Minnesota has a chance to reform HOAs

As organizations dedicated to affordable homeownership across Minnesota we believe Homeowner Association reforms are urgently needed to protect homeowners We urge the Minnesota Legislature to pass proposed HOA overhaul law this session As of Minnesota ranks th in the U S for the number of homeowners associations with over a quarter of residents living in one Despite having more than HOAs nearly half of which are in the Twin Cities our state lacks sufficient homeowner protections We ve fallen behind other states in protecting HOA homeowners leaving homeowners vulnerable and subject to a vital power imbalance as property management companies and their attorneys can wield broad and often unchecked power We regularly hear from homeowners facing troubling HOA practices A limited issues have become especially common and concerning Without clear standards or accessible procedures to resolve disputes homeowners often must pay legal fees to address even basic concerns an expensive and unrealistic option for plenty of There is no limit to what an HOA can impose as a fine for violations of minor and sometimes unreasonable rules In the Legislature created an HOA Working Group to explore reforms Their recommendations are grounded in rigorous research and locality feedback have bipartisan advocacy and would bring Minnesota in line with plenty of other states HOA laws The proposed reforms in SF HF target the majority of common and egregious issues disclosed by homeowners Governance and Transparency Lack of transparency from HOA boards was a theme in the working group Homeowners stated being charged legal fees or denied when requesting their HOA s financials even though their monthly dues fund them Several informed of being banned from or fined for speaking at HOA board meetings on issues directly affecting them The proposed bill would establish reasonable communication and transparency standards between residents HOA boards and property managers Conflicts of Interest One homeowner shared that their property management company hired businesses that provided kickbacks for utility often at higher costs to HOA homeowners This bill would prohibit such kickbacks require disclosure of conflicts of interest define property managers roles and create accountability for their actions Fines and Fees The working group heard multiple stories of exorbitant HOA fees for infractions or even small fines that ballooned with late fees into foreclosure threats In one matter an HOA management company failed to process a homeowner s auto-payment form for monthly dues leading to an unexpected pre-foreclosure notice to the homeowner a year later with no explanation of the amount owed The homeowner was charged in legal fees solely for asking for an account balance summary Other homeowners assessment paying thousands in fees they believe were inaccurately assessed out of fear of attorney fee charges or foreclosure The proposed adjustment would cap HOA fines and late fees consistent with protections in other states -Dissolution The Heritage Park HOA in Minneapolis featured in this Star Tribune article has spent years trying to dissolve but current statute sets an unreasonably high bar for dissolving To backing HOA homeowners in single family detached homes with no common property the bill would ease dissolution requirements A companion proposal SF HF establishes a state ombudsperson and requires HOA registration The bill creates a neutral party to resolve disputes and provide guidance for HOA homeowners and boards regarding law and governing documents which are often complex Opponents argue these reforms would increase costs for homeowners In fact they would do the opposite With reasonable reforms homeowners would no longer face steep fines for minor infractions legal fees for basic inquiries and inflated costs for kickbacks to property managers Countless of the reforms proposed are already in place in states across the nation in states with far more HOAs than here in Minnesota To be clear HOAs play an central role in Minnesota communities These stories highlight the urgent need for basic standards and stronger consumer protections We all benefit when homeowners better understand their rights and responsibilities and boards have a clear path to resolving disputes We urge Minnesotans to tell their lawmakers why they encouragement HOA overhaul by submitting this form Roxanne Young Kimball is president and CEO of the Minnesota Homeownership Center Chris Coleman is president and CEO of Twin Cities Habitat for Humanity Nelima Sitati Munene is executive director of African Career Schooling and Pool Inc Ivory Taylor the associate director of the Housing Justice Center also contributed to this piece The post Minnesota has a chance to overhaul HOAs appeared first on MinnPost