Commentary: Progress, and Next Steps, in Protecting Homeowners from Faulty HOAs

Imagine waking up one morning to find you no longer own your home. There was no warning — your mortgage is current, but the sheriff is telling you to move out and there is nothing you can do about it. Or imagine getting a letter in the mail telling you that you have to pay $3,000 or they will put a lien on your house. The letter writer doesn’t say why and doesn’t even have to provide a legally justifiable reason for it. However, if you don’t pay it, you will lose your home.

Under current Minnesota law, this is the reality for people in a Homeowner’s Association (HOA). There are no protections for homeowners, and no requirement for the association to have sensible or fair business practices. This makes homeowners vulnerable to financial exploitation from the HOA. I have heard about this exploitation coming from management companies, attorneys, and insurance companies, too.

During the past two years, I have been working with the legislature to put much-needed protections in place. Senator Eric Lucero (R-St. Michael) and Representative Paul Novotny (R-Elk River) have been champions in helping to move HOAs to a better place.

Movement in Legislature

During the 2023 legislative session, Senator Lucero co-authored a bill that ultimately was signed into law as a part of the larger Housing Omnibus Bill. The bill, SF 2076,  made some of the first non-technical changes to the Minnesota Common Interest Ownership Act since its passage in 1994 by introducing new protections for homeowners from threats of foreclosure by HOAs.

The new law directly addresses the issue of homeowners facing foreclosure due to a conflict with their HOA that results in fees and assessments stacking up to an unaffordable amount. It provides residents a greater opportunity to avoid foreclosure. The bill included the following changes:

  • HOAs must allow residents to bring their accounts current and avoid foreclosure by paying owed dues, not including attorney or legal fees.
  • Legal fees may not be assessed against a homeowner while they are in the process of disputing a fine
  • Notification requirements to homeowners for fines being levied against them must include the amount, date, reason for the fine, the rule violation for which the fine is applied, the right to a hearing by the HOA board, and information on available homeownership assistance.

These new laws are a step in the right direction to prioritizing homeownership in Minnesota.

There are several other issues homeowners face regarding HOAs that need to be addressed in a future legislative session, including transparency and accountability to help level the power imbalance between homeowners and HOAs or property management companies.

Since HOA boards are comprised largely of volunteer residents, or those with ownership interest, some communities might not have board members with the professional experience or knowledge to govern a community. In these cases, property management companies have had increasing influence over financial decisions of the association as they provide guidance to inexperienced board members. In Minnesota, a small number of property management companies manage most HOAs. Some of them have deals with vendors that benefit the vendor and property management company — at the expense of increased cost for services to HOA residents.

Need for Community Conversations

Becky Cole

There’s more that needs to be done beyond the legislative action. This year, I would love to see conversations across all audiences involved in HOAs come to an agreement on best practices and accountability, as there are in other types of housing and business sectors.

Most people don’t realize that HOAs are not legally required. They have developed because of a builder’s contract with the local municipality that sold them the land; I have yet to see HOA contracts that prevent the homeowner from being financially exploited by the association, or that require HOA accountability.

If a home has mold or a structural problem, there are remedies for the homeowner. But if an HOA structure is not solid, sound, or ethical, there is very little recourse for the homeowner.

I know of a homeowner who got a permit from the city to build a shed on her property. The bylaws don’t prohibit it, and it’s a beautiful structure, but the HOA board decided they wanted her to remove it, or they would remove it and bill her for the attorney’s and removal fees.

I asked the city council why an HOA can function as a government agency, with more authority than the city, a council member’s response was, “We don’t have the time to check addresses when we issue permits.”

My county commissioners insisted that it is not their job to get involved in “disputes between neighbors.”

To a certain extent, they are right, but if a builder’s contract is awarded that sets homeowners up for potential exploitation, why aren’t they working to correct that instead of making excuses for it?

I want to see conversations across sectors, recognizing that things need to change. This is a policy year with the Minnesota legislature. Legislators need to hear your story.

If you want to connect with me about your story — I heard from many people after I wrote my original commentary about my experience with an HOA in October 2021 — please reach out via my website: