What Changed: Minnesota's HOA Reform Law
In May 2026, Governor Walz signed one of the most significant overhauls of Minnesota homeowners association law in three decades. The bill — HF1268/SF1750, two years in the making and passed with broad bipartisan support — updates the state's common interest community statutes with new transparency, governance, and consumer-protection requirements for HOAs, townhome associations, and condominium communities.
The context matters: roughly a quarter of Minnesotans live in an HOA, and about 82% of new homes are built inside one. Lawmakers heard years of testimony about surprise assessments, opaque contracting, and boards signing six-figure deals without competitive pricing. This law is the response.
Signed: May 2026 (HF1268/SF1750)
Most provisions effective: January 1, 2027, with a transition window for associations to update governing documents
Who it covers: Homeowners associations and common interest communities in Minnesota — townhome associations, condo associations, and HOAs
The law covers a lot of ground — meeting transparency, fine caps, retaliation bans, a new HOA termination process. But for boards and property managers planning exterior capital projects, two sections matter most: the competitive bidding requirement and the conflict-of-interest rules.
The 3-Bid Rule, In Plain English
Under the new law, an association board must solicit a minimum of three written competitive bids before entering into a contract for property maintenance, construction, repair, or reconstruction services estimated to cost at least $50,000.
For exterior work in a townhome or condo community, that threshold is low. Consider what typical Twin Cities multifamily projects cost:
- Townhome community roof replacement (multiple buildings): routinely $200,000–$1,000,000+
- Siding replacement across a community: often $300,000+
- Gutter and fascia replacement community-wide: frequently crosses $50,000
- Deck or balcony reconstruction programs: almost always above the threshold
In practice, nearly every meaningful exterior capital project your association undertakes after January 1, 2027 will require a documented 3-bid process. A board that signs a $250,000 roofing contract with a single quote in the file isn't just making a bad decision anymore — it's out of compliance with state law, and individual unit owners now have clearer standing to challenge it.
The Conflict-of-Interest Rules Nobody Is Talking About
The bidding requirement is getting the headlines. The inducement ban will change more behavior.
Under the new law:
- Board members cannot participate in deliberations or vote on any contract in which they or a family member has a financial interest.
- Board members and property managers cannot solicit or accept money or any other compensation from anyone as an inducement to vote for or enter into a contract.
That second provision targets a quiet industry practice: referral fees, kickbacks, and "marketing arrangements" between contractors and the property management companies that steer association work. Under the new law, a property manager who accepts compensation from a contractor in exchange for influencing a contract award is breaking state law — and so is the arrangement itself.
For unit owners and boards, this is good news: the contractor your community hires should win the work on scope, price, and quality — not on who paid for access. For boards, it also means a new diligence item: ask your management company, in writing, whether it receives any compensation from vendors it recommends. After January 1, 2027, the answer needs to be no.
No, You Don't Have to Take the Lowest Bid
This is the most common misreading of the law, so let's be precise: the statute requires boards to solicit three written competitive bids. It does not require boards to accept the lowest one.
Your board's fiduciary duty is unchanged — make an informed decision in the association's best interest. The bid requirement gives the board (and the owners watching) a documented basis for that decision. Boards can and should weigh:
- Scope completeness — does the bid address the actual condition of the property, or just the visible surface?
- Documentation quality — inspection reports, photos, measurements, and existing-condition evidence
- Licensing, insurance, and manufacturer certifications — which determine what warranties your association can actually receive
- Warranty terms — a cheaper roof with a weaker warranty is often the more expensive roof
- Multifamily experience — occupied-community logistics, resident communication, phased scheduling
- References on comparable association projects
A low bid against a vague scope is how communities end up with change orders, disputes, and special assessments. The law forces price competition; your board's job is still to buy the right project, not the cheapest piece of paper.
The Real Compliance Problem: Making Three Bids Comparable
Here's what boards will discover in 2027: getting three bids is easy. Getting three comparable bids is the hard part.
If you call three contractors and say "bid our roofs," you'll get back three different projects: different materials, different assumptions about decking damage, different ventilation approaches, different exclusions buried in different fine print. Your board ends up comparing a $480,000 bid, a $610,000 bid, and a $540,000 bid that describe three different scopes — which means the 3-bid file in your minutes doesn't actually demonstrate a competitive process. It demonstrates confusion.
The fix is to flip the order of operations:
- Document existing conditions first. A thorough inspection — ideally with aerial drone imagery and thermal scanning that reveals moisture and damage you can't see from the ground — establishes what the project actually is.
- Write one scope of work. Materials, specifications, quantities, known deficiencies, exclusions. One document, defined before any contractor prices it.
- Have every contractor bid that scope. Now price differences mean something, and the board can evaluate quality and qualifications on top of a true apples-to-apples baseline.
- Keep the record. The inspection report, the scope, the three bids, and the board's written rationale for its selection. That file is your compliance evidence and your defense if a decision is ever challenged.
The principle: the scope document is the foundation of a compliant bid process. Boards that invest in documentation before bidding get real competition, fewer change orders, and a defensible record. Boards that skip it get three incomparable numbers and a false sense of compliance.
A Board Checklist for the New Law
| Timing | Action | Why |
|---|---|---|
| Now – Fall 2026 | Inventory all capital projects likely to exceed $50,000 in the next 3–5 years (use your reserve study) | Know which upcoming decisions fall under the bid requirement |
| Now – Fall 2026 | Ask your management company in writing whether it receives any vendor compensation | Inducement ban — conflicts must be eliminated, not just disclosed |
| Fall 2026 | Adopt a written bid policy: scope-first process, evaluation criteria, documentation standards | Boards with a policy comply by default; boards without one improvise under pressure |
| Before each project | Commission an independent existing-conditions inspection and a single written scope of work | Comparable bids require a common baseline |
| At each award | Record the three bids, the evaluation, and the board's rationale in the minutes | The paper trail is the compliance — and the defense |
| Ongoing | Review the full law with your association's attorney | The bill covers far more than bidding — fines, meetings, notices, and more |
How Hoyt Exteriors Fits Into a 3-Bid World
We'll be direct: we like this law.
Hoyt Exteriors has served Twin Cities townhome associations, condo communities, and HOAs since 2000, and our entire model was built for exactly the world this statute creates — one where work is won on documentation, scope quality, and trust instead of relationships and steering.
Bid-Ready Documentation, Before You Commit to Anything
Our HOA Scan program flies your entire community with professional drones and FLIR thermal imaging before we quote a dollar. You receive board-ready documentation: high-resolution aerial imagery of every roof surface, thermal maps showing moisture intrusion invisible from the ground, and a written, prioritized scope of existing conditions. That documentation does double duty under the new law — it tells your board what the project really is, and it gives every bidder a common baseline so your three bids are actually comparable.
We Compete on the Record
Put us in your three bids. We'll show up with measured scopes, thermal evidence, GAF Master Elite certification (held by fewer than 1% of contractors nationally, with the enhanced warranties to match), and 25 years of occupied-community experience. If another contractor beats us on a defined scope with comparable qualifications, your community wins either way — that's the point of the law, and we're comfortable being judged by it.
No Spiffs. Ever.
We do not pay referral fees, kickbacks, or "marketing fees" to property managers or board members — a practice that is now illegal in Minnesota, and was never how we did business. The company your dad tells you to call doesn't need to pay for the introduction.
Frequently Asked Questions
Planning a 2027 Capital Project? Start With the Scope.
A free HOA Scan gives your board the existing-conditions documentation and written scope that a compliant 3-bid process is built on — drone imagery, thermal moisture mapping, and a board-ready report. No commitment, no pressure. Then bid it out to three contractors, including us. We're comfortable competing on the record.
This article summarizes Minnesota's 2026 HOA reform legislation (HF1268/SF1750) for general information and is not legal advice. Statutory details, effective dates, and exceptions should be confirmed with your association's attorney. Sources: Minnesota House Session Daily coverage of HF1268/SF1750 (April 2026); Minnesota Office of the Revisor of Statutes, Chapter 515B.