Maryland Court Decisions Bring Uncertainty To Resale Disclosure Requirements
The interpretation of condominium resale disclosure requirements remains unclear as a result of certain Maryland court decisions and the Maryland General Assembly’s failure to provide clarification during the 2013 Session. Those disclosure requirements are intended to provide prospective condominium purchasers with sufficient information about potential expenses so as to permit them to make an informed purchase decision. Uncertainty arose when the Maryland Court of Appeals, in a footnote concerning an issue not even before the Court, offered the opinion that the required disclosure of known code violations, at the time of resale of a unit, under Section 11-135 of the Maryland Condominium Act, refers only to “charged violations.” While this observation was offered in dicta, and is not binding law, it suggested that knowledge of building or health code violations, that ultimately could lead to expensive repairs, need not be disclosed to a would-be purchaser unless the condition had been formally cited by the local code authority. During the 2013 session, legislation was considered that would have touched on this issue by requiring disclosure of “potential” special assessments, but the proposed new law was never enacted. Subsequently, in at least one unreported opinion, the Maryland Court of Special Appeals relied on the Court of Appeals statement to hold that knowledge of a violation requires “notice or citation from an official enforcement agency.” While the unreported opinion is also not binding law, the two decisions have clearly suggested a limited disclosure requirement that may not provide the level of information intended by the statute. (more…)
