This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).








Anthony Paul Neuman,





Innsbruck North Townhouse Assoc.,




Filed August 14, 2001

Affirmed as modified

Schumacher, Judge


Anoka County District Court

File No. C8007746



Michael T. Kallas, Kallas & MacDonald Ltd., 4930 West 77th Street, Suite 210, Edina, MN 55435-4808 (for respondent)


Michael B. Chase, 2102 Firstar Center, 101 East Fifth Street, St. Paul, MN 55101 (for appellant)



            Considered and decided by Schumacher, Presiding Judge, Stoneburner, Judge, and Parker, Judge.*

U N P U B L I S H E D   O P I N I O N


            Appellant Innsbruck North Townhouse Assoc. challenges the district court's application of the Minnesota Common Interest Ownership Act (MCIOA), Minn. Stat. §§ 515B.1-101 to 515B.4-118 (1998 & Supp. 1999), contending that the district court erroneously found that respondent Anthony Paul Neuman was not liable for a special assessment levied by Innsbruck.  We affirm the district court's interpretation of the relevant MCIOA provision and modify the district court's award to Neuman.


            Innsbruck manages a residential townhouse complex in Fridley.  Roger Kuehn owned a unit within the complex.

            In February 1999, Innsbruck's board of directors voted to initiate a project to replace the siding on some of the residential units within the complex.  Innsbruck's property manager informed Kuehn that the siding on his unit would soon be replaced in accordance with the board's decision and that he would be assessed the costs therefrom, estimated at $8,080.  Subsequently, however, the board decided to delay the project and concomitant assessments until some indefinite date in 2000. 

            Later that same year, Kuehn sold his unit to Neuman.  Kuehn provided to Neuman relevant documents, including a resale disclosure certificate prepared by Innsbruck's property manager dated September 7, 1999.  Neither the disclosure certificate nor its supporting documents revealed that the board had decided to impose a special assessment in 2000.  Innsbruck's property manager did, however, orally inform Neuman of the pending special assessment and that the assessment for Kuehn's unit would be $5,500 to $6,000.  Closing occurred on the sale of Kuehn's unit on September 24, 1999.

            On February 9, 2000 the Innsbruck board of directors sent a letter to Neuman informing him of an assessment of $8,080.  Neuman disputed his liability for the special assessment, claiming that he had not been provided adequate notice of the assessment prior to closing.  After unsuccessful attempts to obtain relief from the board, Neuman paid the full amount of the assessment and then commenced an action in conciliation court to recover all or a portion of the amount paid.  The conciliation court dismissed Neuman's action with prejudice, and Neuman appealed to the district court for trial de novo.  Following trial, the district court found that Neuman was entitled to judgment against Innsbruck for the full amount of the assessment of $8,080.


            This case requires us to interpret MCIOA and to apply its provisions to the undisputed facts.  Statutory construction is a question of law which we review de novo, Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn. 1998), as is application of a statute to the undisputed facts of a case.  Boubelik v. Liberty State Bank, 553 N.W.2d 393, 402 (Minn. 1996). 

            MCIOA requires that "in the event of a resale of a unit by a unit owner * * * the unit owner shall furnish to a purchaser * * * a resale disclosure certificate from the association."  Minn. Stat. § 515B.4-107(a)(3) (Supp. 1999).  The resale disclosure certificate "shall" contain, among other items, a statement of

(i)        the installments of annual common expense assessments payable with respect to the unit, and the payment schedule;

(ii)       the installments of special common expense assessments, if any, payable with respect to the unit, and the payment schedule; and

(iii)     any plan approved by the association for levying certain common expense assessments against fewer than all the units * * * and the amount and payment schedule for any such common expenses payable with respect to the unit * * *.


Id. § 515B.4-107(b)(2)(i)-(iii) (Supp. 1999).  Further, the certificate "shall" contain "a statement of any extraordinary expenditures approved by the association, and not assessed, for the current and two succeeding fiscal years."  Id. § 515B.4-107(b)(4) (Supp. 1999).  MCIOA provides for a remedy if a townhouse association fails to disclose assessments on the resale disclosure certificate; "[a] purchaser is not liable for any unpaid common expense assessments, including special assessments * * * not set forth in the [resale disclosure] certificate."  Id. § 515B.4-107(e) (Supp. 1999). 

            Here, there is no dispute that Innsbruck failed to include the planned $8,080 special assessment on Neuman's resale disclosure certificate, thereby violating the requirements of MCIOA.  Innsbruck argues, however, that Neuman is not entitled to a statutory remedy.  Innsbruck claims that the $8,080 special assessment at issue had been approved but not levied at the time the resale disclosure certificate was prepared; since the special assessment at issue was not due and payable at the time the certificate was prepared, Innsbruck claims that the special assessment was not "unpaid" within the meaning of MCIOA.

            Innsbruck further claims that the following sentence applies to Neuman and precludes relief that would otherwise be available to him: "A purchaser is not liable for the amount by which the annual or special assessments exceed the amount of annual or special assessments stated in the certificate for assessments payable in the year in which the certificate was given * * *."  Id. § 515B.4-107(e).   Innsbruck reasons that, although it failed to disclose the 2000 special assessment on the 1999 resale disclosure certificate, the 2000 special assessment did not become "payable in the year in which the certificate was given" and therefore Neuman cannot recover under this provision.  Because we hold that another sentence is applicable and provides a remedy for Neuman, we do not further examine the merits of this argument.

            Where the language of a statute is clear and not reasonably subject to more than one interpretation, we will not engage in further statutory construction.  Owens ex rel. Owens v. Water Gremlin Co., 605 N.W.2d 733, 737 (Minn. 2000).  The plain meaning of the term "unpaid" is simply "[n]ot yet paid."  American Heritage College Dictionary 1478 (3d ed. 1997).  Innsbruck contends that this provision should be interpreted to mean that which is not yet paid and due immediately at this time.  We hold that under the plain language of MCIOA, "unpaid" special assessments encompasses those special assessments that have been approved but not yet levied and are among the items that MCIOA requires a townhouse association to disclose in a resale disclosure certificate.

Even if we were to engage in further statutory construction, we would reach the same conclusion.  "The object of all interpretation and construction of laws is to ascertain and effectuate the intention of the legislature."  Minn. Stat. § 645.16 (2000).  The purpose of the relevant MCIOA provisions is to compel townhouse associations—which have the best access to information concerning newly-approved special assessments—to voluntarily share this information with prospective purchasers.  See Uniform Common Interest Ownership Act § 4-109, cmt. 3 (1994), reprinted in 7 Uniform Laws Ann. 625 (West 1997).  If we were to adopt Innsbruck's interpretation of the term "unpaid," we would leave Neuman without a statutory remedy for Innsbruck's failure to disclose an approved special assessment, thereby removing any incentive for Innsbruck to make the required disclosures.  Such a construction would eviscerate MCIOA and would not effectuate the intention of the legislature. Accordingly, we affirm the district court's interpretation of MCIOA.

            Nevertheless, we are not unmindful of the windfall that Neuman stands to receive were we to affirm the district court's $8,080 award.  It is undisputed that Innsbruck's property manager orally informed Neuman of the special assessment at issue prior to the time that he closed on the unit and that Neuman knew that he was to be charged as much as $6,000 for the special assessment.  We therefore conclude that, although Innsbruck's disclosure did not meet the strict requirements of MCIOA, Innsbruck substantially complied with the statutory requirements by orally disclosing the information that should have been contained within the written resale disclosure certificate.  In the statutory context, substantial compliance is "compliance in respect to essential matters necessary to assure the reasonable objectives of the statute."  Nedved  v. Welch, 585 N.W.2d 238, 240 (Iowa 1998) (citation omitted).

The object of the relevant provisions of MCIOA is to compel townhouse associations to disclose special assessments to prospective unit purchasers.  See Uniform Common Interest Ownership Act § 4-109, cmt. 3 (1994), reprinted in 7 Uniform Laws Ann. 625 (West 1997).  Since Innsbruck's oral notification served to notify Neuman of the special assessment at issue, we hold that Innsbruck substantially complied with the statute to the extent of the oral disclosure.  Cf. Kossak v. Stalling, 277 N.W.2d 30, 32-33 (Minn. 1979) (actual notice by party who is to be notified by statute constitutes substantial compliance with statutory notice requirement even though party who was to give notice "did not comply with the express terms" of the statute).

Accordingly, we hold that Innsbruck did not comply with MCIOA disclosure requirements and therefore Neuman is not liable for the full $8,080 actual special assessment levied.  But we modify the district court's award to $2,080, representing the difference between the actual $8,080 assessment and the oral disclosure of a maximum of $6,000.

            Affirmed as modified.

            * Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.