Minnesota HOA Boards: The New Competitive-Bidding Rule for $50,000+ Projects

It takes effect January 1, 2027. If your board has a roof, paving, siding, or major repair project on the 2027 calendar, the new process applies to it.

Why the Legislature added it

The bill traces partly back to a 2025 dispute in Lakeville, where 147 homeowners got notices asking each of them for about $17,000 toward a $2.5 million roofing project, with contractors showing up days later. Owners sued, the board was voted out, and the story became a rallying point for the bill's author, Rep. Kristin Bahner. The fix lawmakers landed on: make big-ticket contracts go through a documented, competitive process that owners can check afterward.

What the rule requires

Paraphrasing the new paragraphs of § 515B.3-103:

1. Three written bids above $50,000. Before entering into any contract for property maintenance, construction, repair, or reconstruction services with an estimated cost exceeding $50,000, the board or property manager must solicit at least three written competitive bids.

2. Disclosure of affiliated bidders. Any bid from a person affiliated with a board member (including a family member) or with the property manager must be disclosed before the board considers it or votes.

3. Selection on reasonable business criteria. The board must review all bids and pick a vendor using reasonable business criteria, including:

- the cost of the project

- the contractor's qualifications

- available warranties

- how well the bidder met the solicitation requirements

- the estimated time to complete the project

The statute says "including but not limited to," so the board can weigh other legitimate factors too, like references, insurance, or responsiveness. The point is that the reasoning should be written down.

4. Six years of records. The association must keep a record of the bid selection process, including the criteria used, and the contracts awarded for the last six years. Those records are association records, so owners can ask to inspect them.

The exceptions

The three-bid requirement doesn't apply when:

• multiple bids can't be obtained despite reasonable efforts
• emergency repairs are needed to protect owners' health or safety
• significant damage to the property needs immediate attention to prevent further damage
• the work is covered by a warranty
• only one vendor is able to do the work
• materials cost $50,000 or less and the labor is volunteered

Expect the first two to be tested. "We couldn't get three bids" and "it was an emergency" only hold up if the board can show the effort or the urgency. Save the declined-to-bid emails and the photos of the damage.

The conflict-of-interest rules that come with it

The same section adds two conduct rules that apply whether or not a contract crosses $50,000:

- A board member **may not deliberate on or vote on** a contract in which the board member or a family member has a material financial interest.

- A board member may not solicit or accept money or other compensation as an inducement to vote for a maintenance, construction, repair, or reconstruction contract. Property managers are covered by a parallel restriction.

In practice, the conflicted director steps out of the discussion and the vote, and the minutes should say so.

Who's covered

Chapter 82 states that its changes apply to common interest communities **created before, on, or after** enactment, so older associations aren't automatically exempt. The existing applicability rules in § 515B.1-102 still matter, though, especially for pre-1994 communities and small planned communities. If you aren't sure where your association falls, ask counsel before your first 2027 contract.

Board checklist before January 1, 2027

• List every 2027 project likely to exceed $50,000, and start bidding the early ones in the fall so you aren't rushing in January.
• Adopt a written procurement policy covering the three-bid threshold, the selection criteria, and how exceptions get documented.
• Create a standard bid packet (scope, specs, insurance requirements, deadline) so bids are comparable and the "met the solicitation requirements" criterion means something.
• Collect conflict disclosures from every director and your management company, and refresh them annually.
• Add a minutes template for contract votes: bids received, affiliated-bidder disclosures, recusals, criteria applied, and the vendor selected.
• Define "emergency" in the policy and require a short written record whenever the board relies on an exception.
• Set up six-year retention for bid files and awarded contracts, stored where they can be produced for owner inspection.
• Check your management agreement so the manager's bidding duties match the statute.

FAQ

• When does Minnesota's HOA competitive-bidding rule take effect?

January 1, 2027. The law was signed May 12, 2026, but the bidding provisions in § 515B.3-103 start with the new year.

• How many bids does a Minnesota HOA need?

At least three written competitive bids for maintenance, construction, repair, or reconstruction contracts with an estimated cost over $50,000.

• Does the board have to pick the lowest bid?

No. The board must use reasonable business criteria, including cost, qualifications, warranties, compliance with the bid solicitation, and timeline, and keep a record of the criteria it used.

• Can a board member's company bid on an HOA project?

The law doesn't ban it, but the affiliation must be disclosed before the board considers the bid, and that board member can't deliberate or vote on a contract in which they or a family member has a material financial interest.

• What if there's an emergency?

Emergency repairs to protect health or safety, and immediate work to prevent further significant damage, are exempt from the three-bid rule. Document why the situation qualified.

• How long must bidding records be kept?

Six years, including the criteria used and the contracts awarded.

• Make the paper trail easy

The new rule is mostly about documentation: bids, disclosures, criteria, and six years of records an owner can ask to see. My Front Yard helps boards keep governing documents and compliance records organized and track upcoming deadlines, so a January 1 effective date doesn't slip past a volunteer board. [See how it works →]

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*Sources: 2026 Minn. Laws ch. 82 (SF 1750), Minnesota Revisor of Statutes; Minnesota House Research, Act Summary, Chapter 82, 2026 Regular Session; Greenstein Sellers, "New HOA Legislation: The HOA Bill of Rights Will Impact Minnesota Homeowner Associations"; Madgett Law, "Minnesota Rewrote HOA Law in 2026"; FOX 9, coverage of the bill signing; Hoodline, coverage of the Lakeville roofing dispute.*