Section 1 adds a definition of “construction defect claim” to the Minnesota Common Interest Ownership Act.  It would include various actions and claims involving a defect in the design or construction of an improvement to real property that is part of a common interest community.  “Development party” is also defined as various professionals, the declarant, and other persons performing functions related to the improvement to real property.

Section 2 amends the powers of the unit owner’s association, requiring notice to unit owners and approval before proceeding with construction defect litigation or arbitration.  Special procedures for unit owner approval are included.  The association may intervene as a third party or assert a claim without notice and approval, provided that it occurs within 90 days.

Section 3 amends the statute governing upkeep of the common interest community to make damages to specified common elements the responsibility of the unit owner or association who caused the damage.  It also requires the board of directors to have a maintenance plan and schedule and gives existing common interest communities until January 1, 2019, to comply with these requirements.

Section 4 requires a disclosure statement to include the initial maintenance plan and schedule required under section 3. The initial plan must be based on the best available information listing building elements to which it will apply and generally accepted maintenance standards.  It must be dated and signed by the declarant and fully funded.

Section 5 amends the implied warranty statute to provide that a development party is not liable for losses and damages caused by the association’s failure to follow a maintenance plan or schedule unless the failure to comply occurred while the declarant controlled the board.

Section 6 requires defect claims to go to mediation before pursuing the claim, except when the parties have completed home warranty dispute resolution.

Section 7 contains the effective date.  The act is effective August 1, 2017.  It applies to common interest communities created on or after that date, except for the maintenance plan requirements under section 3, which also apply to existing common interest communities.