traveling in separate bills.

[MORE: Watch a presentation of the working group’s findings and a press conference announcing the proposed legislation]

Provisions in the bill would set conflict of interest standards, outlaw excessive fines and fees, ensure association rules meet a reasonableness standard, offer pathways to resolve disputes early, and limit the use of foreclosure as an enforcement tool.

Other provisions in the bill would:

• require the creation of a schedule of fees, fines and charges;
• make it easier to end a common interest community or homeowners association;
• eliminate some parking restrictions such as those that prohibit homeowners from parking their work vehicle in their own driveway; and
• prohibit local governments from predicating development approval on the creation of a homeowner's association.

While applauding the intent of the law, several people said the bill would remove protections for people who are following their association’s rules.

Due to caps specified in the bill, fines would be considered the cost of doing business by rulebreakers. Board members said they are struggling to pay for garbage collections because so many residents are not paying their dues.  

Moreover, it would overburden volunteer board members, said Rep. Wayne Johnson (R-Cottage Grove). He served on his homeowners association board and was more than happy to get off his board because of the hassles.

“If you’re going to make it harder and harder to volunteer, what happens when these HOAs dissolve because no one will do it?” he said.