by Raymond Daniel Burke | Apr 30, 2010
The Maryland General Assembly passed House Bill 620, which, if signed into law by the Governor, will take effect on October 1, 2010. The newly enacted law will expand common element and common area warranty protections in condominiums and homeowners associations beyond the period of a developer’s control. It extends the implied condominium common element warranty, by providing that the warranty run for two years from the election of the first board of directors controlled by the unit owners. Similarly, it provides that the implied warranty on homeowner association common areas be extended to run for two years from the election of the first governing body controlled by the homeowners. It also requires that the common elements identified in a condominium declaration be consistent with those components that are specified as being subject to the common element warranty provisions under the Maryland Condominium Act. The Legislature did not, however, pass the proposed Residential Sustainability Act that would have provided some limited relief to condominiums and homeowners associations where foreclosure sales do not result in sufficient funds to cover unpaid association assessments. (more…)
by Raymond Daniel Burke | Mar 4, 2010
The current session of the Maryland General Assembly is considering new legislation that would expand common element and common area warranty protections in future condominiums and homeowners associations. House Bill 620 proposes to expand the application of both the three-year condominium common element warranty, and the one-year homeowners association common area warranty, for projects created after October 1, 2010. The warranty on condominium common elements would run for three (3) years from the first transfer of title to a unit, or two (2) years from the date the developer transfers control, whichever is later. The warranty on homeowners association common areas would run for two (2) years form the first transfer of title to a lot, or two (2) years from the date the developer transfers control, whichever is later. (more…)
by Raymond Daniel Burke | Mar 4, 2010
Legislation has been proposed in the current session of the Maryland General Assembly that would provide some relief to condominiums and homeowners associations in the event of a foreclosure. House Bill 842, known as the Residential Association Sustainability Act of 2010, provides that a specified portion of a lien on a condominium unit or lot in a homeowners association, would, in certain circumstances, have a priority over any future first mortgage or deed of trust recorded after October 1, 2010. This is intended to assist condominiums and homeowners associations who have been left with unpaid assessments, despite having obtained a lien on the property, where the proceeds of a foreclosure sale are exhausted by the outstanding mortgage debt. (more…)
by Raymond Daniel Burke | Oct 30, 2009
A would be condominium buyer has inquired about having heard that it is possible to buy a condominium unit without having the benefit of the three-year common element warranty, because it has already expired at the time of purchase. What that purchaser heard is absolutely correct. Maryland’s three-year statutory warranty on certain components of the common elements can, indeed, expire before all units in the community are sold, leaving subsequent purchasers without the protection and assurance afforded by the statutory warranty specific to the common elements. This is of particular relevance in slow selling communities, especially as a result of the economic downturn, and in large communities that are built in phases over a long period of time. (more…)
by Raymond Daniel Burke | Aug 19, 2009
If you have bought a new home in Maryland during the last several years, including a new condominium, your purchase likely included what are commonly referred to as “ten-year warranty” policies.” But a careful reading of the typical provisions of many of these policies reveals that the suggested coverage benefits are nearly non-existent. In fact, the policies often offer little, if anything, beyond the warranty obligations that the law imposes on new home sellers regardless of whether a warranty policy is offered. The initial coverage under these policies is usually not provided by the warranty company, but is the builder’s obligation alone; an obligation that the builder would have in any event. Only in year three does the policy coverage usually commence, and then only for “structural defects,” and only if one of numerous exclusions does not apply. Indeed, these policies do not provide any meaningful reason for homebuyers to feel assured that building defects in their new home will be corrected for a period of ten years. (more…)
