by Raymond Daniel Burke | May 1, 2012
In a unanimous opinion filed on April 30, 2012, the Maryland Court of Appeals has established that provisions the Maryland Consumer Protection Act apply to the information contained in a condominium resale certificate, and a council of unit owners and property manager can be liable for unfair and deceptive trade practices if the information has a tendency to mislead the purchaser, even though they are not party to the sales contract, and even if they have otherwise complied with the condominium resale disclosure requirements contained in Section 11-135 of the Maryland Condominium Act. I have previously written about an earlier decision of the Court of Appeals in the case of MRA Property Management, Inc., et al. v. Armstrong, No. 93, Sept. Term 2007, filed on October 25, 2011. A majority of the Court held that the Maryland Consumer Protection Act applies to purchases of condominium units with respect to the information required to be provided by a council of unit owners in the resale certificate. The Court ruled that, where a council of unit owners and its property management company violate the resale certificate disclosure obligations imposed by Md. Real. Prop. Code Ann. Sec. 11-135, “they engage in unfair and deceptive trade practices ‘in the sale of consumer realty.’” The Court specifically held that such a violation of the Consumer Protection Act can occur even though the defendants were not parties to the sale of the unit, were not “merchants.” 
Subsequently, however, in response to motions for reconsideration filed on behalf of both sides in the appeal, the Court withdrew and agreed to reconsider its opinion. Following re-argument, the Court has now issued its final opinion, holding that the statutory duties to provide the disclosure information required under Section 11-135 of the Condominium Act, “sufficiently implicated [the council and the property manager] in the entire transaction so as to impose liability under the Consumer Protection Act.” (more…)
by Raymond Daniel Burke | Apr 14, 2012
Section 11-131 of the Maryland Condominium Act provides significant warranty protections for the purchasers for new condominium units. Section 11-131 (a) codified the ruling in StarfishCondominium Ass’n v. Yorkridge Service Corp., and established that new home warranties under Section 10-203 “apply to all sales by developers” of condominiums, and that “a newly constructed private dwelling unit means a newly constructed or newly converted condominium unit and its appurtenant undivided fee simple interest in the common areas.” Specific warranties are applicable to certain specified components of both individual units and the common elements, and they are the obligation of the condominium’s developer. (more…)
by Raymond Daniel Burke | Mar 25, 2012
I was recently asked to again discuss the impled warranties under Maryland law. Pursuant to Md. Code Ann., Real Prop. Tit. 10, certain implied warranties are applicable to the sale of every newly constructed home in Maryland. These warranties are applicable to all “improvements,” which are defined as “every newly constructed private dwelling unit, and fixture and structure which is made part of a newly constructed private dwelling unit at the time of its construction.” They are enforceable against a “vendor,” defined as “any person engaged in the business of erecting or otherwise creating an improvement on realty, or to whom a completed improvement has been granted for resale in the course of his business.” These broadly worded implied warranties provide that the improvement is: (1) Free from faulty materials; (2) constructed according to sound engineering standards; (3) constructed in a workmanlike manner; and (4) fit for habitation. However, it is expressly provided that these warranties “do not apply to any condition that an inspection of the premises would reveal to a reasonably diligent purchaser at the time the contract is signed. Nevertheless, there is a fifth implied warranty that is not subject to the inspection exception. This is the implied warranty of fitness for a particular purpose. “If the purchaser, expressly or by implication, makes known to the vendor the particular purpose for which the improvement is required, and it appears that the purchaser relies on the vendor’s skill and judgment, there is an implied warranty that the improvement is reasonably fit for the purpose.” (more…)
by Raymond Daniel Burke | Mar 6, 2012
Ocean City area residents and visitors should look for information on this blog in the Ocean City Spring Home, Condo and Outdoor Show Program. The 28th annual show will take place at the R.E. Powell Ocean City Convention Center for three days this week: Friday March 9 from noon to 6:00 p.m., Saturday March 10 from 10:00 a.m. to 6:00 p.m., and Sunday March 11 from 10:30 a.m. to 3:30 p.m. The program will be available at the show, and can also be found as an insert in this week’s edition of The Bayside Gazette and Ocean City Today.
by Raymond Daniel Burke | Mar 6, 2012
Under Section 11-114 of the Maryland Condominium Act, and Section 11B- 111.6 of the Maryland Homeowners Association Act require that condominium councils of unit owners and homeowner associations maintain property and liability insurance. House Bill 741 pending in the current session of the Maryland General Assembly would extend an insurance requirement to a management company that contracts with the condominium or homeowners association. The proposed language provides that, if a condominium or homeowners association “contracts with a management company for operation or maintenance services,” such “management company shall purchase fidelity insurance that provides for the indemnification of the [condominium or homeowners association] against loss resulting form acts or omissions arising from fraud, dishonesty, or criminal acts by any agent or other employed of the management company.” (more…)
