I will be speaking at the Community Associations Institute’s Delmarva Breakfast Conference on Friday, April 12, 2024 at the Atlantic Sands Hotel in Rehoboth, Delaware. My primary topic will be condominium and homeowner association resale disclosure requirements.
House Bill 55, now pending in the Maryland General Assembly, would authorize a county or municipality to “establish a local trust fund or other appropriate fund for the purpose of repairing or rehabilitating infrastructure with communities that are subject to the requirements of the Maryland Condominium Act or the Maryland Homeowners Association Act.” The bill, which would add new Section 1-1318 to the Local Government Article, is expressly intended to address circumstances in communities in which the original developer designated roads and other infrastructure a private components to be owned and maintained by the condominium associations or homeowners associations. The Bill’s preamble notes that owners living in such communities “are burdened by paying for repairs and services for the types of infrastructure that would otherwise be paid for by local governments, as well as paying property taxes that support this type of infrastructure in other condominium associations and homeowners associations with publicly managed infrastructure.” Any fund created pursuant to this proposed legislation could be used to repair “infrastructure that is traditionally maintained by the county or a municipality for the benefit of the public, including roads and storm management facilities,” but may not be used to repair recreational facilities used exclusively by homeowners and guests. Any such fund would be financed from property taxes paid by the members of the affected condominium or homeowners association. A county or municipality could establish eligibility requirements, but must prioritize those associations the exhibit the greatest need for repair or rehabilitation.
As previously reported, during the 2022 legislative session, the Maryland General Assembly passed new legislation requiring all condominiums, homeowner associations, and housing cooperatives to undertake regular reserve studies of common area components. The Governor did not sign the bill, but it became law under Art. II, Sec. 17(c) of the Maryland Constitution, which provides that a bill send to the Governor becomes law if the Governor does not veto the bill with 30 days of its presentment. Under the new law, which takes effect on October 1, 2022, a community that has had a reserve study conducted on or after October 1, 2018 must have that reserve study updated within five years from the date to that study, and every five years thereafter. A community that has not had a reserve study on or after October 1, 2018, must undertake one no later than October 1, 2023, and that study must also be updated every five years thereafter.
The Maryland General Assembly has passed new legislation requiring all condominiums, homeowner associations, and housing cooperatives to undertake regular reserve studies of common area components. Under House Bill 107, the reserve study requirement, which was previously applicable to only Prince George’s and Montgomery Counties, is applicable statewide. A community that has had a reserve study conducted on or after October 1, 2018 must have that reserve study updated within five years from the date to that study, and every five years thereafter. A community that has not had a reserve study on or after October 1, 2018, must undertake one no later than October 1, 2023, and that study must also be updated every five years thereafter. The bill has been sent to the Governor for signature into law.
House Bill 1061, now pending the the General Assembly, would authorize counties and municipalities in Maryland to create a fund to assist in the repair of infrastructure in condominiums and homeowner associations. It is intended to provide for repair and rehabilitation of property that is part a condominium or homeowners association, but of is a nature that would be “traditionally maintained by the county or municipality for the benefit of the general public, including roads and stormwater management facilities.” It would not apply to “recreational facilities used for the exclusive use or benefit of the members of a condominium association or homeowners association or their guests.” In addition to taxes and other appropriations, a portion of the property taxes paid by the condominium unit owners or homeowner association members would be allocated to the fund.
House Bill 140, now pending in the Maryland General Assembly, would make several amendments to the Maryland Condominium Act relating to governance during the period of developer control and, in all condominiums, would expand unit owner participation in meetings of the board of directors. In proposed new provisions to Section 11-109(c)(8) of the Maryland Condominium Act, the Bill would require a developer in control of a condominium to appoint a unit owner to the board of directors. Where a developer controlled condominium has a board of directors and 25% of the units have been sold, the developer would be required to appoint at least one unit owner, not affiliated with the developer, to the board. Where there is no board of directors, once 25% of the units are sold, the developer would be required to establish a board of directors, including at least one unit owner, not affiliated with the developer.
The Bill would also require and additional open agenda board meeting per year that provides an opportunity for unit owner comment. Section 11-109(c) presently requires that condominium boards hold at least one such meeting each year. House Bill 140 would amend this provision to require a board of directors to hold two such open agenda meetings per year. This requirement would also apply to board meetings during the period when the developer is still in control of the condominium.
Additionally, the Bill would add a new provision to Section 11-116 requiring that, during the period of developer control, the condominium’s books and records be maintained “separate and apart from the developer or of any other person.”
The Bill proposes to add similar provisions to the Maryland Homeowner Association Act. Please watch this blog for further developments on this legislative proposal.
The Maryland Condo Law Blog is written by Raymond Daniel Burke. One of the region's top construction and real estate development lawyers, Ray has more than 35 years of experience in matters relating to condominium and other multi-use development matters.