Proposed Legislation To Protect Condominium Warranty Claims Again Dies In Committee

by Raymond Daniel Burke | Apr 15, 2015

The Maryland General Assembly again rejected legislation that would prevent residential condominium developers from including certain provisions in the project’s governing documents or sales contracts that limit the developer’s liability for construction defects. Senate Bill 570 and House Bill 829 both failed to make it out of committee for a vote on the floor.  The bills would have prohibited provisions in the declaration, bylaws or rules and regulations that limit the ability of a council of unit owners to file suit on behalf of itself or the unit owners or enforce warranty claims. The proposed new law would also have precluded limits on the rights of condominium councils or individual unit owners to bring claims relating to an alleged failure of the developer to comply with building codes, county approved plans and specifications, product manufacturer’s installation instructions, and other construction industry standards. Proposed new Section 11-134.1 of the Maryland Condominium Act would prohibit provisions designed to prevent the filing of a claim within the applicable period of limitations or prevent claims from accruing pursuant to the “discovery rule.” The new law would also preclude provisions requiring a vote of the unit owners approving the initiation of a claim, unless such a requirement is adopted after the unit owners assume control of the community from the developer.

The Law Governing The Running of Implied Warranties On Common Elements Depends On Whether a Maryland Condominium Was Created Prior To Or After October 1, 2010

by Raymond Daniel Burke | Jun 17, 2014

During 2010 legislative session, then Maryland General Assembly enacted an amendment to Section 10-131 of the Maryland Condominium Act governing the warranty period for the implied warranties on the common elements of a condominium.  Originally, the warranty on common elements commenced “with the first transfer of title to a unit owner” and ran for three years.  This provision gave rise to problems in enforcing the warranty in communities where unit sales were slow, and a majority of the units remained unsold for an extended period of time.  In such cases, majority control of the condominium remained in the hands of the developer well into, and sometimes beyond, three years following the transfer of title to the first unit.  As a result, during 2010 session, the General Assembly amended the statute to provide that the common element warranty run for a period of three years from the first transfer of title, or “2 years from the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors for the council of unit owners, whichever occurs later.”  However, it is important to note that the legislation provided that it would only apply prospectively from the time of its enactment on October 1, 2010.  Accordingly, any condominium with a declaration, bylaws and plat recorded prior to that date is governed by the original version of the statute, requiring that the warranty commence upon the first transfer of title to a unit and runs for three years.

Common element warranties in condominiums created prior to October 1, 2010 are always governed by the original provision, regardless of when the unit owners took control.  Common element warranties in condominiums created after October 1, 2010 may be governed by either the original provision or the amendment.  If three years after transfer of title to the first unit is later than two years after the unit owners take control, the original provision applies.  If, however, two years after the unit owners take control is later than three years after transfer of title to the first unit, the amendment applies. (more…)