The following testimony was delivered in April 2024 before the Minnesota House Housing Finance and Policy Committee.

Prepared Testimony and Remarks
Julie Gugin, President, Minnesota Homeownership Center

Chair Howard and members of the Committee, my name is Julie Gugin. I am President of the non-profit Minnesota Homeownership Center. Thank you for the opportunity to testify today on behalf of HF 5032.

The Center believes that owning a home is the foundation for personal and community success. For more than 30 years, we’ve worked to educate buyers on the complicated process of owning and sustaining a home. We’ve carried out this work by partnering with community-based organizations throughout the state to offer unbiased homebuyer education, advising and foreclosure prevention services.

In our role as an intermediary, we also engage in other efforts to drive equitable access to homeownership, like monitoring and advocating on behalf of consumers’ and owners’ rights on issues like homeowner associations, or HOAs, and Common-Interest Communities, or CICs.

In our work, we encounter owners facing a variety of issues within their associations: legal actions including foreclosure; lack of or confusing communication among parties; uncertainty about governance structures; and more. This can be coupled with untimely responses from the HOA board and frequent referrals to attorneys for clarification, which causes the owner – not the association – to incur legal fees.

We recently worked with an owner who lost his home to foreclosure by the association. The first he learned of a significant assessment that the association had levied was when the association placed a lien on his property, giving him a short period of time to pay the lien. Unable to secure the funds on short notice, he lost his home of 18 years.

Issues related to homeowner associations are real, for all parties. In our many years of working on this issue, we’ve lacked a comprehensive understanding of the scope of the marketplace, prevailing practices in governance and management, the cost to homeowners, the impact of HOAs and CICs on the racial homeownership gap, and other matters. Furthermore, the current statutes related to CICs and HOAs are convoluted, making it difficult for owners and their advisors to understand legal rights and protocol.

As CICs and HOAs are increasing in number and prevalence, these issues are being exacerbated.

HF5032 will ensure that we establish a shared understanding of CICs and HOAs throughout Minnesota; that we create an awareness about the good and bad practices that are prevalent; and that we have the lived history, research and background we need to advance essential change.

In the 2023 session, we passed important changes to Minnesota Statute 515B, the Minnesota Common Interest Ownership Act. We ask that you support the continuation of that momentum by passing this bill.

Thank you all for your attention.