Imagine that your homeowner association needs a $100,000 roof replacement. Your board contacts five qualified roofing contractors, but only two submit proposals. Can your association move forward, or must it keep searching for that elusive third bid?
This seems to be one of the most confusing parts of the legislation that was passed by St. Paul. And we get a lot of questions about it.
Beginning January 1, 2027, new competitive bidding requirements will apply to qualifying HOA maintenance, construction, repair and reconstruction contracts. But read on to see how boards can manage through this part of the law. There are some exceptions.
What Does the New Law Require?
Under SF 1750, enacted as Chapter 82 in May 2026, HOA boards or their property managers must solicit at least three written competitive bids before entering into qualifying contracts with estimated costs exceeding $50,000.
The intent is straightforward: promote transparency, encourage competition and protect homeowners from questionable contracting practices.
But the law recognizes that obtaining three bids isn’t always practical.
What If Three Bids Aren’t Available?
Minnesota’s legislation provides exceptions when associations cannot reasonably obtain multiple bids.
These include situations where:
- Multiple bids cannot be obtained despite reasonable efforts.
- Emergency repairs are necessary to protect homeowner health or safety.
- Significant property damage requires immediate attention.
- Work is covered by an existing warranty.
- Only one available vendor can provide the necessary services.
- Materials cost no more than $50,000 and volunteers provide labor without charge.
For example, if your association contacts several qualified roofing companies but receives only two proposals, the law does not necessarily prevent the board from proceeding.
However, documenting those efforts is essential.
Keep records of contractors contacted, dates, responses and reasons proposals were unavailable.
Selecting the Right Contractor
Another important consideration: The lowest bid doesn’t automatically win.
The law directs boards to evaluate proposals using reasonable business criteria, including contractor qualifications, project costs, warranties, responsiveness to bidding requirements and estimated completion time.
A contractor offering a lower price but limited experience or inadequate warranties may not represent the best value for homeowners.
Boards should also recognize potential conflicts of interest. Bids involving individuals affiliated with board members or property management personnel require disclosure, with written records maintained in meeting minutes.
Board members with specified financial interests are prohibited from participating in contract deliberations or voting.
Documentation Becomes More Important
The legislation requires associations to retain records of their bid-selection processes, evaluation criteria and awarded contracts for six years.
These records must also be available to homeowners under applicable statutory provisions.
This makes a consistent, written vendor-selection procedure especially valuable.
What Should HOA Boards Do Now?
With January 2027 approaching, boards should review their contracting procedures, discuss expectations with property managers and establish consistent methods for documenting bids and evaluating vendors.
Associations should also consult legal counsel about how the requirements apply to their particular circumstances.
The bottom line: Competitive bidding isn’t simply about obtaining three prices. It’s about making informed, defensible decisions with homeowners’ money.
For volunteer HOA leaders, good vendor management means protecting association finances, maintaining community property and earning homeowner confidence.
Learn more: Visit the HOA Leadership Network SF 1750 Education Center for additional information. We have a variety of resources there to help you.
