Focus on New Laws: HOAs and CICs

A new state law changes how cities address homeowners associations and common interest communities during residential development reviews while preserving core local planning authority.

A new state law commonly referred to as the “Minnesota Homeowners Association (HOA) Bill of Rights” makes significant changes to how HOAs and common interest communities (CICs) are regulated.

Enacted as 2026 Session Law Chapter 82, the legislation introduces several reforms to association governance and operations. While many provisions apply directly to how these entities govern private property owners, the law also includes a new statewide preemption that affects how local governments approve residential developments.

New limits on local development requirements

Effective Jan. 1, 2027, for HOAs and CICs created on or after that date, cities, counties, and other local government entities are prohibited — unless otherwise required by state or federal law or rule — from withholding approval a residential building permit, conditional use permit, residential subdivision development, planned unit development, or other permit on:

• The creation of an HOA.
• The inclusion of any service, feature, or common property that would necessitate an HOA, unless requested by the developer.
• The inclusion of specific terms in an HOA declaration, bylaws, articles of incorporation, or other governing documents.
• The adoption, revocation, or amendment of an HOA rule or regulation governing the association or its members.

What the law does not change

The legislation does not ban local governments from overseeing associations, common areas, or infrastructure within residential developments. Instead, it only prohibits cities from mandating developers to create associations where they aren’t otherwise required. Additionally, this prohibition does not apply when an association is already mandated by other laws. For example, Minnesota Statutes, section 515B.3-101 requires an association to be incorporated by the date a CIC is created, meaning the preemption does not override the statutory requirement for condominiums and similar CICs.

Additionally, developers retain the right to request the inclusion of a service, feature, or common property that would necessitate an HOA. This applies when a developer proposes private streets, common open spaces, or shared amenities. Because these features are developer-initiated rather than city-mandated, the law preserves local authority to require proper maintenance or insurance. As a result, a developer that chooses to include common property may still need an association for long-term management and maintenance.

Cities retain broad development authority

The new law does not require a city to approve inadequate developments or accept ownership of infrastructure they would normally reject. Cities can continue evaluating proposals against established land use, subdivision, engineering, and public safety standards, and may deny applications that fail to meet them.

Nothing in the law requires a city to take over private streets, stormwater systems, or utilities as public infrastructure. The law also expressly preserves local authority to require easements necessary to access public infrastructure.

Other HOA and CIC changes

Beyond local permitting, the Minnesota HOA Bill of Rights enacts wide-ranging administrative changes for CICs. Specifically, the new law impacts associations by:

• Modifying requirements for terminating a CIC.
• Limiting certain late fees, fines, and attorney fees.
• Establishing additional notice requirements for meetings and changes to HOA rules.
• Requiring associations to adopt schedules of fees and fines.
• Modifying association lien and foreclosure authority.
• Setting new guidelines for boards of directors, elections, and terms.
• Creating updated dispute resolution requirements and unit owner protections.

What this means for cities

Cities are most directly impacted by the new preemption on local development approval requirements. Before the provision takes effect on Jan. 1, 2027, cities should review their residential development approval processes, ordinances, development agreements, and application materials to flag any practices that conditionally tie approvals to HOA-dependent features.  

Cities should also work closely with their attorneys when reviewing proposals where an HOA appears necessary, ensuring proper handling during the development process under the new statutory limits.

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