March 19, 2026 | Mark Luis Foster

There’s a bevy of HOA reform bills coursing through St. Paul. Frankly it’s hard to keep up. The largest and possibly most controversial is SF1750, which cleared a House committee yesterday and is on its way to Judiciary. HOALN provided written testimony against 1750 and we hope to testify in person if given the chance when the next meeting is held in St. Paul. If you get a chance, contact your legislator and ask them to oppose SF1750. It’s a massive bill that will cause confusion, increase fees and likely further erode new board member recruitment in the near future.

There is an alternative HOA bill that was introduced and it’s getting a hearing today. Authored by Senator Nick A. Frentz (18, DFL) and Senator Michael E. Kreun (32, R), SF4035 takes a more common-sense approach to HOA legislation and seems to be gaining more support among HOA industry leaders (like attorneys and prop management companies). It has a companion bill in the House, which is HF3808.

I’ve included a plain language version, courtesy of ChatGPT, below. This is based on the latest bill version I could find, so note that things are changing ever so rapidly and keeping up with amendments (written or oral) has been futile.

The bill has guard rails included that likely won’t affect high functioning boards (much). More disorganized boards may feel some pain. Transparency seems to be the key in this bill, which is nearly always a good thing.

There’s a hearing today but it’s included with a litany of other bills, and it will prove to be a marathon session. Schedule is HERE.

SUMMARY OF SF4035 (PLAIN LANGUAGE VERSION VIA A.I.)

1) Caps and limits on late fees

• HOAs cannot charge late fees above 15% of the unpaid assessment (unless governing docs already allow more).
• This prevents excessive penalty charges on homeowners.

2) New protections before fines or charges are enforced

• HOAs must:
  • Give written notice explaining the violation and amount owed
  • Provide the specific rule violated
  • Offer the homeowner a right to a hearing before fines are finalized
• Attorney fees cannot be charged if a homeowner disputes a fine until after a hearing decision.

3) Mandatory fine policy for all associations

HOAs must adopt a formal fine policy that includes:

• A list of violations
• A schedule of fines
• Explanation of enforcement remedies

This policy must also be:

• Shared with current homeowners
• Provided to buyers during resale/disclosure

4) Mandatory collection policy for assessments

HOAs must adopt a collection policy with minimum requirements:

• At least 3 notices before sending to collections
• At least one notice must be sent via certified mail
• Law firms must send pre-foreclosure notices by certified + regular mail

5) Increased disclosure requirements for buyers

HOAs must now provide more information to buyers, including:

• Fine schedules and enforcement policies
• Collection policies
• Reserve studies (if available)
• Stronger warnings about:
  • HOA authority
  • Financial obligations
  • Restrictions on property use

There’s also a required buyer acknowledgment statement explaining that HOA rules can affect property rights.

6) More transparency when charging fines or assessments

When charging fines or damage-related assessments, HOAs must:

• Explain the cause (damage or violation)
• Show how the owner is responsible
• Warn that unpaid amounts can become liens and lead to foreclosure

7) Additional homeowner protections

• Owners must be informed about homeownership assistance resources (MN Homeownership Center)
• Clearer rules around hearings, disputes, and enforcement timing

🏘️ Key Impacts on HOA Boards / Associations

⚖️ 1) Reduced enforcement flexibility

Boards will have less discretion:

• Caps on late fees limit revenue tools
• Cannot immediately charge legal fees during disputes
• Must follow stricter due process before fines

👉 Impact: Enforcement becomes slower and more procedural.

📋 2) New administrative burden

Boards must:

• Create formal fine policies
• Create formal collection policies
• Update disclosure packages
• Track compliance with notice requirements

👉 Impact:

• More documentation
• More recordkeeping
• Likely increased reliance on management companies or attorneys

⏳ 3) Slower collections and enforcement timelines

Required steps:

• 3 notices before collections
• Certified mail requirements
• Hearing rights before final fines

👉 Impact:

• Delays in collecting delinquent assessments
• Potential increase in bad debt risk

💰 4) Potential financial impact on associations

• Cap on late fees → less penalty revenue
• Delayed collections → cash flow pressure
• Increased admin/legal costs

👉 Impact:

• Could lead to higher regular assessments to compensate

📢 5) Increased transparency and homeowner awareness

• Buyers receive more detailed disclosures
• Owners better understand:
  • Rules
  • Risks (liens, foreclosure)
  • Financial obligations

👉 Impact:

• Fewer “surprise” disputes
• Possibly more informed (and more assertive) homeowners

⚖️ 6) Higher legal and compliance risk for boards

Failure to follow the new rules (notice, hearings, policies) could:

• Invalidate fines or collections
• Expose the HOA to legal challenges

👉 Impact:

• Boards must operate more like regulated entities, not informal groups

🧠 Bottom Line

This bill shifts the balance:

• Before: HOA authority and flexibility
• After: Homeowner protections and due process

👉 For HOAs:

• More rules to follow
• Slower enforcement
• More administrative work

👉 For homeowners:

• Greater protection
• More transparency
• More ability to dispute charges