Minnesota HOAs must take three bids on contracts over $50,000
Minnesota HOAs must take three bids on contracts over $50,000
2026-09-12 · Minnesota · Legislation
What happened. Section 4 of Laws 2026, ch. 82 adds conflict-of-interest rules, an anti-kickback provision and a competitive-bidding mandate to Minn. Stat. § 515B.3-103. All take effect 1 January 2027.1
This is the section that changes day-to-day practice for Minnesota property managers more than any other part of the act.
The threshold
“[P]rior to entering into any contract for property maintenance, construction, repair, or reconstruction services with an estimated cost exceeding $50,000, the board or property managers must solicit a minimum of three written competitive bids.”
Note that the trigger is the estimated cost, which puts the judgment call before the procurement rather than after it, and that the duty sits on “the board or property managers” — naming the manager directly.
Six exceptions
Bidding is not required where: bids cannot be obtained despite reasonable efforts; repairs are emergencies affecting health or safety; damage is significant and requires immediate action; the work is warranty work; there is a sole available vendor; or the cost is materials of $50,000 or less installed with volunteer labour.
Conflicts and kickbacks
A board member “must not participate in deliberations regarding or vote on the approval or disapproval of a contract… where the board member or a member of the family of a board member has a material financial interest in the contract or is likely to realize a material financial gain.” Family is defined by reference to Minn. Stat. § 317A.255, subd. 4.
Separately, neither a board member nor a property manager may “solicit or accept any money or other compensation from any person as an inducement” to approve or enter such a contract. That is an anti-kickback rule reaching the management company, not only the volunteers.
Affiliated bids must surface
Affiliated bids must be disclosed before consideration, and “[a] written record of the disclosures must be retained and recorded in the meeting minutes.” Disclosure does not disqualify the bid — it puts it on the permanent record.
Selection has to be justified, not just made
The statute does not require the lowest bid. It requires a reasoned one: selection must be “based on reasonable business criteria, including but not limited to, the cost of the project, the contractor's qualifications, available warranties, the extent to which the bidder has met the bid solicitation requirements, and the length of time estimated to complete the project.”
That is a defence of the higher bid as much as a constraint on it. A board that selects a more expensive contractor with a longer warranty and a firmer schedule is doing exactly what the section contemplates — provided the reasoning exists in writing.
The six-year archive is the enforcement mechanism
New subsection (j): “The association must maintain a record of the bid selection process, including the criteria used, and the contracts awarded for the last six years, and make those records available to unit owners at cost or as otherwise provided in section 515B.3-118.”
Three consequences follow, and they compound.
Six years is longer than most management relationships. An association that changes managers in 2029 needs the 2027 bid files to come with it. Management-agreement transition clauses should say so explicitly, because a departing manager's server is where these records will otherwise live.
“The criteria used” must be contemporaneous. A rationale reconstructed in 2030 for a 2027 award is not a record of the selection process. The document has to be created at the time.
Owners can ask. Combined with section 4's requirement that contracts up for approval be circulated with the agenda, the procurement file is effectively open from both ends — before the decision and for six years after it.
The reporting that produced this section
The bidding and conflict rules did not arrive from nowhere. Minnesota reporting through 2024 and 2025 examined association contracts awarded without competitive bidding to contractors affiliated with the association's own property manager, and the resulting charges to owners.
The Minnesota Star Tribune, reporting in March 2025 on rising association insurance costs, recorded the institutional response: Aaron Cocking, president and chief executive of the Insurance Federation of Minnesota, called on the Attorney General's Office to investigate for fraud after one such case was profiled, saying insurers were concerned about “possible self-dealing and inflated contract costs within some HOA communities.”3
No public record of an Attorney General investigation, enforcement action or charge has been identified, and none should be inferred. What can be said is that the legislative answer came in the form of three bids, a minuted affiliation disclosure and a six-year file.
The gap the statute leaves
Chapter 82 regulates the conduct but creates no public enforcer. A separate two-sentence bill, S.F. 2324 / H.F. 1931, would have added Minn. Stat. § 515B.3-123: “The attorney general has authority under section 8.31 to investigate and prosecute violations of this chapter.” That was its entire operative text. Neither file received a hearing, and both died with the biennium.4
So the remedy for a violation of the bidding rules remains what it has always been in Minnesota: a private action by an owner under Minn. Stat. § 515B.4-116, which carries prevailing-party attorney fees and punitive damages for wilful noncompliance.
What January changes for managers
Three concrete steps, in order of lead time.
Fix the threshold question first. “Estimated cost exceeding $50,000” needs a house rule about who estimates and when, because the determination has to be made before solicitation begins. A single project split into phases below the threshold is the obvious pressure point, and it should be addressed by policy rather than discovered in a dispute.
Build the disclosure into the bid form. Affiliation between a bidder and a board member, an officer, or the management company should be an express question on the solicitation, answered in writing by the bidder. That is how the disclosure reaches the minutes reliably.
Audit existing affiliated relationships now. Where a management company owns or is related to a maintenance or construction affiliate, the affiliate is not barred from bidding — but every such award from 2027 carries a minuted disclosure and a six-year public file. Which vendors this describes is a question for before the first 2027 contract, not after.
What to watch next
Nothing is pending; the 94th Legislature adjourned 18 May 2026. The first real test of the section will be the 2027 exterior season, when Minnesota associations run storm repairs through a bidding mandate for the first time.
This sets out what the statute requires. It does not assess any particular contract or contractor.
Related Minnesota HOA Topics
- Laws 2026, ch. 82 (S.F. 1750), full session-law text — Minnesota Revisor of Statutes ↩
- “New Laws 2026: Chapter 82” — Minnesota House of Representatives Public Information Services ↩
- Minnesota Star Tribune, “Property insurance increases of 400% seen at some condos, HOA properties” (21 Mar. 2025), as filed with the Minnesota House ↩
- S.F. 2324 bill status (attorney general enforcement of ch. 515B; never heard) — Minnesota Revisor of Statutes ↩
- Minn. Stat. § 515B.3-118 — association records available to unit owners ↩
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