HF1268

The bill modifies regulations regarding property management companies and common interest communities (CICs) in Minnesota. Key provisions include:

Article 1: Property Management Reforms

• Conflict of Interest Restrictions: Property managers or management companies cannot hire firms they have an ownership interest in (e.g., construction or appraisal firms) without disclosing that interest to property owners at least three days before signing a contract.
  
• Prohibitions on Kickbacks: Property managers cannot accept rebates, incentives, or fees from firms in exchange for awarding contracts or referring clients.
  
• Contract Restrictions: Long-term contracts (over one year) cannot contain automatic renewal clauses requiring more than 30 days' notice for cancellation. Owners may terminate contracts violating this rule with 60 days' notice.
  
• Fine-Based Compensation: Property managers cannot be compensated based on fines collected, nor charge owners fees for collecting such fines.
  
• Legal Remedies: Owners may sue property managers for violations and recover damages, including attorney's fees.
  

Article 2: Changes to Common Interest Communities (CICs)

• Modifications to CIC Governance:
  
  • Adjustments to rights and duties of CICs and unit owners.
    
  • Changes to the process for terminating a CIC.
    
  • A "meet and confer" process is established for dispute resolution.
    
  • New notice requirements for meetings.
    
• Regulation of Homeowners Associations (HOAs):
  
  • Local governing bodies cannot require or incentivize the creation of HOAs in new housing developments.
    
• Expanded Applicability:
  
  • Provisions of chapter 515B are clarified and expanded to apply to more types of common interest communities, including older communities previously exempt.
    
  • Amendments affecting governance structures, financial operations, and dispute resolution are detailed.
    

This bill strengthens protections for property owners, increases transparency in property management, and imposes additional regulatory oversight on common interest communities.