Minnesota HOA Assessment Limits

Section 1: Overview

Minnesota draws a clear line here: the board sets assessments, and there is no statutory cap on how much it can raise them. The association's lien for those assessments holds a limited six-month priority over a first mortgage.¹ The Minnesota Common Interest Ownership Act (MCIOA), Minn. Stat. Chapter 515B, is the state's version of the Uniform Common Interest Ownership Act. It governs common interest communities created on or after June 1, 1994, and some of its provisions reach older condominiums.^2,3 Regular increases run through board adoption: the board approves an annual budget at least annually, and nothing in Chapter 515B limits the size of an increase by percentage.⁴ Special assessments draw their authority from the declaration and, for communities created on or after August 1, 2010, from the enumerated purposes in Minn. Stat. § 515B.3-1151.⁴ California caps regular and special increases by statute. Several Uniform Act states let owners vote down an adopted budget. Minnesota does neither: it gives the board full authority to adopt the budget and controls assessment practice through the declaration, fiduciary duties, and the lien rules.⁵ The sections below lay out the assessment framework, the procedures for increases and special assessments, the six-month priority lien, and the 2026 statutory reforms now reshaping fees, collections, and budget transparency.

Section 2: The assessment framework

2A. Authority to levy and allocate assessments

MCIOA gives the unit owners' association, acting through its board, the authority to levy assessments for common expenses. Unless the declaration, articles, bylaws, or Chapter 515B say otherwise, the board acts on the association's behalf in all instances.⁵ The board exercises that power through the annual budget, which it must approve at or before the conveyance of the first unit and at least annually after that.⁴ Minnesota splits its assessment rules by creation date. Minn. Stat. § 515B.3-115 covers communities created before August 1, 2010;¹ Minn. Stat. § 515B.3-1151 covers those created on or after that date.⁴ The two sections run parallel in structure, but the post-2010 section adds detail on declarant budgets, reserves, and the enumerated purposes for special assessments. Whichever section applies, the declaration sets the formula for allocating common expenses among units; all common expenses are assessed according to that formula under Minn. Stat. § 515B.2-108.⁶ Certain costs get allocated differently: limited common element costs go against the units served, insurance by risk, utilities by usage, and collection costs against the unit charged.⁴ MCIOA covers condominiums, cooperatives, and planned communities created on or after June 1, 1994.² It also reaches some older communities: condominiums created under the Minnesota Condominium Act (Chapter 515) and the Uniform Condominium Act (Chapter 515A) fall under MCIOA for events on or after June 1, 1994. Cooperatives and planned communities created before that date generally fall outside MCIOA unless they opt in through amendments to their governing documents.² Older condominiums may therefore remain partly under Chapter 515A or Chapter 515.²

2B. Limits on regular assessment increases

The board approves the annual budget at least annually, and each unit's assessment follows from that budget and the declaration's allocation formula.¹ Minnesota imposes no statutory percentage cap on how much the board may raise regular assessments year to year. Nothing in Chapter 515B limits a regular increase to a fixed percentage. Any ceiling that applies to a particular community comes from its declaration or bylaws — not from the state.⁴ That is a defining feature of Minnesota practice, and it separates the state from cap states like California. The 2026 "Homeowners Association Bill of Rights" (Laws 2026, Chapter 82, enacting S.F. 1750) added budget-transparency requirements to both assessment sections. Under the amended §§ 515B.3-115 and 515B.3-1151, the association must give each unit owner a copy of the proposed budget before the annual meeting and allow owner input before or during that meeting.⁷ That creates a notice-and-comment step. It does not give owners a vote to ratify or veto the budget; the board retains full authority to adopt it.⁵ On delinquency, both sections allow acceleration. If any installment goes more than 60 days past due, the association can declare the entire assessment immediately due and payable — with ten days' written notice to the unit owner — subject to any shorter period in the declaration or bylaws and the reinstatement limits under Minn. Stat. § 580.30 and Chapter 581.⁴ A board that adopts an inadequate or improperly documented budget faces practical consequences, not a statutory veto. There is no ratification-by-rejection mechanism. The principal checks are the directors' fiduciary duties and the statutory claim for relief: anyone harmed by a violation of Chapter 515B or the governing documents can seek appropriate relief, and the court may award attorney fees to the prevailing party.⁸

2C. Special assessments, the lien, and the six-month priority

Special assessments draw their authority from the declaration and, for communities created on or after August 1, 2010, from the statute. Under § 515B.3-1151(c), an association may levy special assessments only if the declaration allows it and only for specific purposes: emergency expenditures, replenishing underfunded replacement reserves, unbudgeted capital or operating expenses, or replacing components funded under §§ 515B.3-114 and 515B.3-1141.⁹ For communities created before August 1, 2010, § 515B.3-115 carries no such enumerated list, so the declaration controls special assessment authority.¹ Two further categories come from the statute itself: assessments to pay a judgment against the association go only against units that were in the community when the judgment was entered, in proportion to their common expense liabilities;⁴ and the cost of damage caused by a unit owner, occupant, or their guests is assessed against that owner's unit to the extent not covered by insurance.⁴ The association's lien for assessments arises under Minn. Stat. § 515B.3-116 from the moment an assessment becomes due. Recording the declaration provides notice and perfection — no further filing required.¹⁰ The lien is generally junior to a first mortgage. When a first mortgage recorded after June 1, 1994 is foreclosed and no one redeems, the purchaser takes title subject to up to six months of unpaid common-expense assessments — those that became due, without acceleration, during the six months before the end of the redemption period, calculated on the association's then-current annual budget.¹⁰ Enforcement of an assessment lien must begin within three years.¹⁰ Operationally, that six-month figure is what associations can expect to recover when a first mortgagee forecloses — which makes prompt collection and accurate payoff statements essential.

Section 3: Assessment limits and procedures in practice

A. Regular assessment increase procedure

The board approves an annual budget at least annually, and each unit's assessment follows from that budget and the declaration's allocation formula — whether the community falls under § 515B.3-115 (created before August 1, 2010) or § 515B.3-1151 (created on or after that date).⁴ Under the 2026 amendments, the board must give each owner a copy of the proposed budget before the annual meeting and allow input before or during that meeting. Owners do not vote to ratify it.⁷ An increase takes effect when the board adopts the budget for the fiscal year. Beyond the new notice-and-comment step, there is no statutory waiting period.⁴

B. Special assessment procedure

For communities created on or after August 1, 2010, the board may levy a special assessment only when the declaration authorizes it and only for the purposes listed in § 515B.3-1151(c).⁴ For older communities, special assessment authority and any owner-approval requirement come from the declaration, not § 515B.3-115.¹ Notice follows the declaration, bylaws, and the general meeting-notice rules. The 2026 law also requires that meeting notices include copies of documents subject to approval, including the budget.⁷

C. Caps, ceilings, and override mechanisms

Minnesota supplies no statutory percentage cap on regular or special assessment increases. Any ceiling is declaration-defined — the state provides none.⁴ There is no statutory ratification-by-rejection mechanism, so the board's adopted budget governs unless the declaration provides otherwise.⁵ The principal statutory lever on collections is acceleration: any installment more than 60 days past due can be accelerated on ten days' written notice.⁴

D. Notice, documentation, and disclosure tied to assessments

With the 2026 reforms in effect, the board must distribute the proposed budget before the annual meeting, allow owner input, and ensure meeting notices include documents up for approval.⁷ On resale, the seller must deliver a resale disclosure certificate that the association prepares under Minn. Stat. § 515B.4-107, covering current assessments, special assessments, unsatisfied judgments, and pending litigation.¹¹ The disclosure statement for new sales is governed by § 515B.4-102 (and § 515B.4-1021 for newer communities).¹² The six-month priority figure under § 515B.3-116 is the amount a foreclosing first mortgagee must account for — it belongs in every payoff and lien statement.¹⁰

Section 4: Recent legislative and judicial activity

Recent Legislation

Minnesota's 2026 legislative session produced the most significant overhaul of HOA assessment and lien law in years. Two companion session laws — Laws 2026, Chapter 82 and Laws 2026, Chapter 61 — both amended core Chapter 515B sections, including the assessment sections and the lien section. Chapter 82, branded the "Homeowners Association Bill of Rights," carries the main substantive reforms.

Recent Court Rulings

Minnesota's appellate courts are not rewriting HOA law from the bench. What this nonprecedential ruling does is illuminate how redemption interacts with assessment-lien foreclosure — and why associations must keep documentation tight throughout the process.

Regulatory Developments

Minnesota's 2025 legislature created a new administrative forum for HOA disputes within the Department of Commerce. For owners, that means a state-level complaint channel that sits alongside, not instead of, judicial remedies.

Section 5: National positioning and related coverage

On the national spectrum of assessment limits, statutory-cap states sit at one end. California leads that group: Cal. Civ. Code § 5605(b) bars the board from imposing a regular assessment more than 20 percent greater than the prior year's, and bars special assessments that in aggregate exceed 5 percent of budgeted gross expenses, without the approval of a majority of a quorum of members.¹⁷ A second group adopted the Uniform Common Interest Ownership Act with a provision letting owners vote down an adopted budget at a ratification meeting — Alaska, Colorado, Connecticut, Delaware, Maine, Vermont, and Washington. A third group — Alabama, Arkansas, and Georgia among them — leaves assessment limits almost entirely to the recorded declaration. Minnesota enacted the Uniform Act but skipped the owner-veto provision: the board adopts the budget with no statutory percentage cap, which places Minnesota functionally between the ratification states and the declaration-driven states.⁵ For multi-state operators entering Minnesota, the practical takeaway is simple: no California-style cap applies, no owner ratification vote is required, and the declaration along with the board's fiduciary duties carry the full weight.¹ MCIOA covers condominiums, cooperatives, and planned communities created on or after June 1, 1994.²

1. Minn. Stat. § 515B.3-115, Assessments for Common Expenses; Common Interest Communities Created Before August 1, 2010 ↩
2. Minn. Stat. § 515B.1-102, Applicability ↩
3. Minn. Stat. § 515B.1-101, Short Title ↩
4. Minn. Stat. § 515B.3-1151, Assessments for Common Expenses; Common Interest Communities Created On or After August 1, 2010 ↩
5. Minn. Stat. § 515B.3-103, Board of Directors, Officers and Declarant Control ↩
6. Minn. Stat. § 515B.2-108, Allocation of Interests ↩
7. Minnesota Senate Counsel, S.F. 1750 Bill Summary (2nd Engrossment) ↩
8. Minn. Stat. § 515B.4-116, Rights of Action; Attorney's Fees ↩
9. Minn. Stat. § 515B.3-1141, Replacement Reserves ↩
10. Minn. Stat. § 515B.3-116, Lien for Assessments ↩
11. Minn. Stat. § 515B.4-107, Resale of Units ↩
12. Minn. Stat. § 515B.4-102, Disclosure Statement; General Provisions ↩
13. S.F. 1750, 94th Minnesota Legislature (Laws 2026, Chapter 82) ↩
14. Whalen v. 200 River Drive Condominium Ass'n, No. A23-1671 (Minn. Ct. App. Aug. 5, 2024) ↩
15. Minn. Stat. Chapter 515B (2026 amendment table, Chapters 61 and 82) ↩
16. Minn. Stat. § 45.0137, Common Interest Community Ombudsperson ↩
17. Cal. Civ. Code § 5605 ↩