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Bill In Maryland Legislature Would Add Business Negotiations As A Further Basis For A Closed Meeting Of A Condominium’s Board of Directors

House Bill 388, now pending before the General Assembly, would permit a condominium’s board of directors to hold a closed meeting to discuss negotiations pertinent to a business transaction.  It would amend Section 11-109.1 of the Maryland Condominium Act to permit closed board meetings for “consideration of the terms and conditions of a business transaction in the negotiation stage if the disclosure could adversely affect the economic interests of the council of unit owners.” (more…)

Proposed Insurance Requirement for Property Management Companies Fails in the Maryland Legislature

Another bill effecting condominiums and homeowners association that failed to pass during the 2012 session of the Maryland General Assembly related to insurance coverage for property management companies.  House Bill 741 would have required management companies, employed by condominiums, homeowners associations or housing cooperatives, to purchase fidelity insurance that would indemnify the assoication from an act or omission arising from fraud, dishonesty or criminal acts by an agent of employee of the mangagement company.  The proposed law received an umfavorable report from the Environmental Matters Committee, and never came to a vote.

Proposed Maryland Legislation Would Have Created State Board To Regulate Property Management Companies

House Bill 433 and Senate Bill 372 from the 2012 session of the Maryland General Assembly proposed the creation of a State Board of Common Interest Community Managers to regulate the provision of property management services to common interest communities, including condominiums, homeowner associations and housing cooperatives.  The legislation would have required the licensing of community association property managers through the new State Board.  It also would have required condominiums with more than 10 units, associations with more than 50 lots, and any community that is professionally managed, to register with the Board.  The bill was considered by the Environmental Matter Committee, but never came to a vote.

New Maryland Law Requires Posting of Utility Bill Default Notices and Authorizes Entry To Condominium’s Common Area

Effective October 1, 2012, entities that bill Condominiums Councils for water or sewer charges are required to post notices if utility bills are in arrears for more than 60 days, and are authorized to enter the common area of the condominium to post a notice of the default.  Under House Bill 884 (Chapter 684) from the 2012 session of the General Assembly, public utilities, sanitary commissions, political subdivisions, and the public service commission, when directly bill the governing bodies of condominiums for utility charges, are required to post notices on the condominium property that a utility bill is in arrears.  Previously existing law requires that such utility providers provide notice to property owners that service will be discontinued due to unpaid bills.  The new law amends various sections of the Annotated Code of Maryland as to condominiums to require that such notices be posted at the condominium, and authorizes entry into the common area for the purpose of posting the required notice.  Effected code provisions include Sections 9-662, 9-724 and 9-726.1 of the Environmental Code, and Sections 7-307.2 and 25-504 of the Public Utilities Code.

Amendment To Maryland Condominium Act Expands Council’s Right To Enter Units

The 2012 session of the Maryland General Assembly resulted in an amendment to the Condominium Act regarding the circumstances under which a council of unit owners may enter a condominium unit.  Section 11-125 of the Act previously provided that a council of unit owners, or its authorized designee, has “an irrevocable right and an easement” to enter units for the purpose of making repairs, where the work is “reasonably necessary for public safety or to prevent damage to other portions of the condominium.”  The 2012 amendment, House Bill 126 (Chapter 101) expands this authority to also permit entry to “investigate damage” in addition to actually undertaking repairs.  A proposal to remove the requirement that entry be limited to circumstances in which it is necessary for public safety or to prevent other damage was deleted from the final bill.  It is still required that the council make “a reasonable effort to give notice” to the unit owner that the unit will be entered for purpose of investigation or repair; except that notice is not required “in cases involving manifest danger to public safety or property.”  The amendment takes effect on October 1, 2012.

Green Buildings

During 2005, in Maryland’s venerable Eastern Shore seaport town of Crisfield, an ambitious redevelopment project commenced at the City Dock.  The Captain’s Galley is a luxury condominium complex consisting of a six-story building with 23 residential units, a heated pool, fitness center, boat slips, and a rooftop restaurant.  One notable component of the project specifications called for the construction to result in a “Green Building” that would obtain a “Silver Certification” in accordance with the U. S. Green Building Council’s Leadership in Energy and Environmental Design rating system, popularly known as LEED standards.  In doing so, the developer intended to qualify for more than $600,000 in tax credits.

            Captain’s Galley became a memorable project, not only because it was one of the first in Maryland to incorporate the LEED rating into the contract documents, but because it became one of first anywhere to result in litigation arising, in part, from the general contractor’s alleged failure to comply with the environmental design standards.  In the suit filed in the Circuit Court for Somerset County, the developer, along with other claims, sought damages for the loss of the tax credits as a consequence of the alleged failure of the building to meet the contractually specified LEED standards. (more…)