by Raymond Daniel Burke | Apr 25, 2011
The Maryland General Assembly passed House Bill 679, which permits condominiums to adopt a requirement that unit owners maintain insurance on their units. The bill was signed into law by the Governor on April 12, 2011, and takes effect October 1, 2011. The law adds new Section 11-114.2 to the Maryland Condominium Act to provide that condominium bylaws may include a provision requiring that all unit owners maintain insurance on their units, and that unit owners provide evidence of such insurance to the council of unit owners on an annual basis. The measure further amends Section 11-104 to specifically authorize a condominium’s council of unit owners to amend the community’s bylaws to require unit owner insurance. Significantly, the law provides that such amendments require the affirmative vote of only 51% of the unit owner votes. This is an express exception to the requirement contained in Section 11-104(e)(2), which mandates that amendments to a condominium’s delclaration or bylaws have the support of at least two-thirds of the unit owner votes, and permits the governing documents to provide for a higher, but not lower, percentage. The new law permits an amendment to require unit owner insurance by a simple majority.
by Raymond Daniel Burke | Apr 13, 2011
Pursuant to legislation passed in the closing hours of this year’s session of the Maryland General Assembly, four (4) months of unpaid assessments due to condominiums and homeowner associations, up to a maximum of $1,200, will now receive priority over mortgages, but only those recorded after October 1, 2011. As reported in my post of March 18, legislation was pending in the General Assembly that would afford some limited relief to condominiums in the case of unpaid assessments for units that become lender-owned as a result of foreclosure. House Bill 1246 passed both houses on Monday, April 11, 2011, and once signed by the Governor, will take effect on October 1, 2011. The new law amends Section 11-110 of the Condominium Act to provide that four (4) months of unpaid assessments shall receive a priority over a first mortgage or deed of trust in a foreclosure action. However, there are significant limitations attached to the provision. Only the principal amount of regular assessments are given a priority. It does not extend to interest, costs of collection, late charges, fines, attorney’s fees, special assessments, or other charges that are normally considered part of the delinquency under the Contract Lien Act. Additionally, the Legislature imposed a $1,200 cap on assessments receiving a priority. Moreover, the priority only applies against mortgages and deeds of trust recorded after October 1, 2011. Lenders holding liens are also entitled to request written information from the condominium concerning the unpaid assessments, and, if the information is not provided, the priority is voided. (more…)
by Raymond Daniel Burke | Mar 18, 2011
Associations continue to suffer from an epidemic of unpaid assessments. Such delinquent owners are often also behind in their mortgage payments, which can lead to the lender foreclosing. Once the lender forecloses and takes title, it becomes responsible for assessments going forward, but not for past due assessments. As in last year’s session, the legislature is again considering a means of providing some relief to associations in these circumstances. The Residential Association Sustainability Act of 2011 is pending as Senate Bill 946 and House Bill 1246. It would provide that, in the case of a foreclosure on a mortgage or deed of trust on a condominium unit, the portion of a lien on the condominium unit that represents up to six months of specified unpaid assessments, including specified fees and costs, has priority over a first mortgage or deed of trust under specified circumstances. Accordingly, if the condominium has obtained a lien on the unit for unpaid assessments, six months of those assessments would constitute a priority over the mortgage or deed of trust. In other words, six months of assessment would be paid first out of a foreclosure sale before payment of the mortgage debt. (more…)
by Raymond Daniel Burke | Dec 23, 2010
I recently tried a construction defect case in which I was able to secure a significant jury award on behalf of the owners of a townhome in Montgomery County in a claim involving faulty construction and unfair and deceptive trade practices under the Maryland Consumer Protection Act. I represented Subhash and Rita Dhawan in a suit against the builder of their home, Churchill Group at Maxwell Square, Inc. The suit alleged construction defects discovered several years after the purchase, and was based on claims of negligence, breach of contract, and violations of the Maryland Consumer Protection Act (CPA). They were awarded more than $400,000 in damages which included expert consultant costs and more than $300,000 in legal fees. (more…)
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…)
