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 | Jun 1, 2020
Legislation enacted during the 2020 session of the Maryland General Assembly increases the amount for which an individual unit owner is responsible where the cause of damage to any portion of the condominium originates in their unit. Under Section 11-114 of the Maryland Condominium Act, condominium master policies must cover property damage to all of the condominium structure, including both the common elements and units as originally constructed and finished by the developer, with the unit owners providing individual insurance for their improvements and personal contents. If damage originates in an individual unit, the owner is responsible for the insurance deductible under the condominium’s master policy, up to a maximum cap, which has been set a $5,000. The new law increases that cap to $10,000, and will take effect on October 1, 2020. The statute will now provide: “If the cause of any damage to or destruction of any portion of the condominium originates from a unit, the owner of the unit where the cause of the damage or destruction originated is responsible for the council of unit owners’ property insurance deductible not to exceed $10,000.” Any remaining deductible amount remains a common expense.
by Raymond Daniel Burke | Feb 21, 2020
Legislation now pending in the Maryland General Assembly would double unit owner responsibility for the condominium’s insurance deductible when damage to components of the condominium originates from a unit. Under current law as established in Section 11-114 of the Maryland Condominium Act, the council of unit owners is required to maintain insurance “[f]or property and casualty losses to the common elements and units, exclusive of improvements and betterments installed in the units by the unit owners other than the developer.” An individual owner in whose unit the damage originates is responsible for the condominium’s insurance deductible up to a maximum of $5,000. Otherwise, the deductible remains a common expense. The result is that condominium master policies must cover property damage to all of the condominium structure, including both the common elements and units as originally constructed and finished by the developer, with the unit owners providing individual insurance for their improvements and personal contents. If damage originates in the unit, the owner is responsible for the insurance deductible up to a maximum of $5,000. Under House Bill 108 and Senate Bill 175, the $5,000 limit on unit owner responsibility would be raised to $10,000.
by Raymond Daniel Burke | Aug 20, 2012
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.
