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Health & Fitness

Homeowners Association Basics

Understanding the law of homeowners association in Minnesota

There’s been a lot of talk on these in recent days about homeowners associations.  Some readers cannot stand them, and others choose to live within a neighborhood controlled by an HOA with the understanding that doing so necessarily results in the curtailing of some of their freedoms with respect to their property.


Homeowners associations in Minnesota are tricky creatures under the law.  In some respects, these associations are nothing more than non-profit corporations.  Homeowners associations are formed when non-profit articles of incorporation are filed with the Minnesota Secretary of State, and the rights and responsibilities of members, directors and officers are set out in the Minnesota Nonprofit Corporation Act, Minnesota Statutes Chapter 317A.


Homeowners associations also are governed by certain contractual arrangements.  When a housing development is planned as an association-controlled neighborhood, the developer prepares and records with the County Recorder a document called a “Declaration”, also known as “Covenants, Conditions & Restrictions” or “CC&Rs” for short.  The Declaration typically sets out provisions as to assessment of dues to residents for maintaining common areas, guidelines for architectural review of home plans, improvements such as decks, fences and even landscaping, as well as penalties for violations of these provisions.  A well written Declaration will also provide a mechanism for the Association’s Board to promulgate rules and regulations consistent with its provisions.  For condominium and townhome associations and other planned communities which elect to be governed by it, the Minnesota Common Interest Ownership Act (“MCIOA”), Minnesota Statutes Chapter 515B, also applies.
The most significant question that arises when it comes to the legal aspects of homeowners associations – and, quite frankly, the source of most litigation involving HOAs – is what powers does an association board have?  Is it akin to a city council or county board, or is it something much less? 

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There is an accepted hierarchy in terms of governing authority in this country.  At the top is the Federal laws. State laws come next, and these laws can be more restrictive of our freedoms than the Federal.  Next down are municipal codes and ordinances – cities and counties, particularly zoning codes – and these can be more restrictive than State and Federal laws.  Finally, for those neighborhoods that have been made subject to a homeowners association via the recording of restrictive covenants, residents in those neighborhoods may find themselves having further restrictions that other neighborhoods in the same city do not.  In other words, the HOAs can be more restrictive than city ordinances, and a more permissive city ordinance does not invalidate a restriction in the HOA’s covenants.
HOAs, however, must exercise their powers carefully when it comes to regulating the affairs of its residents. 

While it is accepted fact that HOA neighborhoods are going to be more restrictive than others, there are limits to what an HOA board can do.  A 1998 California case, Fountain Valley Chateau Blanc Homeowners Association v. Department of Veterans Affairs, shows how a homeowners association can blur the lines between a municipality and a private association of homeowners.  In that case, the Board attempted to use a provision in its CC&Rs that required owners to “maintain the interiors of their residential units and garages, including the interior wall, ceilings, floors and permanent fixtures and appurtenances in a clean, sanitary and attractive condition” to force an elderly veteran suffering from Hodgkin’s Disease to clean up what they deemed to be a “garbage house.”  The Court, in rebuking the association, stated that “it is virtually impossible to say the association acted reasonably.”  In other words, the provision in the covenants required the exercise of police power not granted to an HOA.  An HOA can impose fines but to allow HOA representatives to enter someone’s property to determine cleanliness would be a stretch under any reasonable standards.  Maintaining outdoor aesthetics, however, is within the purview of the HOA, which is why architectural and landscaping guidelines are permissible.

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Some people believe that homeowners associations and their rules and regulations infringe on individual property rights.  However, Minnesota law provides for a myriad of disclosures to be provided up front and prior to closing so that prospective buyers in an HOA know exactly what they’re buying into, including rescission rights after a purchase agreement is signed.  This disclosure system avoids the “I didn’t know about all these rules when I moved in” defense, and ardent property rights supporters who object to the HOA’s restrictions have the freedom to live elsewhere.

 

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