In 2017, the Minnesota legislature made several changes to the Minnesota Common Interest Ownership Act, Minn. Stat. 515B ("MCIOA"), the law governing most homeowner associations in Minnesota. One of these changes requires that associations adopt and distribute a formal Preventative Maintenance Plan ("PMP") by January 1, 2019. For more information on the specifics of these Plans, see our previous post about Preventative Maintenance Plans.
With our help, many associations have already drafted and distributed PMPs in advance of the upcoming deadline. For various reasons, some associations have not yet adopted a PMP. One common reason is that Boards of Directors incorrectly believe that an association's Reserve Study will bring them into compliance with the updated law. While Reserve Studies and PMPs are similar and can work together to outline the maintenance responsibilities in an association, they are not the same thing. Simply having a Reserve Study does not fulfill the PMP requirement.
Reserve Studies are long term budgeting plans and goals. They look at the components that associations are required to maintain and repair (for example roofs and siding) and determine how much money an association should save each year to fund those costs. Reserve Studies are an important part of long-term financial planning for Boards. If your association does not have one, it may be time to look into it.
PMPs, on the other hand, are intended to make sure that associations have a plan to perform routine maintenance and repairs. PMPs outline the yearly maintenance that is required to keep the components in good working order, so they continue to function for their expected useful life.
Said another way, a Reserve Study addresses how to budget for the long-term costs of repairs and replacement, while a PMP is a plan to perform ongoing and routine maintenance. This new provision of MCIOA requires that all associations adopt and distribute a PMP, even when the association has a reserve study.
The deadline to complete a PMP is January 1, 2019, so time is of the essence. Call us today if your association would like assistance in drafting a Preventative Maintenance Plan.
For more information on the specifics of these Plans, see our previous post about Preventative Maintenance Plans.