Notable Laws Passed in 2023 Affecting Minnesota Community Associations

There have been some recent developments in Minnesota law that are likely to affect Minnesota’s homeowners’ associations and property management companies. As you review the changes discussed briefly below, consider how they might affect your association or management company, and plan accordingly. Smith Jadin Johnson is prepared to help with any advice, document review, or necessary updates related to these developments.

Legalization of Cannabis

Minnesota Governor Tim Walz recently signed Bill HF 100 into law, legalizing recreational cannabis in Minnesota. Portions of the law will go into effect on July 1, and August 1, 2023, relating to recreational use.

For associations that have banned smoking throughout their property (including within individual units) in their Declarations, depending on how your smoking ban is written, it will likely apply to smoking cannabis as well. Associations with full smoking bans will therefore likely be the least affected by this change, assuming their governing documents provide an enforcement mechanism for violations.

For all other associations, that either allow smoking throughout the property or only ban smoking in the common areas (but allow smoking within individual units), the law still prohibits smoking of cannabis in Units within multifamily buildings, which likely includes all condos and townhomes. If your association is apprehensive about this change, it may be time to contact SJJ to help review your governing documents. The law also creates potential liability for associations who do not enforce their governing documents related to cannabis use. SJJ can help review your association’s governing documents to determine what responsibilities your association may have in this regard.

Additionally, homeowners, including those in homeowner associations, may grow up to 8 cannabis plants, with 4 being mature (flowering) at any given time, so long as it is at the owner’s primary residence, and they are grown “in an enclosed, locked space that is not open to public view.” The smell of marijuana plants is strong, particularly during flowering. Associations may want to address this, including prohibiting owners from growing marijuana in their Units, which would require a declaration amendment.

SJJ is happy to review your Declaration and provide an opinion on how legalization of cannabis might impact your association specifically. Additionally, SJJ is well versed in amending Declarations, and we are happy to provide a quote to amend your Declaration to address this issue. Please contact our office with any questions.

Solar Panels in Single-Family Associations

Governor Walz also recently signed a bill into law that relevantly relates to solar panels in single-family associations. This law, which went into effect the day following final enactment, generally prohibits single-family associations from refusing to permit a unit owner from installing a roof-mounted solar energy system.

Single-family associations may require (1) installation by a licensed contractor; (2) that the roof-mounted system does not extend above the peak of a pitched roof or beyond the edge of a roof; (3) that the owner or installer of the solar energy system indemnify or reimburse the association for loss or damage caused by installation, maintenance, etc. of the system; (4) that the owner list the association as a certificate holder on the owner’s insurance policy; (5) that the owner be responsible for removing the system if necessary to repair or maintain common elements.

Single-family associations may also impose reasonable restrictions related to installation, maintenance, and use of solar systems, provided that the restrictions do not decrease the system’s projected energy generation by more than ten percent and do not increase the cost by certain amounts, depending on which type of system is installed. Single-family associations may obtain alternative bids or designs for these purposes. Associations should be aware that there are ARC approval provisions as well, including a 60-day response requirement once a request has been submitted and a requirement that the response be in writing.

The bottom line is that single-family associations cannot prohibit roof-mounted solar energy systems, but they may impose certain requirements and restrictions for their installation, maintenance, and use. SJJ can help your association develop these requirements and restrictions to ensure they are appropriate and enforceable.

Updates to MCIOA Related to Fines and Collections

The first provision prevents associations from assessing legal fees to a unit owner related to fines for violation of the governing documents if, after notice and an opportunity to be heard by the board, the board decides not to uphold the fine. In other words, if the Board conducts a hearing and drops the fine, the association may not assess any legal fees related to that fine. After a requested hearing regarding a fine, assuming the Board decides to keep the fine, the Board must adopt a written resolution levying or upholding the fine to confirm and document the decision.

Additionally, levies of assessments for owner-created damage to common elements or other units or levies of fines must be accompanied by a written notice that includes specific information related to the fine, the reason for the fine, and the right to be heard by the board, among other details. Have SJJ review your violation and fine policies and notices, as well as collection practices, to ensure they comply with this provision.

The other provisions limit which portions of assessments may be included in the amount a homeowner must pay to reinstate prior to a foreclosure sale. Associations may not include any accelerated assessments or attorneys’ fees and costs in the amount an owner would need to pay in order to reinstate under the foreclosure statute. However, if a foreclosure sale goes through without reinstatement by the owner, then the redemption amount can include attorney fees.

While these provisions will likely affect association collection of assessments and foreclosure of assessment liens, SJJ will continue to guide your association through the collections process and handle any added difficulties that may arise.

With this blog, we hope to keep our clients aware of legal changes that impact our clients. SJJ is happy to review any documents and provide an opinion as to how any of these updates might affect your association specifically. Please contact our office with any questions.