by Raymond Daniel Burke | Jun 25, 2013
The interpretation of condominium resale disclosure requirements remains unclear as a result of certain Maryland court decisions and the Maryland General Assembly’s failure to provide clarification during the 2013 Session. Those disclosure requirements are intended to provide prospective condominium purchasers with sufficient information about potential expenses so as to permit them to make an informed purchase decision. Uncertainty arose when the Maryland Court of Appeals, in a footnote concerning an issue not even before the Court, offered the opinion that the required disclosure of known code violations, at the time of resale of a unit, under Section 11-135 of the Maryland Condominium Act, refers only to “charged violations.” While this observation was offered in dicta, and is not binding law, it suggested that knowledge of building or health code violations, that ultimately could lead to expensive repairs, need not be disclosed to a would-be purchaser unless the condition had been formally cited by the local code authority. During the 2013 session, legislation was considered that would have touched on this issue by requiring disclosure of “potential” special assessments, but the proposed new law was never enacted. Subsequently, in at least one unreported opinion, the Maryland Court of Special Appeals relied on the Court of Appeals statement to hold that knowledge of a violation requires “notice or citation from an official enforcement agency.” While the unreported opinion is also not binding law, the two decisions have clearly suggested a limited disclosure requirement that may not provide the level of information intended by the statute. (more…)
by Raymond Daniel Burke | May 30, 2013
A bill to license and regulate property managers that had passed in the Maryland House of Delegates died in committee in the Maryland Senate. By a vote of 103 – 35, the House had passed HB 576, which would establish a new regulatory agency for the licensing of community managers of condominiums, cooperative housing corporations, and homeowners associations.
However, a cross-filed bill in the Senate never made it out of committee. (more…)
by Raymond Daniel Burke | Mar 1, 2013
A proposal to establish a new regulatory agency for the licensing of community managers, that failed in during 2012 legislative session, is again before this year’s session of the Maryland General Assembly. House Bill 576 would establish a new regulatory agency for the licensing of community managers of condominiums, cooperative housing corporations, and homeowners associations. (more…)
by Raymond Daniel Burke | Nov 2, 2012
As condominium boards and property managers should well know, Section 11-135 of the Maryland Condominium Act imposes a duty on councils of unit owners to provide unit purchasers with a resale certificate whenever a unit is being re-sold. One significant disclosure that must be made in a resale certificate is “[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.” This, of course, gives rise to the question of what constitutes “knowledge” of a code violation for disclosure purposes. The Maryland Court of Appeals recently addressed this issue, but only in a footnote contained in MRA Property Management, Inc. v. Armstrong, 426 Md. 83, 43 A. 3d 397 (2012). While the issue was not actually before the Court, it, nevertheless, took the unusual step of considering the question, and concluded that the disclosure requirement involves only “charged violations;” that is, only violations as to which a formal violation notice has been issued by the code authority. It can certainly be argued that “knowledge” of a code violation includes knowing that a deviation from a code requirement exists, such as in the form of an engineer’s report, and that such information is highly relevant to a consideration of what maintenance and repair costs may confront the unit purchaser. However, the Court’s voluntary discussion of this issue, while only dicta, certainly indicates the direction and narrow reading of the statute the Court may take if the issue were to be placed squarely before it. (more…)
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.
by Raymond Daniel Burke | Aug 16, 2012
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.
