by Raymond Daniel Burke | Nov 6, 2024
During the 2024 Session, the Maryland General Assembly passed Senate Bill 665 and House Bill 1496, which changed the amendment process in Section 11-103(c) of the Maryland Condominium Act so, as to lower the percentage required for approval of an amendment from 80 percent to 66 -2/3 percent of the total eligible voters in the condominium. The legislation was signed by the Governor and took effect on October 1, 2024. However, the reduced percentage does not apply in the event that any units are still owned by the developer, in which case the 80 percent requirement is still applicable. Additionally, the reduced percentage requirement does not apply to a purely corrective amendment of a typographical error under Section 11-103.1, which can be accomplished by the condominium’s board of directors. Also remaining unchanged is the provision that the council of unit owners may amend the declaration to add or repeal a suspension of privileges provision by the affirmative vote of at least 60 percent of the total eligible voters of the condominium.
by Raymond Daniel Burke | Oct 22, 2024
House Bill 1227, passed during the 2024 session of the Maryland General Assembly and signed into law by Governor Moore, changes the special insurance requirements for “detached” condominium units that arose from legislation passed during the 2023 session. The 2023 legislation amended Section 11-114 of the Condominium Act concerning the mandatory insurance that is required to be maintained by the Council of Unit Owners. Those changes, which took effect on October 1, 2023, differentiated between “attached” and “detached” units for insurance purposes. Generally, a Condominium Council is required to maintain “[p]roperty insurance on the common elements and units, exclusive of improvements and betterments installed in units by unit owners other than the developer, insuring against those risks of direct physical loss commonly insured against, in amounts determined by the council of unit owners but not less than any amounts specified in the declaration or bylaws.” The 2023 law provided that the Council is only required to maintain insurance on “attached” units. With respect to detached units, the 2023 law specifically provided that the Council was required to maintain insurance only on the common elements and not any portion of the detached units. The new law, which took effect on October 1, 2024, now provides that the exception for detached units only applies to detached units “located within a condominium composed entirely of similar detached units.” The new law also requires that the Council must “give annual notice, in writing, of any obligation of an owner of a residential, detached unit to obtain property insurance coverage on the unit.” It also obligates the Council to provide prompt notice to unit owners of any change in insurance coverage requirements. Accordingly, the Council must now provide notice to owners of detached units that were not covered by the Council as a result of the 2023 law, but are now covered by the Council under the 2024 law because they are not located in a condominium composed entirely of detached units.
by Raymond Daniel Burke | Aug 13, 2024
Senate Bill 665, which passed during the 2024 session of the Maryland General Assembly and has been signed into law by the Governor, reduces the percentage of unit owner votes needed to amend a condominium declaration from 80 percent to 66 2/3 percent. The new lower percentage applies only in the event that there are no units still owned by the condominium’s developer. Where the developer continues to own any units, the 80 percent requirement still applies. The 80 percent requirement also will continue to apply to a corrective amendment under Section 11-103.1 of the Condominium Act. The new law amends Section 11-103(c) of the Condominium Act and will take effect on October 1, 2024. It retains all of the previous limitations on declaration amendments:
(i) Except to the extent expressly permitted or expressly required by other provisions of this title, an amendment to the declaration may not change the boundaries of any unit, the undivided percentage interest in the common elements of any unit, the liability for common expenses or rights to common profits of any unit, or the number of votes in the council of unit owners of any unit without the written consent of every unit owner and mortgagee.
(ii) An amendment to the declaration may not modify in any way rights expressly reserved for the benefit of the developer or provisions required by any governmental authority or for the benefit of any public utility.
(iii) Except to the extent expressly permitted by the declaration, an amendment to the declaration may not change residential units to nonresidential units or change nonresidential units to residential units without the written consent of every unit owner and mortgagee.
(iv) Except as otherwise expressly permitted by this title and by the declaration, an amendment to the declaration may not redesignate general common elements as limited common elements without the written consent of every unit owner and mortgagee.
(v) 1. Except as provided in subparagraph (vi) of this paragraph, if the declaration contains a provision requiring any action on the part of the holder of a mortgage or deed of trust on a unit in order to amend the declaration, that provision shall be deemed satisfied if the procedures under this subparagraph are satisfied.
2. If the declaration contains a provision described in subsubparagraph 1 of this subparagraph, the council of unit owners shall cause to be delivered to each holder of a mortgage or deed of trust entitled to notice a copy of the proposed amendment to the declaration.
3. If a holder of the mortgage or deed of trust that receives the proposed amendment fails to object, in writing, to the proposed amendment within 60 days after the date of actual receipt of the proposed amendment, the holder shall be deemed to have consented to the adoption of the amendment.
(vi) Subparagraph (v) of this paragraph does not apply to amendments that:
1. Alter the priority of the lien of the mortgage or deed of trust;
2. Materially impair or affect the unit as collateral; or
3. Materially impair or affect the right of the holder of the mortgage or deed of trust to exercise any rights under the mortgage, deed of trust, or applicable law.
by Raymond Daniel Burke | Jun 17, 2024
A new law, passed by both houses during the 2024 session of the Maryland General Assembly and signed by Governor Moore, permits a condominium to lease clean energy equipment as part of the common elements. House Bill 216/Chapter 253 empowers a condominium board of directors to “grant leases in excess of 1 year or similar interests affecting the common elements of the condominium for the installation and use of leased clean energy equipment.” For purposes of this provision, clean energy equipment includes “electric vehicle recharging equipment, solar energy equipment, and energy storage systems.” The legislation amends Section 11-125(f) of the Maryland Condominium Act, which generally provides that a declaration or bylaws may give the council of unit owners authority to grant easements, rights-of-way, licenses and leases in excess of one year affecting the common elements, with the approval of two-thirds of the unit owners and the consent of mortgagees. New subsection (5) gives a majority of the board of directors authority to approve the leasing of clean energy equipment, without unit owner or mortgagee approval, by a vote at a board meeting with 30-days’ notice to the unit owners. It is further provided that a mortgagee or group of mortgagees may not overrule the board’s vote. The new law will take effect on October 1, 2024.
by Raymond Daniel Burke | May 13, 2024
A new law, that will take effect on October 1, 2024, removes some of a council of unit owners’ resale disclosure requirements, and also provides that disclosure of knowledge concerning the presence of asbestos be made by the selling unit owner. Both houses of the General Assembly (House Bill 143 and Senate Bill 292), passed legislation, which has been signed into law by Governor Moore, amending Section 11-135 of the Condominium Act. The new provisions remove the current requirements that a resale certificate provided to a prospective purchaser by the council include (1) a description of any recreational or other facilities which are to be used by the unit owners or maintained by them or the council, and a statement as to whether or not they are to be a part of the common elements; (2) a statement as to whether the council has entered into any agreement that settles or releases the council’s claims related to common element warranties under § 11-131; and (3) a statement as to whether the board of directors has disclosed to the council the board’s intention to enter into an agreement for the purpose of settling a disputed common element warranty claim under § 11-131. These required disclosures will be deleted when the law takes effect.
Additionally, the new law removes the council’s disclosure requirement regarding knowledge of the presence of asbestos. Instead, it changes the council’s requirements under Section 11-135(g)(10) concerning disclosure of knowledge of health and building code violations to include asbestos. This provision will now require: “A statement as to whether the council of unit owners has
knowledge of any violation of the health or building codes with respect to the unit, the limited common elements assigned to the unit, or any other portion of the condominium, including any violation of the health or building codes related to asbestos.”
Also added is requirement that disclosure with regard to asbestos now be made by the selling unit owner under new Section 11-135(a)(5)(vii), which provides that the unit owner must disclose knowledge “of the presence of asbestos in the unit, including a description of the location of the asbestos, and whether abatement has been performed in the unit during the occupancy of the owner.”
Finally, the new legislation amends Section 11-126 of the Condominium Act to require that, in an initial sale of a unit, the developer must provide “a statement as to whether the vendor has actual knowledge of the presence of asbestos, including a description of the location of the asbestos, whether abatement has been performed, and the date of any abatement.”
