HOA Changing the Allowed Fee Increase and Levying Special Assessments

Hi Donna,

If the community was created before August 1, 2010, according to the Minnesota Common Interest Ownership Act Section 515B.3-115(c), assessments shall be levied based on a budget approved annually by the association. A similar provision exists for condominiums created after August 1, 1980 in the Minnesota Uniform Condominium Act Section 515A.3-114(a). You may have some protection or power through the budget approval process.

If the community was created on or after August 1, 2010, according to the Minnesota Common Interest Ownership Act Section 515B.3-1151(c), assessments shall also be levied based on a budget approved annually by the association. In addition, the section states that associations may levy special assessments, but only for the following reasons:

• To cover emergency expenditures
• To replenish underfunded reserves
• To cover unbudgeted capital or operating expenses
• To replace components of the association it is required to replace

That said, you may also have some power through the budget approval process. You may also check whether the special assessment is being levied for the approved reasons.

Apart from this, if the 10% limit is stated in the CC&Rs, then increasing it may require an amendment of the declaration. If so, the association may need to follow the provisions in Section 515B.2-118(a), stating that the declaration may only be amended by vote or written consent of unit owners of units to which at least 67% of the votes in the association are allocated, or any greater or other requirement the declaration specifies.

A similar provision exists for condominiums created after August 1, 1980 in the Minnesota Uniform Condominium Act Section 515A.2-119(a) which states that: “the declaration may be amended by the association only by a vote or written agreement of unit owners to which at least 67 percent of the votes in the association are allocated, and 67 percent of the first mortgagees of the units (each mortgagee having one vote per unit financed) or any larger or smaller majority the declaration specifies.”

For further guidance, kindly consult a lawyer.