January 1 Deadline for Preventative Maintenance Plans, Schedules and Budgets

Minnesota Statutes Chapter 515B, the Minnesota Common Interest Ownership Act (“MCIOA”), was amended in 2017 to establish new requirements regarding preventative maintenance plans, maintenance schedules and maintenance budgets.   The specific requirements vary depending on the date that the common interest community (“CIC”) was created.  This article is limited to the requirements that apply to CIC’s created before August 1, 2017.

If a CIC was created before August 1, 2017, then the association’s board of directors must comply with the following requirements by January 1, 2019:

  1. Prepare and approve a written preventative maintenance plan, maintenance schedule and maintenance budget for the common elements.
  2. Provide all unit owners with a paper copy, electronic copy, or electronic access to the preventative maintenance plan, the maintenance schedule, and any amendments or modifications to or replacements of the preventative maintenance plan and the maintenance schedule.
  3. Follow the approved preventative maintenance plan, subject to amendment, modification or replacement from time to time.

MCIOA requires preventative maintenance plans for common elements, but not for components of the units that the association is required to maintain.  This means that the preventative maintenance plan for a typical condominium must include roofs, siding, and other exterior building surfaces (which are part of the common elements in a typical condominium), but the preventative maintenance plan for a typical townhouse community need not include roofs, siding and other exterior building surfaces (which are part of the unit, not part of the common elements, in a typical townhouse community).

MCIOA does not provide information as to what is to be included in a “preventative maintenance plan,” “maintenance schedule” or “maintenance budget” for a CIC that was created before August 1, 2017.  However, it is important that an association (i) make a preventative maintenance plan and maintenance schedule that are realistic, (ii) follow the preventative maintenance plan and maintenance schedule, and (iii) promptly amend the preventative maintenance plan or maintenance schedule if necessary.

If an association fails to follow its own preventative maintenance plan or maintenance schedule, a court may determine that such failure constitutes “lack of maintenance or failure to perform necessary repairs or replacement” and that any resulting damage to the common elements or any unit is the responsibility of the association, pursuant to Minnesota Statutes section 515B.3-107(a). This may affect the outcome of a warranty claim, a construction defect claim, or a dispute between an association and a unit owner related to maintenance of the common elements.

The maintenance budget should be in an amount sufficient to fund the association’s obligations pursuant to the preventative maintenance plan and maintenance schedule.  The maintenance budget for each year should be incorporated into and made part of the association’s annual operating budget.

In regard to disclosure requirements, MCIOA does not specifically address the issue whether the preventative maintenance plan, maintenance schedule and maintenance budget should be included in (1) the disclosure statement in connection with the initial sale of a unit in a CIC created before August 1, 2017, or (2) the resale disclosure certificate in connection with the resale of any unit.  If there is a question whether or not to disclose information that may be of interest to a purchaser, I generally recommend disclosure. In this case, providing copies of the preventative maintenance plan, maintenance schedule and maintenance budget will assist the purchaser to make an informed decision and reduce the risk of a claim alleging that a disclosure statement or resale disclosure certificate is incomplete without these documents.

This article is republished with permission and originally appeared in the Winter 2018 Issue of Minnesota Community Living from CAI-Minnesota. 
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