HF1538 Summary

• Adds definition of "construction defect claim" covering civil actions or arbitration against development parties (architects, contractors, engineers, developers, declarants, inspectors, and their affiliates) for damages from defects in initial design or construction of improvements in common interest communities.

• Requires associations to provide written notice to unit owners and obtain majority vote approval before initiating litigation or arbitration over construction defect claims, excluding votes from units owned by the declarant, affiliates, or mortgagees who foreclosed.

• Permits associations to intervene in or assert construction defect claims as counterclaims before obtaining full membership approval, but requires dismissal without prejudice unless approval is obtained within 90 days.

• Mandates mediation as a condition precedent to construction defect claims under Minnesota Rules of Civil Procedure, with statute of limitations and repose tolled during mediation plus up to 180 days.

• Requires associations to prepare and approve written preventative maintenance plans, schedules, and budgets for common elements, with existing communities having until January 1, 2019 to comply; applies to common interest communities created on or after August 1, 2017.