Senate hears bill to create ombudsperson and require registration for homeowners associations

Senators Pah and Marty presented Senate File 1063 on April 1, a bipartisan proposal to create an ombudsperson for common-interest communities and to require registration of homeowners associations (HOAs). The bill responds to a multi-year legislative working group's recommendations and testimony that Minnesota lacks a reliable statewide picture of HOA governance.

Senator Pah said Minnesota has an estimated 7,950 common-interest community associations affecting more than 1.5 million homeowners and that the state does not have an accurate registry because HOAs are not required to identify themselves as such in existing Secretary of State filings. She described the bill's two central elements: (1) establishing an ombudsperson to assist homeowners in disputes, provide mediation and dispute-resolution services, and offer information to homeowners and HOA boards; and (2) a registration requirement to increase transparency and allow the state to track associations.

Senator Marty emphasized that many HOA boards are volunteer-run and lack legal knowledge; the ombudsperson would provide assistance similar in part to the long-term care ombudsman model by offering dispute assistance and mediation. The authors said registration fees would be used to fund the ombudsperson and that the overall package was intended to be revenue neutral.

The nut graf: Sponsors said the ombudsperson and registration would give homeowners greater access to dispute resolution and create a data baseline on HOAs; supporters argued many boards are small, volunteer-led entities that need accessible guidance, while sponsors said larger, professionally managed associations would continue to have counsel and managers.

The committee heard the bill and a voice vote followed; the bill was moved and later laid over for possible inclusion, with members asking for continued discussion and coordination with related HOA legislation.