Earlier this month we told you that (click here to see the story) about an effort to amend Minnesota's construction-defect laws, which are among the most stringent in the nation, with a raft of amendments aimed at making it more difficult for a homeowner's association to file a frivolous or unfounded claim. Those amendments, HF1538, received bipartisan support and this week Governor Dayton signed them into law, removing what many say are a critical barrier to the construction of for sale condos and townhouses.
The state's construction defects laws essentially make builders, subcontractors and vulnerable to litigation for at least a decade and are intended to protect homeowners from construction defects for several years until they're apparent. Developers say that in the wake of the latest condo and townhouse boom, they've been bombarded with sometimes frivolous claims that are costly and time-consuming to defend, especailly when those suits are filed by powerful and well-funded homeowner's associations. Today, developers say those laws - and the threat of a lawsuit - are why they are unwilling to build for-sale attached housing and association-maintained housing, creating a dearth of options for condo and townhouse buyers. The new rules add several requirements for homeowners associations before legal action can be initiated including a preventative maintenance plan, cost-effective mediation before legal action and support from a majority of homeowner association members.
Those amendments received the support of the construction industry, including the Builders Association of the Twin Cities and the Minnesota Association of Realtors. The Governor also signed a bill that creates a First-Time Homebuyer Savings Account, which encourages Minnesotans to save for a down payment via tax deductions and other incentives.